Place of Service (POS) codes play a crucial role in medical billing and reimbursement, designating where patients received healthcare services. However, mistakes or lack of specificity when assigning POS codes can lead to costly claim denials and revenue loss. This comprehensive guide covers the basics of Place of Service coding so medical billers can maximize reimbursements.
What are Place of Service Codes?
Place of Service codes are two-digit designators included on professional medical claims to indicate the setting where a beneficiary was treated or where a service occurred. All major payers require and rely on accurate POS codes for claims processing. The POS code sets are defined by the Centers for Medicare & Medicaid Services (CMS) and then commonly adopted by commercial insurers. The current list includes over 70 POS codes for various facilities, offices, homes, virtual sites, and more specific locations. Some examples:
11 for physicians’ offices
22 for outpatient hospitals
12 for patient homes
02 for telehealth provided services.
Correct POS codes supply necessary information on service context that impacts reimbursement rates. Certain services provided at different places of service may pay differently or require pre-authorization. (Source: CMS POS Code Set)
Importance of Accurate POS Codes
Precision with Place of Service codes directly affects revenue cycle efficiency and claim reimbursements in the following ways:
Triggers applicable reimbursement rates based on setting
Indicates services met medical necessity criteria
Confirms proper provider facility credentials
Ensures accurate application of modifiers
Allows validation of authorization requirements
Demonstrates adherence to telehealth policies
Avoids potentially inaccurate fraud charges
Imprecise or missing POS codes lead to denied or delayed claims payments. Developing a strong understanding of POS code definitions optimizes medical billing processes.
(Source: AAPC POS Guidelines)
Core Coding Guidelines for POS Codes
When assigning Place of Service codes, medical billers should follow these general CMS guidelines:
Select the POS code for the physical location where the beneficiary received face-to-face services.
For telehealth services, use the POS code for the originating site where the patient was located.
Code facility POS codes based on where the provider saw the patient, not their office location.
Use the POS code that most accurately reflects the service setting.
Avoid vague POS codes like 99 for “other” if a more precise option exists.
Confirm POS codes reflect current payer policies and coverages.
Do not assign separate POS codes for multiple services at the same location.
Support POS codes with documentation if requested by payers.
Adhering to POS coding best practices enhances claims processes and avoids unnecessary follow up or rework.
(Sources: CMS, AMA, AAPC)
Reviewing the Top Place of Service Codes
Here is an overview of the most widely used POS codes that medical billers should understand:
POS 11 – Doctor’s Office: Assign for services rendered in physicians’ private, group, or clinic offices. Cannot be used for hospital outpatient departments.
POS 22 – Outpatient Hospital: Designates treatment provided in the outpatient hospital setting versus the physician office. Impacts facility fees.
POS 12 – Patient Home: Indicates services like home health or physician house calls provided in the patient’s private residence.
POS 31 – Skilled Nursing Facility: Used for nursing home residents receiving skilled medical care or therapy services at the SNF location.
POS 02 – Telehealth: Specifies services were performed via telecommunication technology with the patient at an eligible originating site.
POS 21 – Inpatient Hospital: Denotes care provided to patients admitted to a healthcare facility as inpatients using the facility’s beds.
POS 81 – Independent Lab: Assign for diagnostics like blood tests sent to and performed by an independent, accredited medical laboratory facility.
Familiarity with these major POS codes for hospitals, clinics, remote sites, and labs builds a strong billing foundation. (Sources: WebPT, CareCloud)
Common Claim Denial Reasons Linked to POS
Some typical reasons Place of Service codes lead to claim denials include:
Inconsistent POS and procedure code: Certain procedures only covered in specific settings.
Invalid POS for provider type or specialty performing service.
Not covered POS for billed service, like therapy provided in patient home instead of clinical setting.
Missing or invalid POS codes since some payers require on all claims.
Telehealth POS not reflective of payers’ policies.
POS codes indicating unapproved site-of-service for service requiring pre-authorization.
POS codes not changed when provider performs services at multiple sites like office and hospital.
Careful review of denial explanations tied to POS can help pinpoint gaps in coding knowledge or inconsistencies in code assignment. Targeted POS education and internal audits can address problem areas.
(Source: Navicure)
POS Codes for Common Medical Services
To solidify appropriate POS code usage, below are examples assigning codes to common medical services:
Preventive Care Visit at Clinic: If a doctor sees a patient receiving their wellness exam at the physician’s clinic, report POS 11 for the office setting.
Allergy Testing at Hospital: When allergy skin testing is performed on a patient at the hospital’s outpatient facilities, assign POS 22 for the hospital outpatient department setting.
Speech Therapy House Call: For speech therapy provided by a therapist during a visit to the patient’s private home, designate POS 12 to indicate the home location.
Cataract Surgery at Ambulatory Surgery Center: For facility and professional billing for cataract removal performed at an ASC, report POS 24 for the ambulatory surgical center place of service.
Illness Telehealth Visit: For a live video visit to assess a sick patient virtually, use POS 02 to indicate the telehealth encounter with the patient situated at their home location.
Accurate POS codes like these examples provide critical details to payers on where patients received services, impacting reimbursement rates. (Source: WebPT)
Conclusion
In summary, Place of Service coding is foundational but sometimes complex for clinical billing operations. This guide covers indispensable context and guidelines for appropriately assigning POS codes. A strong command of POS coding protocols is key for mitigating claim denials and securing optimal reimbursement. By outsourcing medical billing to experts like BMMS, practices can reduce POS coding errors that lead to costly denials. The BMMS team stays constantly updated on payer policies and changes impacting POS code usage. They provide ongoing staff education on proper POS code selection for services across all practice settings. BMMS performs internal audits to catch any issues prior to claim submission. If a claim with an incorrect POS does get denied, BMMS leverages their mastery of POS guidelines to successfully appeal the denial. Their end-to-end POS coding knowledge and vigilance optimizes reimbursement.
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