Medicare Physicians in Shortage Areas to Get Automatic Bonuses

Physicians who serve Medicare patients in a Health Professional Shortage Area (HPSA) automatically receive a 10-percent bonus payment except for certain situations that require the AQ modifier.

  • Fall entirely in a county designated as a full-county HPSA,
  • Fall entirely within the county through a U.S. Postal Service (USPS) "determination of dominance," or
  • Fall entirely within a partial county HPSA.

However, when you provide Medicare services in ZIP code areas that do not fall entirely within a full-county or partial-county HPSA, you must enter the AQ modifier on the claim to receive the bonus.

You'll need to use the modifer when you provide services in a ZIP code area that:

  • Does not fall entirely within a designated full-county HPSA bonus area,
  • Falls partially within a full-county HPSA but is not considered to be in that county based on the USPS dominance decision;
  • Falls partially within a nonfull county HPSA, or 
  • Was not included in the automated file of HPSA areas based on the date of the data run used to create the file.

Some points to remember include the following:

  • The Medicare carrier for Texas bases the bonus on the amount actually paid (not the Medicare-approved payment amount for each service) and pays the 10-percent bonus on a quarterly basis.
  • The HPSA bonus pertains only to a physician's professional services. If you bill a service that has both a professional and technical component, only the professional component will receive the bonus payment.
  • The key to eligibility is not that the beneficiary lives in a HPSA nor that your office or primary location is in a HPSA, but rather that you actually rendered the services in a HPSA.
  • To be considered for the bonus payment, you must be include on all electronic and paper claim submissions the name, address, and ZIP code of the location where you rendered the service.

You should verify the eligibility of your area for a bonus before submitting services with a HPSA modifier (don't use the modifier if you just think you might need to.) You can do this on the Centers for Medicare & Medicaid Services website



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Last Updated On

October 20, 2017

Originally Published On

March 23, 2010

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