What is place of Service
Place of Service denotes the place where the service was rendered within the facility. For e.g. the patient may be an inpatient or an outpatient or in an emergency room or in an ambulatory surgical center. Certain carriers adopt the Medicare coding for Place of service while certain others have their own coding systems. For e.g. Medicare adopts the following places of service:
Inpatient 21,
Outpatient 22,
Office Visit 11,
Emergency Room 23,
Ambulatory Surgical Center 24 and so on.
Place of Service 11 Office
If service provided in the provider billing office then this is the correct POS.
Location, other than a hospital, skilled nursing
facility (SNF), military treatment facility,
community health center, State or local public
health clinic, or intermediate care facility (ICF),
where the health professional routinely provides
health examinations, diagnosis, and treatment.
A test identifier is an internal laboratory code used to more accurately identify a specific test performed
by a laboratory. It should be included when using the following forms:
• CMS-1500; place of service (POS) 11 or 81
POS code 11 used ONLY when
o Services are performed in a separately maintained physician office space in the hospital or on the hospital campus
o Physician office space is not considered a provider-based department of the hospital
O When a physician/practitioner furnishes services to a patient in a Medicare-participating ASC, the POS code 24 shall be used
O Physicians/practitioners are not to use POS code 11 (office) for ASC based services o Meets all other requirements for operating as a physician office at the same physical location as the ASC
o “Distinct entity” criteria defined in the ASC State Operations Manual
Place of Service 12 Home
Place where the patient receives care in a private residence. Usually patient home.
Location, other than a hospital or other facility,
where the patient receives care in a private
residence
Hospital
Inpatient hospital. If the patient treated in hospital more than 24 hours use this POS.
A facility, other than psychiatric, which primarily
provides diagnostic, therapeutic (both surgical
and nonsurgical), and rehabilitation services by,
or under, the supervision of physicians to patients
admitted for a variety of medical conditions.
Place of Service 22 On Campus Outpatient Hospital
Outpatient hospital.If the patient treated in hospital less than 24 hours use this POS.
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. (Description change effective
January 1, 2016)
Outpatient Hospital: Physicians/practitioners who perform services in a hospital outpatient department will use POS code 22 (Outpatient Hospital) unless the physician maintains separate office space in the hospital or on hospital campus and that physician office space is not considered a provider-based department of the hospital as defined in 42.C.F.R.413.65. Physicians will use POS code 11 (office) when services are performed in a separately maintained physician office space in the hospital or on hospital campus and that physician office space is not considered a provider-based department of the hospital as defined in 42.C.F.R.413.6. Use of POS code 11 (office) in the hospital outpatient department or on hospital campus is subject to the physician self-referral provisions set forth in 42.C.F.R.411.353 through 411.357.
Reporting place of service (POS) codes to Medicare
Physicians are required to report the place of service (POS) on all health insurance claims they submit to Medicare Part B contractors. The POS code is used to identify where the procedure is furnished. Physicians are paid for services according to the Medicare physician fee schedule (MPFS). This schedule is based on a payment system that includes three major categories, which drive the reimbursement for physician services:
• Practice expense (reflects overhead costs involved in providing service(s))
• Physician work
• Malpractice insurance
To account for the increased practice expense physicians incur by performing services in their offices, Medicare reimburses physicians a higher amount for services performed in their offices (POS code 11) than in an outpatient hospital (POS 22-23) or an ambulatory surgical center (ASC) (POS 24). Therefore, it is important to know the POS also plays a factor in the reimbursement.
Note: Check with individual payers (e.g., Medicare, Medicaid, other private insurance) for reimbursement policies regarding POS codes.
Important facts when filing a claim to Medicare
• The POS is a required field, entered in the 2400 Place of Service Code loop (segment SV105) of the 837P electronic claim or Item 24B on the CMS-1500 paper claim
• The name, address and zip code of where the service(s) were actually performed is required for all POS codes, and is entered in Item 32 on the CMS 1500 claim form or in the corresponding loop on its electronic equivalent
• Must specify the correct location where the service(s) is performed and billed on the claim, since both the POS and the locality address are components of the MPFS
• If the POS is missing, invalid or inconsistent with procedure code on claim form it will be returned as unprocessable (RUC)
• For example, POS 21 (inpatient hospital) is not compatible with procedure code 99211 (Establish patient office or other outpatient visit)
• If a provider specialty other than “69” (Clinical laboratory-billing independently) bills a claim with a POS 81 (Independent laboratory) it will be denied with a claim adjustment reason code (CARC) CO5, refer to Washington Publishing Company (WPC) website http://www.wpc-edi.com/reference/ external link.
Helpful hints for POS codes for professional claims
• Implement internal control systems to prevent incorrect billing of POS codes
• Keep informed on Medicare coverage and billing requirements
• For example, billing physician’s office (POS 11) for a minor surgical procedure that is actually performed in a hospital outpatient department (POS 22) and collecting a higher payment is inappropriate billing and may be viewed as program abuse
Revised and Clarified Place of Service (POS) Coding Instructions
In addition to establishing a national policy for the correct assignment of POS
codes, instructions are provided for the interpretation or Professional Component (PC) and
the Technical Component (TC) of diagnostic tests. Please make sure your billing staff is
aware of these changes.
Under Medicare, the correct POS code assignment is also required on the paper CMS 1500 Claim Form (or its electronic equivalent). While CMS currently maintains the National POS code set, it is used by all other public and private health insurers, including Medicaid.
At the time a POS code is developed, CMS determines whether a MPFS facility or nonfacility payment rate is appropriate for that setting and Medicare contractors are required to make payment at the MPFS rate designated for each POS code. Under the MPFS, physicians and other suppliers are required to report the setting, by selecting the most appropriate POS code, in which medically necessary services are furnished to beneficiaries. While Medicare contractors cannot create new POS codes, they are instructed to develop local policies that develop or clarify POS setting definitions in situations where national POS policy is lacking or unclear.
The importance of this national policy is underscored by consistent findings, in annual and/or biennial reports from Calendar Year (CY) 2002 through CY 2007, by the Office of the Inspector General (OIG) that physicians and other suppliers frequently incorrectly report the POS in which they furnish services. This improper billing is particularly problematic when physician and other suppliers furnish services in outpatient hospitals and in Ambulatory Surgical Centers (ASCs). In a sample of paid services (for services possessing both non-facility and facility practice expenses), the OIG found a significant percent of the sampled physician/practitioner claims were incorrectly reported by physician/practitioners as occurring in the office POS when those services were furnished in outpatient hospitals or ASCs. As such, these claims were paid by the Medicare contractor at the non-facility rate — rather than the lower facility MPFS payment rate assigned to the POS codes for outpatient hospitals and ASCs.
The OIG has called on CMS to strengthen the education process and reemphasize to physicians (including non-physician practitioners and other suppliers) and their billing agents the importance of correctly coding the POS. Consequently, CR7631 adds special considerations provisions regarding use of POS codes 22 and 24, for outpatient hospitals and ASCs.
A previous CMS instruction, Transmittal 1873 (now rescinded) regarding the assignment of POS codes, instructed physicians to use the 2-digit POS code to describe where he/she was physically when rendering the service in this instance, the POS code corresponded to the service location. (CMS 1500 Claim Form Items 24B and 32, respectively, and the corresponding loops on the ANSI 12X N 837-P electronic format information). The service location information is used by physicians/practitioners/suppliers to report the name, address and ZIP code of the service location where they furnished services (e.g., hospital, clinic, or office) and is used by contractors to determine the applicable “locality” and Geographic Practice Cost Index (GPCI)-adjusted payment for each service paid under the MPFS.
CR7631 establishes that for all services – with two (2) exceptions — paid under the MPFS, that the POS code to be used by the physician and other supplier will be assigned as the same setting in which the beneficiary received the face-to-face service. Because a face-to-face encounter with a physician/practitioner is required for nearly all services paid under the MPFS and anesthesia services, this rule will apply to the overwhelming majority of MPFS services. In cases where the face-to-face requirement is obviated such as those when a physician/practitioner provides the PC/interpretation of a diagnostic test, from a distant site, the POS code assigned by the physician /practitioner will be the setting in which the beneficiary received the (Technical Component (TC) of the service. For example: A beneficiary receives an MRI at an outpatient hospital near his/her home. The hospital submits a claim that would correspond to the TC portion of the MRI. The physician furnishes the PC portion of the beneficiary’s MRI from his/her office location – POS code 22 will be used on the physician’s claim for the PC to indicate that the beneficiary received the face-to-face portion of the MRI, the TC, at the outpatient hospital.
Facility and Non-Facility Payment Assignments – POS code list
The list of settings where a physician’s services are paid at the facility rate include:
** Inpatient Hospital (POS code 21)
** Outpatient Hospital (POS code 22)
** Medicare-participating Ambulatory Surgical Center (ASC) for a Healthcare Common Procedure Coding System (HCPCS) code included on the ASC approved list of procedures (POS code 24)
** Medicare-participating ASC for a procedure not on the ASC list of approved
procedures with dates of service on or after January 1, 2008. (POS code 24)
** Military Treatment Facility (POS code 26)
** Skilled Nursing Facility (SNF) for a Part A resident (POS code 31)
** Hospice – for inpatient care (POS code 34)
** Ambulance – Land (POS code 41)
** Ambulance – Air or Water (POS code 42)
** Inpatient Psychiatric Facility (POS code 51)
** Psychiatric Facility — Partial Hospitalization (POS code 52)
** Community Mental Health Center (POS code 53)
** Psychiatric Residential Treatment Center (POS code 56)
** Comprehensive Inpatient Rehabilitation Facility (POS code 61)
** Emergency Room-Hospital (POS code 23)
Physicians’ services are paid at non-facility rates for procedures furnished in the following settings:
** Pharmacy (POS code 01)
** School (POS code 03)
** Homeless Shelter (POS code 04)
** Prison/Correctional Facility (POS code 09)
** Office (POS code 11)
** Home or Private Residence of Patient (POS code 12)
** Assisted Living Facility (POS code 13)
** Group Home (POS code 14)
** Mobile Unit (POS code 15)
** Temporary Lodging (POS code 16)
** Walk-in Retail Health Clinic (POS code 17)
** Urgent Care Facility (POS code 20)
** Nursing Facility and Skilled Nursing Facilities (SNFs) to Part B residents – (POS code 32)
** Custodial Care Facility (POS code 33)
** Independent Clinic (POS code 49)
** Federally Qualified Health Center (POS code 50)
** Intermediate Health Care Facility/Mentally Retarded (POS code 54)
** Residential Substance Abuse Treatment Facility (POS code 55)
** Non-Residential Substance Abuse Treatment Facility (POS code 57)
** Mass Immunization Center (POS code 60)
** Comprehensive Outpatient Rehabilitation Facility (POS code 62)
** End-Stage Renal Disease Treatment Facility (POS code 65)
** State or Local Health Clinic (POS code 71)
** Rural Health Clinic (POS code 72)
** Independent Laboratory (POS code 81)
** Other Place of Service (POS code 99)
** Birthing Center (POS code 25)
Using the Correct Place of Service Code for Professional Component Claims Rendered in a Hospital Setting
Due to different referral and authorization requirements based on where services are rendered, it is important that your claim is submitted with the correct Place of Service code. The Place of Service code also affects how your claim is routed and which authorization/referral is utilized. Please verify whether the Member was in the Emergency Room, admitted on an inpatient basis, or if he or she received outpatient services and submit the claim with the corresponding Place of Service code. When the incorrect Place of Service code is submitted, your claim may be denied due to “no authorization.” For example, if a claim is incorrectly submitted with an inpatient Place of Service code, and the Member was in the Emergency Room, there would not be an inpatient authorization on file. Therefore, your claim would be denied due to “no authorization.” Please utilize the correct Place of Service code from the list below:
Description Code
Office 11
Home 12
Mobile diagnostic unit 15
Urgent care facility 20
Inpatient hospital 21
Outpatient hospital 22
Emergency room hospital 23
Ambulatory surgical center 24
Birthing center 25
Military treatment facility 26
Skilled nursing facility 31
Nursing facility 32
Custodial care 33
Hospice 34
Ambulance – land 41
Ambulance – air or water 42
Inpatient psychiatric facility 51
Psychiatric facility partial hospitalization 52
Community mental health center 53
Intermediate care facility/mentally retarded 54
Residential substance abuse 55
Psychiatric residential treatment center 56
Comprehensive inpatient rehabilitation facility 61
Comprehensive outpatient rehabilitation facility 62
End-stage renal disease facility 65
State or local public health clinic 71
Rural health clinic 72
Independent lab 81
Other unlisted facility 99
For full place of service list.
