This piece is adapted from TCCRI’s recent report “Improving Medicaid Efficiency and Cost-Effectiveness”, available online at: https://www.txccri.org/single-post/tccri-report-improving-medicaid-efficiency-and-cost-effectiveness
This state’s physician shortage is well-documented and indisputable. One key solution to address this issue that is fully within the state’s purview is expanding the ability of certain qualified non-physician providers to practice at the top of their licenses- meaning to fully exercise the education, training, and scope conferred by their current licensure- thereby allowing these providers to expand access to healthcare. Research shows that voters broadly support this policy, with a November 2020 poll finding that almost 70% of voters across party lines support allowing practitioners to exercise a full scope of practice.
Currently, Advanced Practice Registered Nurses (APRNs) in Texas may practice and see patients, but must do so under the delegation of a licensed physician. While the Texas Medical Association (TMA) has historically favored what it calls a “team approach” with physicians and APRNs, under current regulations APRNs are not required to be located in the same city as their delegating physicians, nor are the physicians required to see any patients treated by an APRN. So, although some opponents might argue that allowing independent practice could place patient safety at risk because there is no physician oversight, this policy change would alter little in the actual way APRNs care for their patients. Rather, this policy change would remove a cumbersome and costly hurdle to practice and increase access to care in certain areas of the state.
Furthermore, because APRNs are reimbursed at a percentage of the cost of a regular physician visit, there is potential for cost savings if utilization shifts to greater use of APRNs. Comparing only cost for primary care services for evaluation and management (E&M) procedures between APRNs and physicians will result in cost savings as utilization shifts from physicians reimbursed at relatively higher rates to APRNs. For Texas Medicaid, that reimbursement is 92 percent of the regular physician rate. Overall, multiple studies and simulations show overall cost-effectiveness and sometimes significant savings with no restrictions on APRN practice, with net savings ranging from more than $700 million in Alabama over a 10-year period to billions of dollars in Pennsylvania and California over a 10-year timeframe, considering the overall healthcare system.
Fiscal year 2018 and 2019 data for all primary care evaluation and management procedures for each risk group has been analyzed (Figure 12 below) to provide some insight into current utilization and potential Medicaid savings for a market shift to APRNs.
Figure 13. Primary Care Expenditures for Advanced Practice Nurses and Physicians,
A market shift in practice and utilization would naturally yield savings, based on the 92 percent of rate reimbursement for APRNs. Also important to this shift in use of APRNs is an understanding of the current utilization. Expenditure data for 2018 and 2019 by client and provider (APRN and Physician) for primary care evaluation and management codes shows that the overall cost per client is lower for APRNs compared to physicians, as expected. As this is aggregate data, it could also mean that APRNs are seeing patients for the lower cost services. However, the number of visits per client is also lower for APRNs. Research shows that APRNs and physicians’ assistants (PAs) spend more time with patients and have higher satisfaction surveys. While these data are supportive of that finding, there is not enough detail-level data to be conclusive based on the current utilization patterns.
Looking only at data for primary care evaluation and management codes (E&M) for APRNs compared with physicians shows the following overall expenditures for fiscal years 2018 and 2019, and potential savings with a shift of 25 or 47.5 percent visits to APRNs. While this will include most of the services provided by APRNs, it is not exhaustive, and there are additional areas where shifts in Medicaid costs can occur. Overall, using the approximate mid-point of the potential shift to APRNs where 47.5 percent of primary care visits are moved to APRNs, the two-year savings is approximately $12.6 million.
Additional savings opportunities are available from a shift to Certified Registered Nurse Anesthetist (CRNA) utilization. As with APRNs, there will be savings when more utilization is driven to CRNA use in anesthesia. Fiscal year 2019 data shows that 35 percent of all anesthesia reimbursement is for a physician-performed service (only), with 41 percent for anesthesiologist-directed service, of which 50 percent of the rate is for the anesthesiologist and 50 percent for the CRNA. An anesthesiologist can direct up to four CRNAs. This area is where the shift can take place, depending on the practices of the hospital; a CRNA would receive 92 percent of the rate, with the remaining 8 percent “saved”. More than 20 percent of the expenditures were made with a CRNA operating as an independent practitioner under the direction of a physician other than anesthesiologist.
A 75 percent shift would show savings of $9 million over a two-year period using the data for 2018-19, and a 50 percent of these procedures shift would show $6 million.
These utilization shifts may look different when all advanced practice nurses’ practice at the top of their licenses, particularly as/if the patterns of utilization change for use of APRNs as the primary drivers of primary care and maintenance of stable health “homes” for clients with increased access to preventative care. The figures above are low-end estimates for evaluation and management primary care in Medicaid only – and based on current utilization patterns and costs. The bottom-line is that allowing APRNs to practice at the top of their licenses will expand access to care in Texas and produce savings in the Medicaid program and the private marketplace.