CMS Pub. 100-04, ch. 4, § 250.2.1

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).