Oncology & Hematology Coding Alert

And watch this trap for in-office interpretations.

CMS has announced a new place of service (POS) rule that every oncology and hematology practice needs to know.

The new rule is that the POS code you report for your physician should reflect the "setting in which the beneficiary received the face-to-face service," according to MLN Matters MM7631. CMS has created exceptions to the rule, however, so be sure to read the rule in full and pay attention to each element.

Important dates: The effective date is April 1, 2012, and the implementation date is April 2, 2012.

The Pro Fee POS May Surprise You

Under CMS's announced rule, "providers performing the PC [professional component] of interpretation of tests must use the POS where the face-to-face service -- test -- was performed, i.e. outpatient facility, ASC [ambulatory surgical center], etc.," says Catherine Brink, BS, CMM, CPC, CMSCS, president of NJ-based Healthcare Resource Management.

In case you have any question about whether the rule applies to imaging, the MLN Matters article clearly states that if the patient has an imaging exam at one site and the physician interprets the exam at his office, the POS should reflect where the patient had the exam. You should not base your POS code on where the physician provided the interpretation.

For example: The article provides a sample scenario in which a patient has an MRI at an outpatient hospital. The physician interprets the exam at his office.

For the physician claim, you must decide whether to report office POS 11 for where the physician provided the service or POS 22 for the outpatient hospital where the patient had the exam. Under the new rule, you should report POS 22 because that's where the patient had the outpatient exam.

Caution: Although you designate the outpatient hospital as the place of service, you should report the office's ZIP code in Item 32 of the CMS 1500 (or electronic equivalent), states Transmittal 2407, CR 7631. Using the appropriate ZIP is important both for compliance with CMS instructions and for ensuring payment based on the physician's location.

Forget Transmittal 1873: The new rule to report the POS based on where the patient has the face-to-face service is in direct contrast to the short-lived 2009 Transmittal 1873 (now rescinded) that instructed physicians to choose a POS code based on where the physician was located when he performed the service.

One more note: If a radiologist interprets the exam and you're coding for an oncologist or hematologist who simply reviews the interpretation as part of patient care, include the review in the E/M level rather than reporting a code for the exam. Then report the POS code based on where your physician saw the patient.

An Inpatient Is Always an Inpatient for POS

The MLN Matters article indicates two exceptions to the rule that the face-to-face service location decides the POS.

Inpatient: If the patient is an inpatient of a hospital, then the POS will be the inpatient hospital POS 21 regardless of where the face-to-face visit occurs.

Outpatient: If the physician provides services to a hospital outpatient, "including in a provider-based department of that hospital," then the POS should be outpatient hospital POS 22, the MLN article states.

This rule does not change the fact that an office is an office, though. If the physician has separately maintained office space on the hospital campus (space that meets the regulatory requirements to be considered an "office"), and the patient presents for an appointment at that office, services performed in that space will still be office POS 11.

Best bet: Get your legal team's opinion on proper application of the POS rules. And remember that CMS allows local contractors to provide guidance about which POS code applies in unclear cases.

Pay Particular Attention to ASCs

Incorrect POS reporting for services performed in ASCs was one of the main motivators behind CMS providing these new and revised instructions. The ASC POS code is 24, and you should apply it when the face-to-face service occurs at an ASC.

To clarify, similar to the hospital rule above, if the physician has a separately maintained office space at the same physical location as the ASC, and the office meets "distinct entity" requirements, then report POS 11 for services performed in that office. But if the service occurs in the ASC, then you should report POS 24.

Mobile Unit at Your Office? Think POS 11

If your practice has a mobile unit, MLN Matters highlights the existing rule: "If the mobile unit is serving an entity for which another POS code already exists, providers should use the POS code for that entity. However, if the mobile unit is not serving an entity which could be described by an existing POS code, the providers are to use the Mobile Unit POS code 15."

For example, if the unit is used while parked at your office, use the office POS 11.

Think Twice About 34 for Outpatient Hospice

The POS code reported for a hospice patient varies depending on where the service takes place.

If the patient under the hospice benefit is in an inpatient setting, report POS 34 (Hospice -- for inpatient care). If the patient received the service in an outpatient setting, report the POS based on where the service takes place, such as office (POS 11), outpatient hospital (POS 22), or the patient's home (POS 12).

Remember: POS 12 for "home" refers to a residence that isn't operated by the hospice or other care-giving entity. For example, if the patient resides at a nursing home, you should report POS 32 (Nursing facility and skilled nursing facilities [SNFs] to Part B residents) rather than POS 12 (Home or private residence of patient).

Keep Your Practice in the Clear

One of the main reasons CMS is so concerned about proper POS coding is that the agency doesn't want to overpay providers (non-facility rates are higher than facility rates in the fee schedule because a physician in a facility doesn't bear the same overhead costs as one in his own space). As a coder, not only do you need to be sure you're reporting the proper POS, you also need to be sure you append modifier 26 (Professional component) when you are reporting only the professional component of a code split into professional and technical components. The professional/technical component is common with diagnostic tests.

Smart move: Ensure your practice's providers, coders, and billers understand this new POS change so your practice will report the appropriate POS on the CMS claim form, Brink advises.

Additionally, other contractual payers may follow CMS's footsteps and adopt this POS change, so be on the watch, Brink says.

Resources: Take time to read Transmittal 2407, CR 7631, at www.cms.gov/transmittals/downloads/R2407CP.pdf and its accompanying MLN Matters article at www.cms.gov/MLNMattersArticles/Downloads/MM7631.pdf.