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.

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Renee Dustman

Renee Dustman

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.
Renee Dustman

About Has 426 Posts

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.

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