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CMS Guidance on Place of Service (POS) Coding

The Centers for Medicare and Medicaid Services (CMS) published Transmittal 2407, entitled "Revised and Clarified Place of Service (POS) Coding Instructions," in February of 2012 with an (at the time) effective date of April 1, 2012. There were many awaiting the February 2012 issuance, as in 2009, CMS attempted to clarify the POS instructions for the professional (PC) and technical components (TC) of diagnostic tests and later rescinded that clarification in anticipation of future guidance.

Time passed, and the February 2012 guidance came somewhat unexpectedly for some. It has since evolved through revisions and delays, and providers faced an April 1, 2013 effective date to implement the POS instructions as noted in the current Transmittal 2613. The instructions essentially revised and added sections to various chapters of the Medicare Claims Processing Manual, including:

  • Chapter 12 and the site of service payment differential;
  • Chapter 13, in which a new section addresses POS instructions for the PC and the TC of diagnostic tests; and
  • Chapter 26, which involves special "consideration provisions" for application of POS to mobile units, walk-in retail clinics, and others.

The amount of revised and added materials is large, and this article highlights some of the more significant impacts that the new guidance might hold for various providers. Some may feel minimal or no impact while others will continue to struggle to accommodate the guidance. In a March 29, 2012 POS transmittal that was eventually rescinded and replaced, CMS:

  • Explained that it was attempting to input and clarify within the instructions when entities may bill for a global diagnostic code;
  • Provided the appropriate address to report for determining the payment locality assignments of global service codes and
    professional interpretive service codes; and very importantly
  • Stated that "clarification on the POS for pathology services will be provided through another change request (CR)."

As of the writing of this article in early March, that pathology clarification has yet to be published, but the vast amount of newly revised materials has left many struggling to accommodate the updated clarifications. There were two very important aspects to the newly issued guidance: correct designation of the POS code and a clarification of the designation of the service location as it pertained to global and PC billing of diagnostic services. The pathology-specific guidance issued in the future will be assumedly very similar to the current guidance with clarification on issues unique to their provision of services.

One of the drivers of the newly issued guidance is stressed in the transmittal itself as "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." They cite OIG findings that show that a significant percent of sampled claims incorrectly reported the POS, and in many cases found that the non-facility rate may have been incorrectly paid.

The POS designation instruction is clear and now clarified. For all services paid under the Medicare Physician Fee Schedule (MPFS), the POS code to be used by physicians and other suppliers shall be assigned as the same setting in which the beneficiary received the face-to-face service, with minimal exceptions. The "face-to face" POS designation guidance should, as they note, cover the majority of services billed to CMS, but they provide distinction of that guidance when there are instances where a face-to-face encounter does not occur (specifically when a physician or practitioner provides the PC or interpretation of a diagnostic test from a distant site). In those cases, CMS instructs providers to assign the POS of the setting in which the beneficiary received the technical service.

In addition to the above, it also mandates that the provider must always use the POS code where the beneficiary is receiving care as a registered inpatient or outpatient of the hospital, regardless of where the beneficiary receives the face-to-face service. Therefore, if a physician is providing care or services to a hospital or facility (inpatient or outpatient), the POS code will reflect that designation. The latest transmittal reiterates that, at a minimum, the reporting of the inpatient hospital (POS 21) or outpatient hospital (POS 22) should be utilized to trigger the facility payment rate. However, if the provider is aware of the exact setting or the beneficiary is a registered inpatient or outpatient, then the appropriate facility POS is to be utilized. Some of the examples provided include emergency department (POS 23), skilled nursing facility (POS 51), and ambulatory surgical center (POS 24). The major goal is to ensure that at a minimum, the facility inpatient or outpatient designation be applied with the most exact facility POS applied as is known to the provider, again noting that POS 22 or 21 may serve as the minimum requirement.

The instructions move beyond the application of the POS code, and further clarify the service location designation instructions. CMS's MLN Matters® Number MM7631, reminds providers that:

"… under the MPFS, payment amounts are based on the relative resources required to provide services and vary among payment localities as resource costs vary geographically as measured by the geographic practice
cost indices (GPCIs). The payment locality is determined based on the locations where a specific service code was furnished. For purposes of determining the appropriate payment locality, CMS requires that the address, including the ZIP code for each service code, be included on the claim form in order to determine the
appropriate payment locality… entered in item 32 on the paper claim… (or its electronic equivalent)."

What does that mean? Typically for most MPFS services, the location where the provider saw the patient would be entered on the claim form in Box 32, but that poses some difficulties for those "remote" services such as the PC of diagnostic tests that may be done without face-to-face visits. What is now required or clarified for the billing of those services?

The guidance specifically clarifies service location submission requirements for global service code billing and the billing of the professional interpretation service only. Global code billing is only allowed when the "same physician or supplier entity
furnishes both the TC and the PC of the diagnostic services and the TC and the PC are furnished within the same MPFS locality." In short, if these supplier entity requirements are met, and, as stated, they are both furnished within the same payment locality, then the location on the claim form can denote where the diagnostic test was performed and the global code can be billed. For those providers who do not meet this narrow requirement or who only bill the professional component, the "interpreting physician… must report the address and ZIP code of the interpreting physician's location on the claim form."