• Loading...
    Contact Us

    Center For Health Statistics
    Department of State Health Services
    1100 West 49th Street
    Austin, Texas 78756-3199

    Phone: (512) 776-7261
    Fax: (866) 239-7344

    Email Center for Health Statistics

Medicare Bonus Payment



In accordance with §1833(m) of the Social Security Act, physicians who provide covered professional services in any rural or urban HPSA are entitled to an incentive payment. Beginning January 1, 1989, physicians providing services in certain classes of rural HPSAs were entitled to a 5-percent incentive payment. Effective January 1, 1991, physicians providing services in either rural or urban HPSAs are eligible for a 10-percent incentive payment. It is not enough for the physician merely to have his/her office or primary service location in a HPSA, nor must the beneficiary reside in a HPSA, although frequently this will be the case. The key to 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 incentive payment as long as the specific location of the service is within an area designated as a HPSA. On the other hand, a physician may have an office in a HPSA but go outside the office (and the designated HPSA area) to provide the service. In this case, the physician would not be eligible for the incentive payment. Your responsibilities include:

  • Informing the physician community of these provisions;
  • Detailing to interested physicians those locations which are HPSAs and the proper manner in which to code claims to qualify for the incentive payment;

  • Modifying your claims processing system to recognize and appropriately handle eligible claims;

  • Paying physicians the incentive payments; and

  • Performing post-payment review samples of paid claims to ensure that they were eligible for the incentive payment.

3350.1 Informing the Physician Community.--At the time you are notified that an area has been classified (or declassified) as a HPSA, inform the applicable physician community of the status of the area, the requirements for eligibility for the incentive payment, and the mechanism for claiming payment. (See .3350.3-3350.5.) To assure that all physicians understand these requirements, publish a general summary bulletin on an annual basis.

3350.2 Detailing HPSA Locations.--HPSA designations are made by the Shortage Designation Branch (SDB) of the Public Health Service (PHS). Upon receipt from DSD, HCFA sends you individual notices of HPSA status changes (initial classification of HPSA areas or deletion of existing ones). Effectuate these changes as of the first day of the second month after you receive them. For example, any notice you receive during August is effective for physician services provided on or after October 1. Before effectuating these changes, you must ready your system for acceptance of the change and notify all physicians providing services in the impacted area who may be eligible for the incentive payment. Each quarter, HCFA also provides you with an updated SDB comprehensive listing of all HPSAs in your jurisdiction. Use this listing as a control to assure that all changes are accounted for and effectuated.

Although some HPSAs span entire counties (or other territorial subdivisions within a State), typically, they represent only sections of counties. For partial-county HPSAs, prepare and distribute to physicians local maps which clearly delineate the HPSA areas. Notify physicians about HPSA areas by:

Rev. 1650/Page 3-90.37





Publishing a list of HPSAs and allowing physicians to call you if they need assistance in determining whether their practice locale falls within the boundaries of a HPSA; and issuing maps of partial-county HPSAs that make it easier for physicians to determine if they provide services within designated HPSA areas.

NOTE: Urban HPSAs, particularly in large metropolitan areas, are usually identified by census tract. To help you identify specific street addresses within a census tract, secure a copy of the Census Tract Street Address Index (CTSAI) from:

Data User Services Division
Customer Service Branch
Bureau of the Census
Washington, D.C. 20233

3350.3 Claims Coding Requirements.--Physicians must indicate that their services were provided in an incentive-eligible rural or urban HPSA by using one of the following modifiers:

QB - physician providing a service in a rural HPSA; or

QU - physician providing a service in an urban HPSA.

3350.4 Payment.--The incentive payment is 10 percent of the amount actually paid, not the approved amount. Pay the incentive payment for services identified on either assigned or unassigned claims.

Do not include the incentive payment with each claim payment. Establish a quarterly schedule for issuing incentive payments. These payments are taxable and must be reported to the IRS.

Prepare a list to accompany each payment. Include a line item for each assigned claim represented in the incentive check and a "summary" item showing the number of unassigned claims represented. The sum of the line items and the "summary" item should equal the amount of the check.

3350.5 Services Eligible for HPSA Bonus Payments.-- Information in the Professional Component/Technical Component (PC/TC) Indicator Field of the Medicare Physician Fee Schedule Database.--Use the information in the Professional Component/Technical Component (PC/TC) indicator field of the Medicare Physician Fee Schedule Database to identify professional services eligible for HPSA bonus payments. The following are the rules to apply in determining whether to pay the bonus on services furnished within a geographic HPSA and billed with a QB or QU modifier, as appropriate.

PC/TC Indicator HPSA Payment Policy

0: Pay the HPSA bonus.

1: Globally billed. Only the professional component of this service qualifies for the HPSA bonus payment. The HPSA bonus cannot be paid on the technical component of globally-billed services.

Page 3-90.38/Rev. 1650


Note: External links to other sites are intended to be informational and do not have the endorsement of the Texas Department of State Health Services. These sites may also not be accessible to people with disabilities.

  • Loading...
Last updated September 03, 2010