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Depending on where you provide services, you may be entitled to take advantage of HCFA's 10 percent incentive payment program.

Fam Pract Manag. 2000;7(5):15-16

How would you like to receive a bonus check from Medicare for the services you provide? You can receive a 10 percent bonus if you meet two requirements:

  • The services must be provided in a designated rural or urban Health Professional Shortage Area (HPSA — pronounced “hip-sa”).

  • The services must be deemed eligible by the Health Care Financing Administration (HCFA).

What's a HPSA, and how do I know if I'm in one?

HPSA designations are determined by the Health Resources and Services Administration, which takes geographic area, population groups and health professional shortages into consideration when making its determinations. The key to getting the bonus is where the service is provided, not where the beneficiary lives or where your office or primary service is located.

Keep in mind that areas can lose or gain HPSA status from time to time, but your Medicare carrier should have a current list of all HPSAs, especially within its service area, and maps that show partial-county HPSAs. You also can find a listing online at or by calling 800-400-2742 (press 2 for shortage designation information).

What services are eligible for the bonus?

Technically, whether a service is eligible for the bonus depends on its “Professional Component/Technical Component” indicator in the Medicare Fee Schedule database. Practically speaking, most professional services and the professional component of services with a professional and a technical component are eligible for the bonus. This includes almost all of the evaluation and management services, such as office visits and hospital visits.

A few services, however, are not eligible for the bonus:

  • “Technical component only” services (e.g., 93005, “Electrocardiogram, routine ECG with at least 12 leads; tracing only, without interpretation and report”);

  • Physical therapy services;

  • Services statutorily excluded from the definition of “physician services” under the Medicare Fee Schedule (e.g., clinical diagnostic laboratory services).

If you are in doubt as to whether or not a service is eligible for the bonus, simply submit it with a HPSA modifier appended and see what happens. If the service is not eligible, the Medicare carrier will notify you on your remittance advice.

How do I claim the bonus?

Claiming the bonus is simple. You just need to add one of two modifiers to the corresponding CPT or HCPCS (Health Care Financing Administration Common Procedure Coding System) numbers on your claims. Specifically, add -QB, “physician providing a service in a rural HPSA,” or -QU, “physician providing a service in an urban HPSA,” as appropriate. You do not have to take assignment on the claim to get the bonus.

As noted, technical components of services are not eligible for the bonus. Do not bill a service that includes both a professional and technical component and attempt to claim the bonus by adding the appropriate modifier to the global code. Your Medicare carrier will instruct you to submit a new bill, because it cannot process the service. In such an instance, you should use two components with separate charges for the professional and technical components.

For example, let's say that you do a routine ECG, including both the tracing and interpretation and the report, in your rural HPSA office. Normally, Medicare would expect you to bill the global code, 93000, “Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report.” However, to claim the HPSA bonus, you must bill the service using the codes for its component parts: 93005, “Electrocardiogram, routine ECG with at least 12 leads; tracing only, without interpretation and report,” for the technical component, and 93010-QB, “Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only,” for the professional component. Note that you should only attach the modifier to the code for the professional component.

If a service does not have separate codes for its technical and professional components (e.g., 71020, “Radiologic examination, chest, two views, frontal and lateral”), you will need to submit the code twice — once with the technical component modifier appended (e.g., 71020-TC) and once with both the professional component and HPSA modifiers appended (e.g., 71020-26-QB).

When and how much do I actually get paid?

Your Medicare carrier will not include the incentive with each claim payment. Instead, it will issue you quarterly payments with an accompanying list of the claims represented in the reimbursement check. This list will include a line-by-line explanation for each assigned claim and a summary for the unassigned claims. These bonus payments are taxable income, and they will be reported to the Internal Revenue Service as such.

The incentive payment in each case is 10 percent of the amount actually paid by Medicare, not the Medicare allowed amount. For example, let's say you provided a service for which Medicare allows $50. Assuming that Medicare paid you the typical 80 percent of the allowed amount (i.e., $40), the incentive payment on this service would be $4.

Could my claims be submitted for reviews?

If you receive a relatively large amount of HPSA bonus money for your area, you may be subject to a related claims review sometime during the year. Each quarter, Medicare carriers must prepare a list of physicians who received incentive payments for the prior calendar quarter, arrange them by the total amount of incentive payments received and select the top 25 percent for a review of five claims each. Your Medicare carrier will review the claims to verify that the place of service indicated was actually within a designated HPSA.

If the carrier verifies all of the claims chosen for review, nothing happens, and you will not be subject to another review for the remainder of the year. However, if the carrier determines that any of the claims should not have been coded for an incentive payment, your Medicare carrier will calculate the discrepancies and request that you pay any corresponding overpayments. They will continue to monitor you until they find you to be compliant.

Is it worth it to make the effort?

It's not often that Medicare offers to pay you a little something extra. In the case of the HPSA bonus, that's exactly what it's doing. All you have to do is keep track of your HPSA designation, make claims for eligible services and use the appropriate modifiers. With this knowledge, you should be able to reap the rewards of the HPSA bonus program.

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