The Medicare program uses a two-digit (11 = office) numeric place of service (POS) coding structure. The place of service identifies the location where the item was used or the service was performed. A place of service is required for all services and is reported in Item 24B of the CMS-1500 claim form or in the designated electronic formatted field.

Recent medical reviews have identified POS discrepancies with regard to evaluation and management (E/M) services provided in an outpatient hospital facility. If a provider’s physical office is located in a hospital outpatient setting, E/M services should be submitted with POS 22 (outpatient) and not POS 11 (office).

In these situations, the hospital where the office is located is entitled to the facility portion of the E/M reimbursement, and the provider receives the professional fee. When a physician and hospital properly bill POS 22, each is automatically reimbursed the appropriate portion of the E/M payment. However, if a physician bills POS 11, he/she receives both the facility and professional reimbursement. Since the hospital also bills and receives a facility reimbursement, an overpayment to the physician has occurred.

Providers should take care when submitting claims in order to ensure the proper place of service is identified and the correct numeric indicator is used.

References:

• Medicare Carrier’s Manual /Hospital’s Facility Charge in Connection with Clinic Services of a Physician MCM 20.1.1.2 www.cms.hhs.gov/Manuals/IOM/list/
• Medicare National Coverage Determination/Physician’s Office Within an Institution / Publication 100-3 / Section 70.3 www.palmettogba.com/palmetto/providers.nsf/
• Physician/Supplier Guide/Place of Service www.palmettogba.com/palmetto/providers.nsf/