To Reimburse or Not to Reimburse: Demonstrating the Value of Nursing
Nursing is often undervalued on paper. Some believe that reimbursement is the answer.
KEY TAKEAWAYS
• Direct reimbursement is one potential avenue for proving the value of nursing concretely.
• The process would have to involve major changes to how CMS and third-party providers work with health systems, and it would require new processes for submission of reimbursement claims.
• The alternative to reimbursement could involve reexamining the metrics that many health systems use to determine ROI and including nurse-sensitive indicators.
What is the value of nursing?
It’s an age-old question that circulates throughout C-suite meeting rooms in health systems across the country. And as of now, nursing often does not have a separate line item on many budgets, despite making up a large portion of the healthcare workforce.
To Katie Boston-Leary, director of nursing programs at the American Nurses Association (ANA), and a HealthLeaders Exchange member, that is a big part of why nursing is seemingly undervalued.
“I think a lot of it has to do with the fact that we’re invisible in terms of how we contribute to the bottom line, particularly the financial well-being of institutions,” Boston-Leary said. “We don’t have a separate line item on the claim side and also on the reimbursement side.”
In recent years, the idea of direct reimbursement for nurses has been making some headway.
The Concept
According to the ANA, nursing costs are grouped in with patient room costs, and when the time comes for budget cuts, nursing is often the first to go. Direct-Reimbursement Nursing Model pilots “expand nursing practice and elevate the value of nursing through direct reimbursement for nursing care delivery, management, and coordination outcomes,” says the ANA.
Anne Dabrow Woods, nurse practitioner and chief nurse of health learning, research and practice at Wolters Kluwer, says this model would impact both nurses and nurse practitioners, who provide primary care services but are not reimbursed in the same way that physicians are.
“They don’t tend to see [nurse practitioners’] value as great as what a physician is, and all the research clearly shows that a lot of our care is equal to that of a physician,” Woods said. “We’re not saying we want to replace physicians, but we are saying we want to work collaboratively with them.”
In terms of nursing, Woods argued that the lack of reimbursement communicates the lack of value for the work nurses do.
“Now as a nurse, it becomes really problematic if you’re not getting reimbursed for the care you deliver … and you’re lumped into that room and board charge,” Woods said, “because it’s very difficult to articulate the value that nurses bring to patient care in acute care settings or other settings if you can’t reimburse.”
Boston-Leary explained how in her experience as a chief nursing officer, she found that nursing was seen as an expense, which means it’s a liability and a cost that needs to be reduced.
“The way the system is set up, if organizations can reduce labor, particularly with nursing … and achieve excellent patient outcomes, that’s the win,” Boston-Leary said, “which doesn’t help, because … nurses, in some cases, are going along with working [in] unhealthy work environments [with] unimaginable workloads.”
Whether reimbursement is in the cards, Boston-Leary said, health systems are not properly valuing nursing.
“I think it’s every institution’s duty,” Boston-Leary said, “it’s more about the fact that there’s a responsibility for every organization to understand how nurses contribute to the bottom line, because they do.”
Reimbursement in practice
Many different reimbursement models could potentially be put in place if health systems decide to follow this strategy.
Woods said the first step is to look at nurses’ impact on care and nurse-specific quality indicators. Some of the factors could include fall prevention, infections, and readmission rates.
The reimbursement process could be based on the model that physical therapists and occupational therapists use, according to Woods.
“They look at the overall patient acuity and they look at the time that is spent with the patient,” Woods said.
Woods also suggested using the nurse equivalent to national provider numbers that others use to bill for their services.
“[Nurses] have a thing called a nurse’s number, and you get that number when you pass your boards,” Woods said. “If we could start associating the work of the nurse with their nurse’s number, then you can start to really make a case for allowing nurses to bill for their services.”
Boston-Leary said there might be a pathway toward reimbursement in models that already exist for advanced practice nurses. However, Boston-Leary said, the system would have to undergo a total overhaul to make reimbursement a reality.
“Largely for all nurses, every single nurse getting directly reimbursed, I don’t know that the system itself and the people within the system have a tolerance for all that and the capacity for all that,” Boston-Leary said, “because being set up for that in itself takes a lot.”
To Rudy Jackson, senior vice president and chief nurse executive at UW Health, and a HealthLeaders Exchange member, the issue lies with making the concept a reality, especially in a time where the goal of many healthcare executives is to cut costs.
“Conceptually, the ability to recognize the care provided by nurses as a mechanism in reimbursement is incredibly interesting,” Jackson said. “The challenge is [that] operationalizing a model such as this would require a complete restructuring of our entire healthcare reimbursement model.”
Jackson also pointed out that there are already areas where nurses do get reimbursed.
“There are, in fact, certain skills completed by registered nurses that are reimbursable, such as Vascular Access Teams, however, not many,” Jackson said. “There is an opportunity to look more aggressively at other skills provided by nurses.”
Reimbursement would involve one process for submitting invoices or claims and getting reimbursed and another for denials and resubmissions.
“There’s not much tolerance and ability and capacity for the system and the people within the system to make this happen,” Boston-Leary said. “Not to mention, it’s going to take a major reversal of the current processes and change for this to happen.”
What about the cost?
As with any new program in healthcare, the first question on everyone’s mind is how to pay for it.
According to Woods, the direct reimbursement process would not be taking money out of health systems.
“What we’re saying is allow the nurses to get reimbursed for their work that they do,” Woods said. “And if they are employed by the healthcare organization, essentially that reimbursement goes back to that healthcare organization.”
Reimbursement could act as a reinvestment in the health system, Woods explained, which would improve patient care along with recruitment and retention. If hospitals put a cost to the value of nursing, they would be in a better position to focus on developing nurses.
“If a nurse gets into a work situation and the situation is unsafe … the nurse is going to leave because its an uncertain work situation,” Woods said. “If we can invest in our nurses and really articulate the value they bring, you’re going to see better nurse retention.”
To Boston-Leary, nurses do not always feel as respected as other members of the care team, and health systems need to understand how direct care nurses contribute to the bottom line.
“Understanding that piece, particularly when we do have to be more financially savvy as nurses and understand what things cost and how systems get reimbursed,” Boston-Leary said, ” adds to that piece of matter for nurses where they feel as if they are adding to the bottom line.”
The Alternatives
There are alternatives to reimbursement that could also demonstrate the value of nursing on paper.
To Jackson, the answer is that hospitals need to invest in nursing.
“Offer appropriate staffing ratios based on nursing’s assessment of the care needed,” Jackson said. “Leverage technology to support administrative tasks nurses are faced with.”
Nursing is the single largest workforce in any hospital, according to Jackson, and so nurses must be included in leadership and decision-making processes.
“Nursing leadership should always be part of the senior leadership team with reporting responsibilities to the highest level of the organization,” Jackson said. “This ensures accountability and support.”
Boston-Leary recommended looking at nurse-sensitive indicators, since nurses do have duties that directly impact outcomes. Health systems could look at the ROI when hiring new nurses in a similar way that they look at ROI when hiring new physicians.
“This is also a place where we can’t afford to couch it in the space of soft dollars,” Boston-Leary said, “because people hardly pay attention to soft dollars. It’s more about hard numbers.”
CNOs should advocate for bringing in a finance partner who can crunch numbers and show how nurses are contributing to the bottom line, Boston-Leary said. Some health systems have even hired a nurse in the finance department to give input.
“I know this is going to be a struggle for most small critical access hospitals,” Boston-Leary said, “but for the ones that can, they can lead the way to help set up the methodology for the smaller institutions and community hospitals that can’t afford it.”
Boston-Leary also recommended revisiting the metrics that health systems use to determine value.
One example is the average daily census, which only captures a certain number at a certain point in the day and doesn’t provide the full story. Another is productivity, which, according to Boston-Leary, is not the measure that people think it is.
“We should not be celebrating when nursing has 98% to 120% productivity,” Boston-Leary said, “especially if you have a department that’s not fully staffed. It may mean that you’re overextending your people and it’s impacting their wellness and overall health.”
Health systems should also pay attention to the positions that tend to get cut when times get tough, since many of them are still necessary for a strong and resilient workforce, Boston-Leary said.
“I think these are all the things that require some research that CNOs can lead with the proper resources,” Boston-Leary said, “and get the message out there, so that everyone sees it and understands how that could be applicable to where they are as well.”
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G Hatfield is the nursing editor for HealthLeaders.