Position Statement on Modernizing the Healthcare Payment System to Include Nurses

Introduction

Medicare cannot meet its goals for access, quality, equity, or cost containment until nursing care is recognized, defined, and reimbursed as a medical service. For more than half a century, federal policy has acknowledged the essential role of nurses while simultaneously excluding them from the payment structures that define value in American healthcare.

The Center for Nursing Value (CNV) exists to correct a foundational flaw in the healthcare payment system: the disconnect between nursing’s measurable contribution and the economic structures that determine how care is financed. Nursing is one of the strongest drivers of patient outcomes, quality, safety, and system performance. Yet its value remains invisible in the current reimbursement system.

Historical Foundation and Structural Omission

When President Lyndon B. Johnson signed the 1965 law establishing Health Insurance for the Aged and Disabled—now Medicare—the statute formally recognized nurses as indispensable to safe, highquality care. It requires 24hour nursing services in hospitals, comprehensive rehabilitation facilities, and skilled nursing facilities, and mandates nurse involvement in home health agencies and hospice services.

However, the Social Security Act stopped short of defining nurses as providers of “medical and other health services” eligible for direct reimbursement under Medicare Part A or Part B. 42 U.S.C. §1395x(s) explicitly names physicians, podiatrists, physician assistants, advanced practice nurses, social workers, occupational therapists, physical therapists, respiratory therapists, marriage and family therapists, and others as billable providers. Registered Nurses (RNs) and Licensed Practical/Vocational Nurses (LPN/LVNs) are not included.

This single omission created a structural blind spot: Medicare requires nursing, depends on nursing, and pays for nursing indirectly — but does not recognize nursing as a billable medical service distinctly defined and valued. As a result, nursing care is treated as an operating expense rather than a clinical service. In hospitals, every patient receives nursing care tailored to their clinical needs and goals, yet the services outlined in the care plan cannot be separately identified, documented, or billed. In outpatient settings, nurses provide chronic condition management, care coordination, symptom evaluation, preventive care, and patient education, all of which are billed under someone else’s NPI because nurses are not recognized as billable providers.

Economic Distortion and Workforce Consequences

In 2025, 3,379,720 RNs and 648,410 LPNs provided 8.4 billion hours of care at a cost of $605.4 billion in salary expenditures (U.S. Bureau of Labor Statistics). More than half a trillion dollars in clinical care is delivered without any mechanism to identify, classify, or directly reimburse the services provided. These costs are already borne by payers and patients. But because nursing care is not separately identified or billed, it is seen only as labor rather than as a clinical service that produces measurable outcomes. This invisibility suppresses innovation, distorts resource allocation, and undermines workforce stability.

A system that cannot see nursing cannot value nursing — and a system that cannot value nursing cannot sustain nursing. This is not a workforce problem. It is a payment system design problem.

A Modernized Path Forward

The first step in creating a transparent, economically accurate structure for nursing care is to amend the Medicare statute and recognize RNs and LPNs in the same manner as other providers caring for patients in both inpatient and outpatient settings. Nurses complete rigorous academic preparation, extensive supervised clinical training, a national licensure examination, and hold a state regulated professional license. Every registered nurse and licensed nurse has a unique national identifier. Their work preserves life, prevents harm, manages chronic disease, coordinates care, saves money, and drives measurable outcomes across the continuum.

Policy Actions Needed

1. Amend 42 U.S.C. §1395x(s) to include RNs and LPNs in the definition of “medical and other health services.”

2. Direct Congress and CMS to establish a coding structure, coverage rules, documentation standards, and payment rates for nursing services across

inpatient and outpatient settings.

3. Integrate nursing services into valuebased payment models, including quality measurement, risk adjustment, care coordination payments, and population health initiatives.

Conclusion

For the healthcare system to achieve its goals for access, quality, equity, and cost containment, the largest segment of its workforce must be recognized. It is time for Medicare to reflect reality. It is time for Congress to act. Nursing services must be made visible, measurable, and reimbursable — not only because nurses are the foundation of healthcare, but because the system cannot function without them.