Glossary · Updated Jul 6, 2026
Payment Locality (and how ZIP codes map to it)
A payment locality is the geographic area Medicare uses to set the local cost adjustment for the Physician Fee Schedule. Each locality is identified by a Medicare Administrative Contractor (MAC) and a locality number, and it carries its own set of three GPCIs. Medicare assigns each ZIP code to a locality through a published crosswalk.
Why localities exist
The cost of delivering care varies across the country, so Medicare divides the nation into payment localities and gives each one work, practice-expense, and malpractice GPCIs. Those indexes scale a code's national RVUs up or down, which is why the same code can pay a different amount in two localities. A locality is identified by its MAC (the contractor that processes claims for the area) plus a two-digit locality number.
How ZIP codes map to localities
CMS publishes a ZIP Code to Carrier Locality File that assigns every ZIP to a MAC and locality. Because postal ZIP boundaries and Medicare locality boundaries do not line up perfectly, a small number of ZIP codes fall into more than one locality. Those ZIPs are flagged so that a full nine-digit ZIP+4 is needed to place an address in the correct locality; the rest resolve exactly from the five-digit ZIP.
Resolving an ambiguous ZIP
When a five-digit ZIP spans multiple localities, picking a single amount without the ZIP+4 can be wrong. The honest approach is to return the dominant locality but flag that ZIP+4 is required for a guaranteed match, rather than silently choosing one. The crosswalk is itself versioned by release, so a historical lookup resolves a ZIP the way it was mapped at the time. You can resolve your own ZIP in the locality directory.
Frequently asked
What is the difference between a MAC and a locality?
A MAC (Medicare Administrative Contractor) is the company that processes Medicare claims for a region; a locality is a pricing area within that region. Together, the MAC and the locality number uniquely identify a set of GPCIs.
Can one ZIP code be in two localities?
Yes. A small share of ZIP codes span more than one locality. Those are flagged in the CMS crosswalk and require the full ZIP+4 to resolve to a single locality.
Do locality assignments change?
They can change between releases. Because the crosswalk is versioned, a ZIP always resolves the way it was mapped in the release you are looking at.
Related
Sources
Written from primary CMS sources — see how we source, compute, and verify everything on this site.