Medicare requests refunds of incorrect HPSA bonus payments

July 15, 2013

Medicare pays a 10 percent bonus for services rendered in a Health Professional Shortage Area (HPSA). Physicians practicing in zip codes that fall completely within a designated HPSA do not need to do anything to receive the bonus payment. Bonus payments are paid automatically based on the place of service zip code.

Each year the Centers for Medicare and Medicaid Services (CMS) receives a zip code file from the Health Resources and Services Administration identifying the zip codes classified as HPSAs. Zip codes may be added or withdrawn each year.

CMA has learned that the zip code files provided to the Medicare contractors for the calendar year 2012 contained errors that incorrectly identified some zip codes as eligible for the HPSA bonus. Corrected files were eventually loaded into the system, but not before bonus payments had been improperly made for the first two quarters of 2012 and part of the third quarter, resulting in overpayments. Physicians are now receiving Overpayment Refund Request letters from Palmetto asking for the monies to be returned within 30 days.

The zip codes and counties affected are:

CountyZip Codes
Marin94924; 94937; 94956; 94973
Mendocino95445; 95468
Sacramento95820; 95824
San Benito95023
San Bernardino92277; 92316
San Francisco94134
San Joaquin95366
Santa Clara95020; 95023
Sonoma94954; 95433; 95476

Overpayments are Medicare funds a provider, physician, supplier or beneficiary has received in excess of amounts due and payable by Medicare. Once a determination of overpayment has been made, the amount is a debt owed to the United States Government for which they will require repayment, regardless of who caused the error that resulted in the incorrect payments.

Physicians have various options related to overpayment requests, including a redetermination, voluntary refund, or offsets. The overpayment letter explains these options. If it is not possible to refund the full amount within 30 days, there is also the possibility of an extended repayment plan. Physicians interested in applying for the extended repayment plan option can visit the Palmetto website for the Extended Repayment Plan Form and instructions.


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