Once again, the OIG has included place of service (POS) errors as a focus of its annual Work Plan:

We will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Context—Prior OIG reviews determined that physicians did not always correctly code nonfacility places of service on Part B claims submitted to and paid by Medicare contractors.

POS errors are more than “clerical.” As the work plan explains, “Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ambulatory surgical center.” Therefore, if the assigned POS on a claim is incorrect, payment may be affected.

When assigning POS codes for Medicare claims, the POS must match the setting in which the patient received the service (for face-to-face services), or the setting in which the technical portion of the service was delivered (for non-face-to-face services, such as interpretation of diagnostic test results).

There are two exceptions to the rule:

  1. When a physician/practitioner/supplier furnishes services to a registered inpatient, the inpatient hospital POS code 21 shall be used, irrespective of where the face-to-face encounter occurs.
  2. Physicians/practitioners who perform services in a hospital outpatient department shall use, at a minimum, POS code 22 (Outpatient Hospital) unless the physician maintains separate office space in the hospitalor on the hospital campus and that physician office space is not considered a provider-based department of the hospital (see 42. C.F.R. 413.65). Physicians shall use POS code 11 (office) when services are performed in a separately maintained physician office space in the hospital or on the hospital campus and that physician office space is not considered a provider-based department of the hospital.

The above guidelines were recently updated by Centers for Medicare & Medicaid Services (CMS) Transmittal 2679. For clarification, MLN Matters® Number: MM7631 Revised provides the following 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 [outpatient hospital] 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.”