It’s Time to Submit Your Claim: Did You Report the Correct Place of Service Code?

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The September 2015 and the June 2016 Business Briefs articles clearly described Place of Service (POS) codes because physicians and other qualified healthcare professionals (QHPs) were experiencing Medicare repayments when they did not report the correct POS codes on their claim forms.

Now, 7 years later, denials and repayments for improper use of POS codes are still frequently occurring. This issue has been compounded because 1) physicians and QHPs are providing wound/ulcer management services in many sites of care, and 2) the COVID-19 public health emergency (PHE) waivers relaxed the locations where physicians and QHPs can perform some services and procedures.

Because inaccurate POS codes on claims can cause either under- or overpayments, physicians/QHPs should establish a process for documenting in the medical record and informing their coders and billers exactly where each patient encounter occurs. If physicians/QHPs always encounter patients in one site of care, they should verify the correct POS code for that site and share the code with their coders and billers. If physicians/QHPs have patient encounters in different sites of care throughout the day or week, they should verify the accurate POS code for each site of care, document in the medical record where the encounter took place and establish a process for recording the correct POS code on each patient’s charge sheet (paper or electronic).

If physicians/QHPs do not consistently document and record the correct place of service, their coders and billers may report the incorrect POS code on the claims, which are submitted under the physicians’/QHPs’ names. Following is a real-life example of how easily this mistake can occur:

This author recently consulted with a group of physicians/QHPs who began providing wound/ulcer management in their offices 6 years ago. They outsourced their billing to a company that always reported the office POS code (11) on their claims.

These physicians/QHPs quickly became well-known in the community and 5 years ago began providing wound/ulcer management services/procedures to patients in both hospital owned outpatient wound/ulcer management provider-based departments (PBDs) that were on-campus (POS code 22) and off-campus (POS Code 19), skilled nursing facilities (POS 31), nursing facilities (POS 32), assisted living facilities (POS 13), and even in patients’ homes (POS 12).

These physicians/QHPs were recently audited and faced a sizeable repayment because they did not document where they performed each encounter, did not record the pertinent place of service code on each patient’s charge sheet, and did not inform their billing company that they were providing wound/ulcer management services/procedures outside of their office. Therefore, the billing company reported all the encounters with POS 11. Because the Medicare Physician Fee Schedule allocates a higher payment (as much as 40% higher) for work performed in the office, nearly 90% of the claims reported during the last 5 years were overpaid. The repayment and fines for this oversight were staggering.

In case you are thinking this will never happen to you because you perform your coding and billing in-house, do not assume your coding and billing staff know which encounters were performed outside the office. This author/consultant has collaborated with many physicians/QHPs who did not document where they had patient encounters and did not establish a process for reporting the site of care where each encounter occurred. Consequently, their coders and billers reported all of this work as POS 11 (office). In fact, many of the coders and billers challenged my direction about reporting accurate POS codes by saying, “It is my job to obtain the maximum reimbursement for the physicians/QHPs. I am doing this billing from the office. Why should I report a different POS code when POS 11 generates the most revenue?” When I educated the coders and billers that the POS code typically designates the place where the physicians/QHPs had the patient encounter, not where the coding and billing was performed, they always appeared surprised.

How to Avoid Mistakes With POS Codes

Many wound/ulcer management stakeholders act like the POS codes are a mystery. Nothing is further from the truth. The American Medical Association realizes the importance of reporting the correct POS codes on claims and publishes the entire list of POS codes in the front of every year’s Current Procedural Terminology (CPT^®) manual. The Centers for Medicare & Medicaid Services (CMS) and every Medicare Administrative Contractor (MAC) publishes the POS codes on their websites. In addition, the CMS has published numerous MLN Matters newsletters about POS codes, and the MACs have held numerous free-of-charge webinars about the appropriate use of POS codes.
 
Because these resources are excellent and easily accessible, this article will not repeat that information or the information that was published in previous Business Briefs articles. Instead, the remaining portion of this article will review some of the most common POS mistakes that this author/consultant has seen made by wound/ulcer management stakeholders.

    1.         Submitting claims without a POS code or with an invalid code. NOTE: The address and ZIP code entered in the service location on the claim and the POS code should match.
Example 1: If the address on the claim is a skilled nursing facility and an initial nursing facility service 99306 is reported, the POS code should not be POS 22 (on-campus outpatient hospital). It should be POS 31 (skilled nursing facility)
Example 2: If the address on the claim is the hospital address and an office or outpatient visit 99213 is reported for work performed in the on-campus PBD, the POS code should not be POS 11 (office). It should be POS 22 (on-campus outpatient hospital).

    2.         Reporting POS 11 (office) when work was performed outside of the office. This causes an overpayment.

    3.         Failing to ask PBDs, where physicians/QHPs work, if the PBD is officially an on-campus (POS 22) or off-campus (POS 19) department

    4.         During the COVID-19 PHE (from March 1, 2020, and for the duration of the PHE), reporting the POS 02 (telehealth) instead of the POS code where the physician/QHP normally furnishes the in-person encounter. If POS 02 is reported during the PHE, the physician/QHP will receive the telehealth payment, which is typically less than the payment for the in-person encounters.

    5.         Reporting POS 31 (skilled nursing facility) for encounters with patients who are no longer in a Medicare Part A covered stay, which results in a reduced payment. If the patients are in a Medicare Part B covered stay, POS 32 (nursing facility) should be reported.

    6.         Submitting claims with POS 11 (office) when the patient is registered in a skilled nursing facility but is seen by the physician/QHP in the office. When patients are registered as inpatients in a hospital or a skilled nursing facility, the POS code of the hospital or skilled nursing facility should always be reported, even if the patient encounter occurred in a physician/QHP office.

    7.         The POS code is not compatible with the service/procedure code billed. For example:
                ·      Office and outpatient visit codes (99201–99215) should align with POS codes, eg, 11 (office), 22 (on-campus hospital), or 24 (ambulatory surgical center (ASC)
                ·      Hospital visit codes (99221–99233 and 99238–99239) should align with POS code 21 (inpatient hospital)

Wound/ulcer management stakeholders often ask which POS codes are paid at the higher office/non-facility rates and which POS codes are paid at the lower facility rates. See Table 1.

Summary

All wound/ulcer management physicians/QHPs should take the time to 1) document the place where patient encounters occur, 2) report the correct POS code on their charge sheets, and 3) audit their submitted claims for correct POS codes. This should help reduce denials and repayments. Not only are payers conducting POS code audits, but the Office of Inspector General (OIG) Work Plan has included conducting audits to identify claims that are improperly reported as POS 11 (office) when the service/procedure was actually performed in an inpatient hospital (POS 21) or a skilled nursing facility (POS 31).
 
Therefore, the moral of this story is to always submit claims with accurate POS codes; it is quite simple to do the right thing!
 
Kathleen D. Schaum is a founding member of the Today’s Wound Clinic editorial advisory board and oversees a consulting business. She can be reached for consultation and questions by emailing kathleendschaum@bellsouth.net.

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