THE MEDICARE PHYSICIAN BONUS PROGRAM: A GOOD PROGRAM THAT ALSO POSES A PROBLEM

The federal government has implemented several important programs aimed at promoting the provision of adequate primary care services in our rural areas.  One such program is the Health Professional Shortage Area (HPSA) program that is administered through the Health Resources and Services Administration.  A second such program is the Medicare Health Professional Shortage Area Physician Bonus program.

Simply put, the HPSA program is a standardized method for identifying whether areas (counties, census tracks, etc.) have enough primary care service locally available to meet the minimal needs of the total population or the low income (Medicaid) population in that area.  An area that does not have enough primary care service available to meet the minimal needs of the entire population in the area is classified as a geographic HPSA.  An area that has enough primary care service available to meet the minimal needs of the entire population, but not enough practitioners providing service to the low income population in the area, is classified as a low income HPSA.  The subject matter of this article applies only to geographic HPSAs.

In Alabama, the Office of Primary Care and Rural Health in the Alabama Department of Public Health works under the direction of the Health Resources and Services Administration in managing the determination of Health Professional Shortages Areas (HPSAs).  A current map of Alabama areas classified as geographical and low income HPSAs can be seen at this office’s website.

Currently, 28 entire rural counties and portions of six additional counties are classified as geographic HPSAs – the red area in the graphic below.  Nearly all of the remaining Alabama areas have more than the minimum level of primary care service locally available, but fall well short of having the optimal amount of that service being provided – the orange area in the graphic below.  Very few areas in Alabama (perhaps only those areas immediately surrounding major medical centers) qualify as having more than the optimal amount of primary care service locally available – the green area in the following graphic.

Being classified as a HPSA can qualify an area for several important benefits.  Being classified as a HPSA is a requirement for participation in specific grant programs.  The severity of the HPSA classification determines where health care practitioners can complete their service obligation in return for receiving educational debt relief through the National Health Service Corps.  Being classified as a HPSA determines where certain types of health clinics can be located.

Another very important benefit that is reserved for areas that are classified as geographic HPSAs is the Medicare Health Professional Shortage Area Physician Bonus program.  This program provides 10 percent bonus payments to physicians who are practicing in geographic HPSAs.   This is a good and well-deserved benefit.  Physicians practicing in areas that do not have enough primary care services locally available are responsible for greater numbers of patients and should be rewarded for this additional practice requirement.  However, there is an unintended consequence from this reward program that serves as a barrier to better health care access.

Areas that work hard and invest in attracting more primary care service providers can have all physicians in that area lose this 10 percent bonus payment for Medicare services rendered if they bring in too much additional service.  If too many primary care providers are brought into the area and the area no longer has less than the minimal service that is locally needed, the classification as a geographic HPSA can be lost with the 10 percent bonus being lost along with that classification.

The end result is that success in securing more than the minimal primary care service needed in an area will result in the punitive loss of these bonus payments.  The bonus program encourages continuing to provide less than the minimal primary care service that areas need.  This disincentive must be changed.

The bonus payments to physicians practicing in geographical HPSAs should be continued.  However, there should be an incentive rather than punishment for providing more than the minimal primary care service needed in an area.  Officials with the federal government readily acknowledge this problem and have attempted to find a solution.  However, a good solution that is not too expensive has been elusive.   (Dale E. Quinney, April 2018)

Do you have a possible solution to this dilemma that tends to have federal programs aimed at benefiting rural health care actually working against each other?  Please share your thoughts.  Promising solutions will be shared with federal and state stakeholders who work daily with this issue or are in positions to implement such changes.