Finances | Hospitals

Revisions to Medicare Could Change the Nursing Profession

  • Medicare has been a law since 1965 under Lyndon B. Johnson’s administration. Numerous policy changes have occurred since then.  
  • Currently, Medicare reimbursement does not include payment for nursing care. A nurse’s contribution to care only falls under a hospital bed charge. 
  • Perhaps changes in the Medicare reimbursement model to include payment for nursing care could lessen our nursing shortage crisis, provide safer nurse-patient ratios, and retain nursing staff. 

Allison DeMajistre


August 29, 2022
Simmons University

Medicare was signed into law on July 30, 1965, by Lyndon B. Johnson.  

There have been many changes to it throughout the years, including direct payments to physicians, nurse practitioners, physical therapists, and other care providers.  

Still, one thing that hasn’t changed is Medicare reimbursement for nursing care. 


medicare reimbursement concerns

Underestimated Nurse’s Skill

Nurses must be experts in complicated equipment like IV pumps, cardiac monitors, the Arctic Sun that cools patients after a heart attack, and Swan-Ganz catheters.  These are just a few examples. 

Nurses also handle multiple high-risk medications daily; when misused, some cause severe injury or death to a patient, as we saw in the RaDonda Vaught case in Tennessee. 

A skilled nurse makes critical decisions when a patient’s condition worsens, often collaborating with a doctor by phone and following through with their orders. Nurses are the caregivers and watchdogs; patients’ health is personal to them. They practice professionalism, provide education, and are often the most compassionate healthcare team member. 

With all these responsibilities, Medicare reimbursement in hospitals is calculated as if nurses are just one part of a hospital bed.  

Outdated Medicare Reimbursement Model

Medicare has undergone numerous policy changes over the last 50 years, but the only thing that hasn’t changed is the antiquated reimbursement structure for hospital nursing care. 

Many nurses aren’t aware that when Medicare pays for a patient in the hospital, they roll nurses into the rate charged for the room, which means that nurses are placed squarely on the cost side of health care. 

Unfortunately for nurses, health care is about making money, and nurses are part of a cost that isn’t bringing in revenue. Hospitals try to minimize expenses that don’t produce income, which means working with the least number of nurses on the floor will bring in more revenue. 

For example, a hospital’s reimbursement rate is the same whether the nurse-patient ratio is one to four or one to eight. So if a hospital receives $80,000 for eight rooms and pays only one nurse, they will make a lot more than if they pay two or three to care for those eight patients. 

That is why you get sent home when there are multiple discharges. The hospital bed you are a piece of is empty and not generating revenue. 


medicare reimbursement nursing care

How Changes Could Make a Difference

Safe Patient Ratios

Nurses have been trying to pass laws for safe patient ratios, and even though this seems like a no-brainer, hospitals have been fighting it because it will cost them more money. But if Congress were to pass a statute allowing direct payment for nursing care, hospitals would follow along happily because they know it would lead to better patient outcomes. 

Safe ratios would also include accounting for the patient acuity level and how many patients would be under the care of one nurse. When a telemetry nurse has one patient that is crashing, and she needs to take care of four others, it can turn into a dangerous situation. Taking acuity level into consideration is critical in achieving positive patient outcomes.  

Retention Rates

There is a good chance passing this statute would help with nurse retention by allowing new nurses to receive proper orientation and experience with nurse residency programs. New nurses, right out of nursing school, are going into an ICU and getting three months of orientation, and then they are cut loose on their own with a “good luck, you’re going to do great!”  

The Robert Woods Foundation estimates it takes $22,000 to over $64,000 to onboard a nurse in the hospital. At this rate, you would think retention would be the prime focus, but instead, they rush nurses through because each week they are on orientation is another week they are paying two nurses to care for each patient in that assignment. 

New nurses often train with multiple preceptors. They will sometimes have another rookie nurse with only a year of training as a preceptor because it didn’t work out with staffing that day to have a veteran nurse for orientation. 

Other times when staffing is at a critical high, the preceptor will have seven patients, give three to the orientee independently, and provide oversight while they care for the other four. The lack of proper orientation and education is why many nurses leave the beside after a year or two. 

Nurse Residency Programs

Medicare changes could lead to a standard of nurse residency programs across the country.  

For example, Medicare reimburses physicians for residency programs for medical students just coming out of school. A resident physician trains with a fellow resident with more experience, and they are both overseen by a doctor with decades of experience.  

Imagine providing nurses with this type of training and how it could change the profession and overall patient outcomes.

medicare reimbursement costs

The Bottom Line

The American Nurses Association (ANA) briefly mentions the possibility of direct payments to nurses through the necessary changes to Medicare. Unfortunately, until Congress revises the Medicare reimbursement model for hospitals, nurses will remain just another cost to administration.  

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