Primary Care Workforce Shortages: Nurse Practitioner Scope-of-Practice Laws and Payment Policies

Originally published by the Center for Studying Health System Change (HSC). HSC was a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

Primary Care Workforce Shortages: Nurse Practitioner Scope-of-Practice Laws and Payment Policies

NIHCR Research Brief No. 13 — February 2013

Tracy Yee, Ellyn R. Boukus, Dori A. Cross, Divya R. Samuel

With major coverage expansions under the Affordable Care Act set to take effect in 2014, concerns about primary care provider shortages grew increasingly urgent. The United States already faced a shortfall of primary care physicians in many communities, and the addition of millions of newly insured patients was expected to strain capacity further. Nurse practitioners (NPs) were frequently cited as part of the solution, given their training in primary care and their growing numbers. But the degree to which NPs could help fill the gap depended heavily on state scope-of-practice laws and payer policies that varied widely across the country.

Wide Variation in State Laws

This qualitative study by Tracy Yee, Ellyn R. Boukus, Dori A. Cross, and Divya R. Samuel examined NP practice environments in six states representing a wide spectrum of scope-of-practice regulation: Arizona, Arkansas, Indiana, Maryland, Massachusetts, and Michigan. Some of these states allowed NPs to practice independently, diagnosing, treating, and prescribing medications without physician supervision. Others required varying degrees of physician oversight, from formal collaborative agreements to direct supervision requirements that limited NPs' authority to provide care autonomously.

The researchers found that the scope-of-practice laws themselves did not appear to directly restrict the clinical services NPs could provide to patients in day-to-day practice. In both restrictive and permissive states, NPs reported performing similar clinical functions: conducting physical examinations, diagnosing common conditions, prescribing medications, ordering laboratory tests, and managing patients with chronic diseases. The actual clinical work was largely the same regardless of the regulatory framework.

The Indirect Effects of Supervision Requirements

Where scope-of-practice laws made a significant difference was in their indirect effects on NP practice opportunities and the broader primary care landscape. In states requiring physician supervision, NPs who wanted to establish independent primary care practices faced a structural barrier: they needed a collaborating physician willing to enter into a formal agreement, which often involved payment to the physician and limited the NP's geographic flexibility. This requirement made it harder for NPs to open practices in underserved areas where physician collaborators were scarce, precisely the communities most in need of additional primary care capacity.

Supervision requirements also influenced how health plans and public payers treated NPs. In states with more restrictive laws, NPs were less likely to be recognized as primary care providers by health plans, less likely to be included directly in provider networks, and less likely to be able to bill payers and receive payment in their own name. These payer policies compounded the regulatory restrictions, making it economically difficult for NPs to practice at the full extent of their training and education even when the law technically permitted a broad clinical scope.

Policy Recommendations

The study's findings suggested that simply revising scope-of-practice statutes, while important, would not be sufficient on its own to increase primary care capacity through greater NP utilization. Policymakers needed to consider a broader set of regulatory and payment changes. Among the recommendations: explicitly designating NPs as eligible primary care providers under Medicaid programs; encouraging or requiring health plans to credential NPs and include them in provider networks on equal footing with physicians for primary care services; and allowing NPs to bill and be reimbursed directly for the care they provided, rather than requiring that billing flow through a supervising physician's practice.

The research underscored that the primary care workforce challenge required attention not just to who was legally permitted to provide care, but also to the payment and organizational structures that determined whether qualified providers could actually reach the patients who needed them. Addressing scope-of-practice laws without simultaneously reforming payer recognition and reimbursement policies would leave significant barriers in place for NPs seeking to expand access to primary care.

Sources and Further Reading

AHRQ — Federal health care quality research agency.

Health Affairs — Peer-reviewed health policy research.

Robert Wood Johnson Foundation — Health policy research.

Commonwealth Fund — Research on health care quality.