Description :  Primary Physician Provided Service (for determining Physician Scarcity Area (PSA) bonus).

Required for Claims : Critical Access Hospitals (CAHs) Electing the Optional Payment Method (Method II)

Type of Bill: 85X

Coding Guidelines : Applies to services rendered by a primary care physician (e.g. general practice, family practice, internal medicine, OB/GYN)

General Guidelines : This modifier should be used only for critical access hospitals who elect the Method 2 outpatient payment methodology (All-inclusive rate) when the professional services are performed by primary care physician in a physician scarcity area (PSA) The reimbursement is a bonus payment that is separate from the claim payment. PSA payments are made quarterly.

Payment Implications : The CAH will receive 155% of 85% of the physician fee schedule for these services.


 Billing and Payment in a Physician Scarcity Area (PSA)

Section 413a of the MMA 2003 requires that a new 5 percent bonus payment be established for physicians in designated physician scarcity areas. The payment should be made on a quarterly basis and placed on the quarterly report that is now being produced for the HPSA bonus payments.

Section 1861(r)(1), of the Act, defines physicians as doctors of medicine or osteopathy. Therefore, dentists, chiropractors, podiatrists, and optometrists are not eligible for the physician scarcity bonus as either primary care or specialty physicians. Only the primary care designations of general practice, family practice, internal medicine, and obstetrics/gynecology, will be paid the bonus for the ZIP codes designated as primary care scarcity areas. All physician provider specialties are eligible for the specialty physician scarcity bonus except the following: oral surgery (dentist only); chiropractic; optometry; and podiatry. The bonus is payable for dates of service January 1, 2005, through December 31, 2007. The Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 amended §1833(u)(1) of the Social Security Act and has extended payment of that bonus through June 30, 2008.

One of the following modifier(s) must accompany the HCPCS code to indicate type of physician:

AG – Primary Physician

AF – Specialty Physician

Modifiers AG and AF are not required for dates of service on or after January 1, 2005. Modifier AR, physician providing services in a physician scarcity area, may be required

for claims with dates of service on or after January 1, 2005 to receive the PSA bonus. Refer to §250.2.2 of this chapter for more information on when modifier AR is required.

There may be situations when a CAH is not located in a bonus area but its outpatient department is in a designated bonus area, or vice versa. If a CAH has an off-site outpatient department/clinic the off-site department’s complete address, including the ZIP code, must be placed on the claim as the service facility. The FISS must look at the service facility ZIP code to determine if a bonus payment is due.

For electronic claims, the service facility address should be in the 2310E loop of the ASC X12 837 institutional claim format. On the hard copy Form CMS-1450 the address should be placed in “Remarks”; however, the ZIP code placement will be determined by the A/B MAC (A).

Zip Code Files

The CMS provided a file of ZIP Codes for the primary care and specialist care Physician Scarcity Area (PSA) bonus payment. The file is effective for claims with dates of service January 1, 2005 through June 30, 2008. Prior to January 1, 2005, CMS posted on its Web site ZIP Codes that are eligible for the bonus payment. Through regularly scheduled bulletins and list serves, A/B MACs (A) must notify the CAH to verify their ZIP Code eligibility via the CMS Web site.

ZIP Code files for the automated payment of the Health Professional Shortage Area (HPSA) bonus payment will be developed and updated annually. Effective for claims with dates of service on or after January 1, 2009, only services provided in areas that are designated as of December 31 of the prior year are eligible for the HPSA bonus payment. Physicians providing services in areas that were designated as of December 31 of the prior year but not on the automated file may use the AQ modifier. Only services provided in areas that were designated as of December 31 of the prior year but not on the automated file may use the modifier. Services provided in areas that are designated throughout the year will not be eligible for the HPSA bonus payment until the following year, provided they are still designated on December 31. Services provided in areas that are de-designated throughout the year will continue to be eligible for the HPSA bonus through the end of the calendar year.

The contractors and standard systems will be provided with a file at the appropriate time prior to the beginning of the calendar year for which it is effective. This file will contain ZIP Codes that fully and partially fall within a HPSA bonus area for both mental health and primary care services. A recurring update notification will be issued for each annual update. Contractors will be informed of the availability of the file and the file name via an email notice.

Contractors will automatically pay bonuses for services rendered in ZIP Code areas that: 1) fully fall within a designated primary care or mental health full county HPSA; 2) are considered to fully fall in the county based on a determination of dominance made by the United States Postal Service (USPS); or 3) are fully within a non-full county HPSA area. Should a ZIP Code fall within both a primary care and mental health HPSA, only one bonus will be paid on the service. Bonuses for mental health HPSAs will only be paid when performed by psychiatrists.

For services rendered in ZIP Code areas: 1) that do not fall within a designated full county HPSA; 2) are not considered to fall within the county based on a determination of dominance made by the USPS; or 3) are partially within a non-full county HPSA, the CAH must still submit a AQ modifier to receive payment for claims. To determine whether a modifier is needed, the CAH must review the information provided on the CMS Web site for HPSA designations to determine if their location is, indeed, within a HPSA bonus area.

For service rendered in ZIP Code areas that cannot automatically receive the bonus, it will be necessary to know the census tract of the area to determine if a bonus should be paid and a modifier submitted. Census tract data can be retrieved by visiting the U.S. Census Bureau Web site at www.Census.gov.