Medicare Bonus Payments for Physician Care in Health Professional Shortage Areas

Research center:
Lead researcher:
Project completed:
April 2002
One of the most powerful tools that the federal government has used to increase access to care for rural populations is increased reimbursement for outpatient services. This study uses Medicare claims data to examine the basic patterns of use of the Medicare bonus program and addresses the following questions:
  • What proportion of eligible outpatient claims made to Medicare from designated Health Professional Shortage Areas (HPSAs) receive the permitted 10 percent bonus payment?
  • What is the distribution of bonus payments across physician specialties?
  • Are there major geographic variations in the pattern in which these bonus payments are made (i.e., where are the physicians generally based and where do the beneficiaries reside who obtain most of the bonus payments)?
  • Do the Health Service Areas that are more successful in receiving these bonus payments experience greater physician supply?
Although their urban counterparts are also being analyzed for policy and comparative purposes, emphasis is placed on rural physicians and rural Medicare beneficiaries. The project design consists of a retrospective analysis of Part B claims data for 1998 for the states of Alaska, Idaho, North Carolina, South Carolina and Washington. We are using data from our recent detailed physician supply and requirements work to determine the physician supply by discipline for the designated rural HPSAs. We are also correlating these data with our findings from the data analyses. Appropriate HCFA and AMA data are being linked to the claims files for analysis.


  • An Analysis of Medicare's Incentive Payment Program for Physicians in Health Professional Shortage Areas
    Journal Article
    WWAMI Rural Health Research Center
    Date: 03/2004
    The Medicare Incentive Payment program provides a 10 percent bonus payment to physicians who treat patients in Health Professional Shortage Areas (HPSAs). Results show that physicians eligible for the bonus payments often did not claim them, and physicians who likely did not work in approved HPSA sites, claimed the bonus payments and received them.