Pathology/Lab Coding Alert

Question: What are the place of service codes, and which codes might I see in laboratory billing?

Nevada Subscriber

Answer: According to Centers for Medicare and Medicaid Services (CMS), “Place of Service [POS] codes are two-digit codes placed on health care professional claims to indicate the setting in which a service was provided.”

Although CMS provides nearly 50 POS codes, as a lab or pathology practice, you’ll probably use the following POS codes most frequently (shown with the CMS detailed explanation):

• 11 (Office) Location, other than a hospital, skilled nursing facility (SNF), military treatment facility, community health center, State or local public health clinic, or intermediate care facility (ICF), where the health professional routinely provides health examinations, diagnosis, and treatment of illness or injury on an ambulatory basis.
• 19 (Off Campus-Outpatient Hospital) A portion of an off-campus hospital provider based department which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
• 21 (Inpatient Hospital) A facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under, the supervision of physicians to patients admitted for a variety of medical conditions.
• 22 (On Campus-Outpatient Hospital) A portion of a hospital’s main campus which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
• 31 (Skilled Nursing Facility) A facility which primarily provides inpatient skilled nursing care and related services to patients who require medical, nursing, or rehabilitative services but does not provide the level of care or treatment available in a hospital.
• 81 (Independent Laboratory) A laboratory certified to perform diagnostic and/or clinical tests independent of an institution or a physician’s office.

How to choose: The key to assigning the correct POS code on your Medicare claim (line 24B of CMS Form 1500) is to base your selection on the patient’s location when the clinician obtained the specimen.

Key: That means an independent lab that performs a test using a specimen obtained in a physician office will use POS 11, not 81.

Payment impact: The POS shouldn’t impact codes paid on the Clinical Laboratory Fee Schedule (CLFS), but for some codes paid on the Medicare Physician Fee Schedule (MPFS), the “facility” payment rate may be lower than the “non-facility” payment rate. POS codes 19, 21, 22, and 31 pay the facility rate, while 81 and 11 pay the non-facility rate.