ineligible under his insurance plan for reimbursement for the further education in diet and glucose control, materials (such as a glucometer), and referral to an ophthalmologist that are indicated. Home follow-up is needed, but the visiting nurse agency is certified to provide only two visits when the patient could use five. No one calls the initial primary care physician to share discharge planning or information, and no one gives the patient a summary of the visit to take to that physician. The ophthalmologist will not accept the patient because of his status as a Medicaid recipient. A major challenge to repairing this fragmentation lies in the fee-for-service structure of the payment system, which indiscriminately rewards increasing volume of services regardless of whether it improves health outcomes or provides greater value (MedPAC, 2006).

Effect of Fragmentation on Realizing the Value of Nurses

Within this system, the contributions of nursing are doubly hidden. Accounting systems of most hospitals and health care organizations are not designed to capture or differentiate the economic value provided by nurses. Thus, all nursing care is treated equally in its effect on revenue. A 2007 review of 100 demonstration projects that provided incentives for high-value care to hospitals and physicians found no examples that specifically delineated or rewarded nurses’ contributions (Kurtzman et al., 2008). Yet nurses’ work is estimated to vary by 15 to 40 percent for any given diagnosis-related group (Laport et al., 2008). The effect on the provision of health care is difficult to document, but a closer look at staffing ratios suggests some of the consequences. Generally speaking, as an analysis by the Lewin Group concludes, because health care facilities cannot capture the full economic value of the services nurses provide, they have an economic incentive—whether they decide to heed it or not—to staff their organizations “at levels below where the benefit to society equals the cost to employ an additional nurse” (Dall et al., 2009).

Barriers to measuring and realizing the economic value generated by nurses exist outside the hospital setting as well. In many states, APRNs are not paid directly but must be reimbursed through the physician with whom they have a collaboration agreement. Payments are funneled through the physician provider number, and the nurse is salaried.

For years, professional nursing organizations have sought to counter the inequitable aspects of the fee-for-service payment system by lobbying to increase the types of services for which NPs can independently bill Medicare, Medicaid, and other providers. They have had some success in that regard in the past (Sullivan-Marx, 2008). However, according to Mark McClellan and Gail Wilensky, both former directors of CMS, this approach has become a losing proposition. As McClellan and Wilensky testified to the committee in September 2009, while fee-for-service is not going to disappear any time soon, its future is severely limited in any sustainable health care system.

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