Should payment rates differ when services are provided by nonphysician practitioners instead of physicians?
The physician fee schedule does not differentiate among specialties in the payments provided for particular services, although payments for more complex services are higher to account for the additional time, eff o r t , skill, and stress that may be required to provide care. If payment rates adequately account for diff e r e n c e s in resource costs among services, paying different amounts for services when they are provided by NPPs may not be justified.
Whether payment rates should differ between physicians and NPPs depends on whether they produce the same product. The product can be characterized by the services provided, the locations in which they are provided, and the patient outcomes that result. The inputs used to produce a service also may diff e r, and this can affect the cost of the product. Inputs are the resources to provide the service: providers’ e d u c a t i o n and training; practice expenses, including support staff, office space, supplies, and equipment; and professional liability insurance. These inputs, along with the time, effort, skill, and stress required to provide the service, are the components used in the physician fee schedule to determine payment rates.
Some of these factors may justify a payment difference while others may not. On the one hand, data on the type of service, location of service, and outcomes provide evidence of many similarities between NPPs and physicians. On the other hand, some argue that differences in the length and content of training between NPPs and physicians support a payment differential. Consideration also should be given to d i fferences in rates for professional liability insurance between physicians and NPPs. Practice expenses, h o w e v e r, may be the same regardless of who provides the service.
Does the product vary by the type of practitioner?
To help assess whether physicians and nonphysician practitioners provide different products, MedPAC examined Medicare data on the types and location of services provided by NPPs. We also reviewed research on quality and patient outcomes and information on other payers. In general, NPPs provide more evaluation and management (E&M) services that are slightly lower in complexity than physicians on average. Both provide a majority of their services in office based settings, although NPPs tend to provide a higher proportion of their services to patients in nursing facilities. Outcomes of care provided by NPPs for equivalent patients have been shown to be comparable to those of physicians.
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