Otolaryngology Coding Alert

As part of its proposed revisions to the 2003 Physician Fee Schedule, CMS has recommended a number of changes to the "place-of-service indicators" (e.g., 11 for the office, 22 for outpatient hospital). Several place-of-service indicators are now in use for which there is no site-of-service (facility versus nonfacility) designation. The CMS proposal would assign a site-of-service designation to these indicators, as well as revise several existing site-of-service designations. Under the resource-based practice expense methodology, CMS distinguishes practice expense relative value units (RVUs) for nonfacility and facility settings. According to CMS publication 1204-P, "This distinction is needed because of the higher resource costs to the physician in the non-facility setting when the practitioner typically bears the cost of the resources associated with the service. In addition, the distinction ensures that we do not make a duplicate payment for any of the practice expenses incurred in performing a service for a Medicare beneficiary." When the beneficiary is a facility patient, Medicare reimburses the facility for the clinical staff, supplies and equipment while the practitioner receives a generally lower facility practice expense rate. Therefore, changes to the site of service will directly affect physician reimbursement. For 2003, CMS has recommended that the following be considered facility settings: 06 Indian health service provider-based facility 08 tribal 638 provider-based facility 26 military treatment facility (currently designated as a non-facility) 41 ambulance, land; and 42 ambulance, air or water (currently non-facility) 52 psychiatric facility partial hospitalization (currently non-facility) 56 psychiatric residential treatment facility (currently non-facility). CMS has designated the following nonfacility settings: 04 homeless shelter 05 Indian health service freestanding facility 07 tribal 638 freestanding facility 15 mobile unit Note: If a mobile unit provides a service to a facility patient, report the appropriate place-of-service code for the facility. 20 urgent care facility. All other place-of-service indicators not specifically mentioned are designated nonfacility site-of-service locations. For the complete text of CMS 1204-P and a list of current place-of-service indicators, visit the CMS Web site at www.cms.gov/physicians/pfs/default.asp.