Health Professional Shortage Area

Table of Contents

• What is a HPSA
• Eligible Providers
• HPSA Eligibility and Designation
• Claim Coding Requirements and Payment
• Locating a HPSA Designation on HRSA Website

What Is a HPSA?

A HPSA is an urban or rural area designated as having a shortage of health care professionals. Physicians and specific mental health provider specialties are eligible to receive quarterly bonus payments for covered professional services provided in an underserved area. If an area is designated as both a primary care and mental health HPSA, only one bonus payment will be made for a covered service. The bonus is based on the ZIP code of the address where services were rendered.

To determine if your area is a designated HPSA area, visit CMS' Physician Bonuses web page. Use the ZIP code file in the downloads section as reference each calendar year. There are separate files for primary care and mental health.

Eligible Providers

HPSA bonus payments are limited to physicians only. Eligible physician specialties include medical doctors, psychiatrists, doctors of osteopathy, dentists, doctors of podiatric medicine, licensed chiropractors and optometrists.

HPSA Eligibility and Designation

The key to HPSA eligibility is where the service is actually provided (i.e., place of service). For example:

• A physician providing a service in the office, the patient’s home, or  a hospital qualifies for the bonus payment as long as the specific location of the service is within an area designated as a HPSA.
• A physician may have an office in a HPSA but go outside the designated HPSA area to provide the service. In this case, the physician would not be eligible for the bonus.
• The physician office address is not located within a HPSA, the physician is not entitled to a bonus payment for services provided at this address. However, if this same physician travels to a nursing facility, the patient’s home, or a hospital within a HPSA designated area, the physician would be eligible for the bonus.

Claim Coding Requirements and Payment

The CMS provides Medicare contractors with an annual ZIP code file that includes all areas that are considered fully designated HPSAs. The HPSA physician bonus is automatically applied to claims for services that are rendered in a ZIP code that is designated by CMS.

For services rendered in a ZIP code that is not on CMS’s annual ZIP code file, physicians must submit payment modifier AQ on their eligible claims. All claims submitted with modifier AQ are subject to review.

• AQ ‒ Service was provided in a HPSA
• ZIP codes that are designated throughout the year are not eligible for the bonus payment until the following year.

The provider must also report the address where the service was performed in Item 32 of the CMS-1500 Claim Form or its electronic equivalent

Locating a HPSA Designation on HRSA Website

Verify the service location is a HPSA by using the look-up tool on the Health Resources and Services Administration (HRSA) website.

Enter the service location address and click Search.

Your search will return a “Yes” or “No” to identify if the location is a HPSA.

*Please ensure you are looking at the eligibility for the Mental Health or Primary Care. Here is an example search.

Reviewed 9/11/2024