Know Where Your Physician Is

Know Where Your Physician Is

Underestimating the importance of a place of service (POS) code can be a costly mistake.

Medicare administrative contractors (MACs) require considerable information before they’ll pay a claim for services rendered to a Medicare patient. Generally speaking, the claim must include the patient’s and physician’s identification (who), the procedures or supplies (what), the place of service (where), the date of service (when), and the diagnoses (why). Trouble ensues when any of these essential bits of information are missing or incorrect. Ask any MAC and they’ll tell you: The wrong POS code is one of the most common submission errors.

OIG Is Watching

MACs aren’t the only entities keeping track of Medicare claims. The Office of Inspector General (OIG) keeps a vigilant eye on the top reasons claims are improperly paid. In the OIG’s Work Plan for Fiscal Year 2015, the agency said it was aware  physicians do not always correctly code non-facility POS, and that it intended to review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers (ASCs) and hospital outpatient departments. This isn’t speculation on the OIG’s part. In October 2004, for example, the OIG audited Wisconsin Physicians Service (WPS) Health Insurance Corporation to determine the extent of Medicare Part B overpayments the MAC made to physicians for billing with incorrect POS codes. The audit showed that Medicare overpaid physicians by as much as $742,510 over two years  (2001-2002). Seventy-nine of 100 sampled physician services performed in a facility were billed incorrectly using the “office” POS code (11).

Why Should You Care? 

Physicians are paid more for services performed in a non-facility setting, such as a physician’s office, than they are for services performed in a hospital outpatient department or ASC. When a physician incorrectly codes the POS, he or she could potentially be paid either too much or too little. Either way, the physician is paid in error and could be accused of Medicare fraud and HIPAA non-compliance.

Enter the Right Location

The POS code set, maintained by the Centers for Medicare & Medicaid Services (CMS), provides setting information payers need to appropriately pay Medicare and Medicaid claims. POS codes for which physicians’ services are paid at the facility rate include: 19 – Outpatient Hospital – Off Campus 21 – Inpatient Hospital 22 – Outpatient Hospital – On Campus 23 – Emergency Room – Hospital 24 – Medicare-participating Ambulatory Surgical Center (ASC) 26 – Military Treatment Facility 31 – Skilled Nursing Facility (SNF) for a Part A Resident 34 – Hospice – Inpatient Care 41 – Ambulance – Land 42 – Ambulance – Air or Water 51 – Inpatient Psychiatric Facility 52 – Psychiatric Facility – Partial Hospitalization 53 – Community Mental Health Center 56 – Psychiatric Residential Treatment Center 61 – Comprehensive Inpatient Rehabilitation Facility POS codes for which physicians’ are paid at the non-facility rate include: 01 – Pharmacy 03 – School 04 – Homeless Shelter 09 – Prison/Correction Facility 11 – Office 12 – Home or Private Residence of Patient 13 – Assisted Living Facility 14 – Group Home 15 – Mobile Unit 16 – Temporary Lodging 17 – Walk-in Retail Health Clinic 20 – Urgent Care Facility 25 – Birthing Center 32 – Nursing Facility and Skilled Nursing Facilities (SNFs) to Part B Residents 33 – Custodial Care Facility 49 – Independent Clinic 50 – Federally Qualified Health Center 54 – Intermediate Health Care Facility/Mentally Retarded 55 – Residential Substance Abuse Treatment Facility 57 – Non-residential Substance Abuse Treatment Facility 60 – Mass Immunization Center 62 – Comprehensive Outpatient Rehabilitation Facility 65 – End-stage Renal Disease Treatment Facility 71 – State or Local Health Clinic 72 – Rural Health Clinic 81 – Independent Laboratory 99 – Other Place of Service CMS updates this list occasionally. You should periodically check the official list.

Latest POS Updates

On August 6, 2015, CMS revised the description of POS code 22 from “Outpatient Hospital” to “On Campus – Outpatient Hospital,” and created POS 19 for “Off Campus – Outpatient Hospital.” POS 19 is effective for any claims processed on or after January 1, 2016, regardless of the date of service. Table A provides descriptions that clarify the terms “on campus” and “off campus.” Table A: Newly revised POS codes
POS Code Descriptor
19 A portion of an off-campus hospital provider-based department, which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
22 A portion of a hospital’s main campus, which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
There are far more ambiguous elements required for claims payment — such as documenting medical necessity — that require your attention. Don’t let something as basic as a POS code hold things up. Simply enter the correct POS code in Item 24B on the ASC X12N 837 professional standard electronic claim form to identify the setting for each item or service performed.
Renee Dustman is executive editor at AAPC.

About Has 510 Posts

Renee Dustman, BS, is an executive editor at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. She has more than 20 years experience in print publishing, working in production management and content management. She is also a freelance writer and graphic artist.

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