Place of service (POS) plays an essential role in medical billing. It describes the place where the medical or healthcare services were provided. Place of service (POS) code is a key component while filling out the CMS 1500 form or equivalent. Accurate use and understanding of POS code is necessary for healthcare providers, insurance companies, and government agencies. These codes mention the sale of treatment-related items or patient service. The correct use of POS code helps in minimizing the denial rates and maximizing reimbursement.
This comprehensive guide will help you understand what the Place of Service codes are, their importance, use, and location-wise application.
What are Place of Service (POS) Codes?
Place of Service codes, also known as POS codes or POS modifiers, are two-digit numeric code that describes the location where the medical services were provided by the healthcare professional. In other words, doctors, healthcare professionals, and physicians provide medical services in facilities such as hospitals, practices, clinics, or medical offices. These places are highlighted using designated codes defined as Place of Service or POS codes.
POS codes were developed and implemented by the Centers for Medicare and Medicaid Services (CMS). The purpose of these codes was to standardize the healthcare services. Now, all insurance companies such as private payers, Medicare, and Medicaid use these codes. These codes also specify the medium through which the service was given including in-person, via telehealth, or any other means.
POS codes are categorized into two categories list as follows:
- Facility POS Codes
- Non-Facility POS Codes
Importance of Place of Service (POS) in Medical Billing
POS codes indicated the precise reimbursement rates according to service settings and modes. Thus, government agencies make informed decisions or policy adjustments according to the insights. In addition, POS codes are essential in tracking healthcare utilization and navigating the areas with high demand or potential fraud.
Place of Service (POS) codes are important for many reasons such as:
- Correct Reimbursement: POS codes are utilized by insurers to determine the amount to reimburse to the healthcare professional. The use of correct POS is mandatory because different locations can have different reimbursement rates. The use of the correct POS ensures that the provider is paid appropriately.
- Claiming Process: The accurate use of POS codes assesses the claim’s validity if the service provided comes under the patient’s policy.
- Compliance: POS codes comply with government regulations and payer requirements. Incorrect POS codes can lead to payment delays or denied claims impacting the entire revenue cycle.
- Tracking Healthcare Trends: Healthcare organizations utilize valuable data and information to analyze the location and services patients are getting. It helps in future resource planning and allocation for healthcare services.
Now let’s understand the two POS code categories.
Facility POS Codes
Facility POS Codes demonstrate the location where the services are given. These places include hospitals, nursing homes, and skilled nursing centers. These codes are essential in tracking medical care and correct payment against the claims.
These codes include:
- Inpatient Hospital (21)
- Outpatient Hospital (22)
- Emergency Room-Hospital (23)
- Urgent Care Facility (20)
- Skilled Nursing Facility (31)
- Hospice Facility (32)
- Ambulatory Surgical Center (24)
Non-Facility POS Codes
The non-facility POS codes are defined as providing services in facilities or centers other than hospitals. All the service including regular doctor visits, consultations, or physical therapy in nearby clinics comes in non-facility POS codes.
These codes include:
- Office (11)
- Home (12)
- School (03)
- Independent Clinic (49)
What Is The Difference Between Non-facility vs Facility POS Codes?
Non-facility and Facility POS have a major difference in the payment structure. Non-facility POS codes have low reimbursement with no overhead cost associated with running a facility.
Whereas, the facility POS codes have higher reimbursement rates with additional expenses for running a facility. It is essential to mention the right code for accurate and timely reimbursement.
Let’s take a look at the key difference of both:
Feature | Non-Facility POS Codes | Facility POS Codes |
Location Type | Smaller independent medical setting, outside the facility | Large multipurpose building |
Examples of Locations | Home healthcare, doctor’s office, urgent care | Hospitals, nursing homes, clinics, nursing home |
Common POS Codes | POS 11 (Office), POS 12 (Home), POS 20 (Urgent Care Center) | POS 21 (Inpatient Hospital), POS 22 (Outpatient Hospital), POS 31 (Skilled Nursing Facility) |
Size of Facility | Private practice or individual office | Multiple departments with various departments |
Reimbursement Rate | Low | High, with facility cost |
Example of Services | Routine visits | Hospital admissions, outpatient procedures, emergency room visit |
Key Difference | Individual care | Large healthcare institutions |
How to Use Place of Service (POS) Codes?
Place of Service (POS) codes must be utilized in their right structure. So, it is essential to understand that the:
- First-digit denotes the service category
- Second -digit denotes a specific location/service type
So, service code 11 designates an office, clinic, or facility providing direct patient service. Whereas, on-campus-outpatient hospitals with services in the hospital will utilize code 22.
How POS Codes Are Applicable In Healthcare?
POS codes are grouped into four main categories based on the service location. Here’s how POS codes are applied location-wise in healthcare:
1. Facility POS Codes
The facility POS code denotes the services provided in the large facility setting including:
- Inpatient Hospital (21)
- Outpatient Hospital (22)
- Emergency Room-Hospital (23)
- Urgent Care Facility (20)
- Skilled Nursing Facility (31)
- Hospice facility (32)
- Ambulatory Surgical Center (24)
2. Non-Facility POS Codes
These codes denote the services for small settings including:
- Office (11) :
- Home (12)
- School (03)
- Independent Clinic (49)
3. Telehealth POS Codes
These codes denote the services provided through telecommunication mediums including:
- Telehealth (02)
- Store and Forward Telemedicine Services (18)
4. Other POS Codes
Codes are made for specific scenarios such as retail clinic visits, public health clinics, and rural health clinics.
Each code serves a distinct purpose
- Retail Clinic (17)
- Homeless Shelter (04)
- Rural Health Clinic (72)
FAQs
1. What happens if I use the wrong POS code on a claim?
Incorrect POS will lead to claim denials. Insurer asses the provided service based on mentioned codes. So, using the wrong code leads to processing and payment delays. Sometimes, wrong or improper coding leads to an audit or fine.
2. Are POS codes the same as CPT codes?
No, POS codes and CPT codes are not the same. Simply put, CPT codes denote the medical procedure or service performed during a patient visit. Whereas, the POS code describes the location where the service is given. Both serve different purposes yet are equally important for billing.
3. How do POS codes impact telemedicine services?
POS codes are essential in telemedicine services. These codes reflect the location where the medical care is provided to the patient. So, if the healthcare provider has given service with telemedicine from the office to the patient’s home the POS code 11 will be utilized. Thus, accurate coding ensures timely reimbursement.
4. Are POS codes standardized across all insurance companies?
Yes, the Centers for Medicare and Medicaid Services (CMS) has standardized all the POS codes utilized by all the insurance companies.
Conclusion
To conclude, implementing accurate Place of service (POS) codes is essential for timely claims and faster reimbursement. Healthcare providers, by choosing the right claim, can streamline the billing process efficiently. The healthcare provider needs to stay updated in the ever-evolving medical landscape. By keeping up with upgrades and maintaining accurate billing the healthcare provider enhances operational efficiency and delivers quality care.