The following is an overview of Medicare’s bonus program for physicians who provide services in a Health Professional Shortage Area (HPSA) or Physician Scarcity Area (PSA).

Health Professional Shortage Area (HPSA)
Physicians who provide covered professional services in any rural or urban Primary Care Health Professional Shortage Area (HPSA) are entitled to a ten-percent bonus payment. A Health Profess-ional Shortage Area is an area, either urban or rural, designated as having a shortage of health care professionals. In addition, effective for claims with dates of service on or after July 1, 2004, psychiatrists (Provider Specialty 26) furnishing services in an area designated as a Mental Health HPSA are eligible to receive bonus payments quarterly. If an area is designated as both a Primary Care HPSA and a Mental Health HPSA, only one (1) ten-percent bonus payment will be made for a covered service.

Physician Scarcity Area (PSA)
Medicare will pay a five-percent PSA bonus on a quarterly basis. A single service may be eligible for both the PSA bonus and the HPSA bonus. The PSA bonus will be paid on services rendered on or after January 1, 2005 through December 31, 2007. Only the provider designations of General Practice (01), Family Practice (08), Internal Medicine (11), and Obstetrics/Gynecology (16) will be paid the bonus on ZIP codes designated as Primary Care PSAs. All other physician provider specialties will be eligible for a Specialty Care PSA bonus for the ZIP codes designated as specialty PSAs. Dentists, chiropractors, podiatrists, and optometrists are not eligible for a physician scarcity bonus as either primary care or specialty physicians.

HPSA/PSA Eligibility and Designation
The location of the office or primary service location of a provider does not determine HPSA/PSA eligibility, nor is HPSA/PSA determined because a beneficiary resides in a HPSA or PSA. The key to HPSA or PSA eligibility is where the service is actually provided (place of service). For example:

• A physician providing a service in his/her office, the patient’s home, or in a hospital qualifies for the bonus payment as long as the specific location of the service is within an area designated as a HPSA or PSA.
• A physician may have an office in a HPSA or PSA, but go outside the designated HPSA/PSA area to provide the service. In this case, the physician would not be eligible for the bonus.
• The office address is not located within a HPSA or PSA. Therefore, the physician is not entitled to a bonus payment for services provided at this address. However, if this same physician travels to a nursing facility, the patient’s home, or a hospital within a HPSA or PSA designated area, the physician would be eligible for the bonus.

PSA Automatic Payments

• Medicare will automatically pay the bonus without the need for a modifier on the claim for services provided in ZIP code areas that:
  1. Fall within a county designated as a PSA; or
  2. Fall partially within a county designated as a PSA and are considered to be dominant in that county, based on a determination of the U.S. Postal Service; or
  3. Fall within a rural area of a metropolitan statistical area identified through the latest modification of the Goldsmith modification that is determined to be a PSA.
• In some cases, a service may be provided in a county that is considered a PSA, but the ZIP code is not considered to be dominant for that area. In these cases the bonus payment cannot be made automatically. To receive the bonus for such services, physicians will need to include a new modifier of AR to reflect a physician service provided in a PSA.
• Services submitted with the AR modifier will be subject to validation by Medicare.
• ZIP codes that are eligible for automatic payment of the physician scarcity bonus are posted on the CMS Web site at http://www.cms.hhs.gov/HPSAPSAPhysicianBonuses/ .

How to Determine HPSA/PSA Eligibility
The first step in billing for HPSA/PSA bonus payments should be verification of the eligibility of the location where the services were performed. The bonus is based on the actual places of service and not where the physician’s office is located or where the patient resides.

HPSA/PSA Designations
The Division of Shortage Designation (DSD) of the Public Health Service (PHS) determines HPSA/PSA designations. Requests for additional information on HPSA/PSA designations, withdrawals, or reinstatement of a withdrawn designation should be directed to:

Public Health Services
Division of Shortage Designation
4350 East-West Highway Room 91-D1
Bethesda , MD 20814

For shortage designation inquiries, please call 1-888-275-4772. Press option 1, then option 2, or visit the HRSA Web site at http://bhpr.hrsa.gov/shortage . You can also contact the Shortage Designation Branch:

sdb@hrsa.gov
301-594-0816
301-443-4370 fax
5600 Fishers Lane Room 8C-26
Rockville , MD 20857

HPSA Locations
Although some HPSAs span entire counties (or other territorial subdivisions within a state), typically, they represent only sections of counties.

Urban HPSAs, particularly in large metropolitan areas, are usually identified by census tract. To help you identify specific street addresses within a census tract, contact your County Planning Office.

To determine your Census Tract Location please refer to the following Web site: http://www.census.gov/main/www/cen2000.html

Claim Coding Requirements and Payment

The ten-percent (HPSA) or five-percent (PSA) bonus payment is based on the amount actually paid by Medicare, not the approved amount. Payment is made for services identified on either assigned or unassigned claims.

Some HPSA/PSA areas are designated as auto pay areas based on the ZIP code. For these auto pay areas, no modifier is required to receive the HPSA/PSA payment. To determine if your area is designated as an auto pay HPSA/PSA area, please visit the Centers for Medicare & Medicaid Services Web site at http://www.cms.hhs.gov/hpsapsaphysicianbonuses/ .

Physicians whose ZIP codes are not on the auto pay list must indicate that their services were provided in a bonus-eligible rural or urban HPSA/PSA by using the following modifiers:

AQ - service was provided in a HPSA for dates of service on or after January 1, 2006.
AR - service was provided in a PSA.

The AQ or AR modifier must be reported next to the procedure code. The provider must report the address where the service was actually performed.

The bonus payments are not included with each claim payment. Rather, a quarterly schedule is established for issuing bonus payments. A remittance will accompany each quarterly payment.

These payments are taxable and must be reported to the IRS.

When you receive your HPSA/PSA remittance, if you discover that one or more of the claims should not have been paid a bonus, please contact us with the claim information.

Bonus Payments Limited to Professional Services
Health Professional Shortage Area (HPSA)/Physician Scarcity Area (PSA) bonus payments are limited to professional services only.

Eligible Providers
Only the physician specialties listed below are eligible to receive the HPSA bonus payment for services that are rendered in a HPSA:

• Doctors of Medicine
• Doctors of Osteopathic Medicine
• Doctors of Dental Surgery
• Doctors of Chiropractic Medicine
• Doctors of Podiatric Medicine
• Doctors of Optometry

Prepayment Validation – (NY only)
When possible, Medicare will perform a prepayment validation of HPSA/PSA eligibility. If the place of service address on the claim is found to be outside the designated HPSA/PSA areas, the HPSA/PSA modifier will be changed to a CC, and a message will appear on the provider’s remittance. The HPSA/PSA bonus will not be paid on those claims found to be outside the eligible HPSA/PSA areas defined by the Centers for Medicare & Medicaid Services (CMS).

Postpayment Review
Each quarter, an analysis is performed on a sample of physicians who received HPSA/PSA bonus payments for the prior quarter.

If we discover, in our review process, that any claims submitted should not have been paid bonus payments, the claims will be adjusted.

It is not necessary to send a check for the HPSA/PSA overpayment amount, as it will be deducted from your future HPSA/PSA bonus payment check. If there is a remaining balance, or there is no HPSA/PSA check to be sent, our accounting department will contact you for the amount due.

What Else You Should Know
There is no administrative or judicial review regarding the identification of a county or area; the assignment of a physician to a county; the assignment of a specialty of any physician; and/or a postal ZIP code to a county or other area. HPSA/PSA bonuses are not subject to the formal appeals process.

You can visit the Web site for the Centers for Medicare & Medicaid Services (CMS) to keep up to date on changes to the process at http://www.cms.hhs.gov/hpsapsaphysicianbonuses/ .

HPSA/PSA Claims for New York, New Jersey, and Indiana/Kentucky will be monitored and/or adjusted at the National Government Services Syracuse, NY site.  

Appeal Rights
If you did not receive a HPSA/PSA bonus payment, but believe that you are entitled, you may request that we reopen the claim.

Reminder
As a reminder, Physician Scarcity Areas (PSA) bonus payments are effective for dates of service through December 31, 2007 only , unless the Centers for Medicare & Medicaid Services (CMS) determines that the bonus payment will continue to be made based on the AR modifier for dates of service on or after January 1, 2008 . Refer to CMS Change Request (CR) 5711 for details.

Page Last Modifed: 09/26/07