The Balanced Budget Act of 1997

Paying for nursing services under the Medicare Act has gone through many changes from the 1960s to the 2020s. The Balanced Budget Act of 1997 was an interesting milestone in the history of medical coverage of services provided by non-physicians. Interestingly, since 1997 nurses can independently make billing immediately after services have been provided, which was a major positive change in reimbursement procedures (“Medicare coverage,” 2001). Equally important, the Act made possible such billing for nurses who practiced both in rural and urban areas. This paper aims to discuss the most interesting updates in nursing practice brought by the Balanced Budget Act of 1997.

The article “Medicare Coverage of non-physician practitioner services” published in June 2001 by the Department of Health and Human Services provides valuable insights regarding the updated practices of billing non-physician services. Interestingly, in the article, it is stated that “the Balanced Budget Act successfully opened up the medical practice to non-physician practitioners, regardless of care settings” (“Medicare coverage,” 2001, p. 2). This means that nurses were allowed to provide services and get paid for them in the hospital setting and for in-patient visits. This practice led to an increase in services provided and bills paid. Notably, new payment options are also likely to have expanded patient service delivery and improved patient satisfaction with services.

Equally important, the article notes that the Balanced Budget Act of 1997 helped change the problem with vague and broad state scopes describing the types of services. The Act filled a gap in guidance and supported the distinguishing between the types of reimbursement for non-physician practitioners. In the article, it was specifically mentioned that the vague scope of services presented a serious problem for healthcare practitioners. It was suggested that clearing up the scope of services could “have the effect of either limiting or expanding the services that are allowed” (“Medicare coverage,” 2001, p. 3). In other words, the Act made it possible to reassess and clarify which nursing practices should be discontinued and which practices can be provided on a larger scale.

Another interesting example is the article notes that the Balanced Budget Act of 1997 expanded the scope for service delivery in urban environments. Before this Act, nurses could issue invoices during home visits to patients if they were paired with a physician. After the adoption of the law, nurses could independently visit patients in urban areas and, accordingly, gained more independence. It is noteworthy that until the law was still not adopted, in rural areas, nurses could independently go to patients’ homes and make billings. Such reforms in nursing practice were likely associated with the growth of the urban population and the growing confidence in nurses as independent healthcare practitioners.

Notably, scholars consider the Balanced Budget Act of 1997 to be an important milestone in the transformation of nursing care delivery to the community. Hooker & Cawley (2020) note that self-service provision by non-physicians in rural areas was only allowed in 1977 after the passage of the Rural Health Clinic Act. Since non-physician was a new profession at that time, the first laws on their work did not consider them as independent providers of services and required that non-physicians had an employer – a supervising physician. Because of this condition, it was assumed that payment for medical services was provided not to the non-physician but to their employer (Adamson et al., 2018). However, with the growing demand for non-physicians’ services, Medicare included their services in the list of services covered by this program in 1982 (Hooker & Cawley, 2020). In 1997, the provision of services by the NPs underwent a major transformation as Congress authorized payment for services like other medical services.

This approach is still relevant in 2022 when non-physicians continue to bill upon delivery of services. Notably, in 2019 MedPAC called for the practice to be abolished, but to no avail. The basic job requirements of NPs today include a request for a physician to be present during the first visit when the physician makes a diagnosis and develops a treatment plan. Subsequently, APRNs and non-physicians may visit the patient on their own to conduct follow-ups. There are more than 120,000 non-physicians in the US who received education through 260 educational programs. Given the general shortage of doctors, the training opportunities for non-physicians and the existence of such a profession are essential to public health care. Remarkably, experts predict an increase in the number of non-physicians by 31% over the next 10 years. In this context, new federal policies and acts can significantly contribute to the development of the non-physicians profession.

Thus, it was discussed how the Balanced Budget Act of 1997 changed attitudes toward the practice of non-physicians. The passage of this law allowed health workers to provide services without the presence of a doctor, and also to independently bill for the provision of services. This has led to increased opportunities for medical practice in general and has improved the healthcare capacity in the country. Just as importantly, this innovation allowed for a reassessment of the types of services provided, and further abolition or optimization of some practices.


Adamson, A. S., Suarez, E. A., McDaniel, P., Leiphart, P. A., Zeitany, A., & Kirby, J. S. (2018). Geographic distribution of non-physician clinicians who independently billed Medicare for common dermatologic services in 2014. JAMA Dermatology, 154(1), 30-36.

Hooker, R. S., & Cawley, J. F. (2020). Public policies that shaped the American physician assistant. Health Policy OPEN, 1, 1-5.

Medicare coverage of non-physician practitioner services. (2001). Department of Health and Human Services.

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LawBirdie. "The Balanced Budget Act of 1997." May 22, 2023.