Until the passage of the Balanced Budget Act of 1997, acute care nurse practitioners could not be directly reimbursed for inpatient services provided to Medicare patients. With the enactment of this legislation, acute care nurse practitioners may now be directly compensated for care provided. The historical and contextual issues that surround reimbursement for nursing and advanced practice nursing services are reviewed to serve as a foundation for understanding the current Medicare reimbursement regulations. The implications of the Balanced Budget Act of 1997 for acute care nurse practitioners and their professional colleagues are critically examined. The language of the Balanced Budget Act of 1997 and the subsequent rules and regulations issued by the Health Care Financing Administration are reviewed with specific focus on implications for acute care nurse practitioners. The opportunities for reimbursement for services provided by acute care nurse practitioners are more extensive than ever before. Acute care nurse practitioners and their physician colleagues will be wise to become fully conversant with the changes in Medicare reimbursement regulations.

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