Nurse practitioners (NPs) and physician assistants (PAs) represent a growing share of the health care workforce, but much of the care they provide cannot be observed in claims data because of indirect (or "incident to") billing, a practice in which visits provided by an NP or PA are billed by a supervising physician. If NPs and PAs bill directly for a visit, Medicare and many private payers pay 85 percent of what is paid to a physician for the same service. Some policy makers have proposed eliminating indirect billing, but the possible impact of such a change is unknown. Using a novel approach that relies on prescriptions to identify indirectly billed visits, we estimated that the number of all NP or PA visits in fee-for-service Medicare data billed indirectly was 10.9 million in 2010 and 30.6 million in 2018. Indirect billing was more common in states with laws restricting NPs' scope of practice. Eliminating indirect billing would have saved Medicare roughly $194 million in 2018, with the greatest decrease in revenue seen among smaller primary care practices, which are more likely to use this form of billing.
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