PSA - Part B
Section 413a of the Medicare Modernization Act (MMA) required that a 5 percent bonus payment be established for physicians in designated physician scarcity areas. Physician scarcity designations are based on the lowest primary care and specialty care ratios of Medicare beneficiaries to active physicians in every county. In addition, based on rural census tracts of metropolitan statistical areas identified through the latest modification of the Goldsmith Modification (i.e., Rural-Urban Commuting Area Codes), additional physician scarcity areas were identified based on the lowest primary care and specialty care ratios of Medicare beneficiaries to active physicians in each identified rural census area.
The incentive payment is issued quarterly. It is 5 percent of the amount actually paid by Medicare, not the approved amount, for services performed in a PSA. The PSA bonus will be paid on eligible services rendered on or after January 1, 2005, through June 30, 2008.
Medicare will automatically pay the physician scarcity bonus on a quarterly basis for services provided in zip code areas that fully fall within a county designated as a PSA, partially fall within a county designated as a PSA and are considered to be dominant for that county based on a determination by the United States Postal Service (USPS), or fall within a rural area identified through the latest modification of the Goldsmith Modification that is determined to be a PSA.
In some cases, a service may be provided in a county that is considered to be a PSA, but the zip code is not considered to be dominant for that area. The bonus payment cannot automatically be made. In order to receive the bonus for those areas, physicians must include the following modifier on the claim:
AR - Physician providing service in a Physician Scarcity Area.
Please check the CMS website at http://www.cms.hhs.gov/hpsapsaphy
sicianbonuses/01_overview.asp? 
for listings of areas eligible for the PSA bonus. Scroll down the page to the Downloads section and select the PSA file for the appropriate provider type.
Only the provider designations of General Practice (01), Family Practice (08), Internal Medicine (11), and Obstetrics/Gynecology (16) will be eligible for the bonus for primary care PSAs. All other physician provider specialties will be eligible for the specialty physician scarcity bonus for specialty PSAs.
Please note, dentists, chiropractors, podiatrists, and optometrists are not eligible for the physician scarcity bonus as either primary care or specialty physicians. Also, non-physician practitioners, such as physician assistants and nurse practitioners, are not eligible for the bonus payment.
Payment is based on where the service is performed and not on the address of the beneficiary. A single service may be eligible for the PSA bonus and the HPSA bonus.
For all places of service other than "home," in order to be considered for the HPSA and/or PSA bonus, physicians must enter the address and zip code of where the service was provided. This information should be entered in ANSI 4010A1 Loop 2310D 2-250-NM103 (FA, TL, 77, LI) for the electronic HIPAA 4010A1 format. (This would be Item 32 of the CMS 1500 claim form.)
Physicians can choose not to receive any PSA bonus payments on services that would otherwise be eligible. Please contact us if you choose not to receive any bonus payment.
Incorrect use of the PSA modifier can result in a violation of Medicare law. On a post-payment basis, Medicare will monitor claims submitted with the AR modifier to verify eligibility for the bonus payment. Please visit the WPS Medicare Website by clicking here for Medicare contact information for questions regarding PSA.
Page Last Updated: Wednesday, 31-Dec-2008 10:48:30 CST
