Practice Management Alert

Fewer than 25 percent of practices nail the correct POS for facility-rendered services

Billers who think place-of-service (POS) codes don't deserve a second look are in for a rude awakening - and potential fraud or abuse charges.
 
When the HHS Office of Inspector General (OIG) recently reviewed Trailblazer and Empire Medicare, the agency revealed that 75 to 88 percent of sampled practices were reporting office setting POS codes for facility-rendered physician services. Because nonfacility fees are higher to compensate for staff and practice overhead, Medicare may have overpaid Empire alone more than $1.4 million between 2000 and 2002.
 
You need to take action: To help you steer clear of disaster, our experts answer three of your most pressing POS questions to help you choose the right code to fill Box 24B on the CMS 1500 form.

1. Question: What criteria should I use to differentiate between POS 31 (Skilled nursing facility), 32 (Nursing facility) and 33 (Custodial care facility) when dealing with nursing facilities?

Answer: The confusion surrounding these three codes arises because a facility can have both skilled nursing and nonskilled nursing beds at the same time.
 
31: You should use skilled nursing facility code 31 when your physician treats a patient who is in a skilled bed at the time of service. This means the patient has a medical condition that requires skilled nursing care, such as injections or ventilation. Medicare must authorize skilled nursing services and considers them a Medicare Part A expense.
 
A patient is allowed only a certain number of SNF days per year, says Kathleen Jillson, director of practice administration at Erickson Retirement Communities in Catonsville, Md. If a nursing facility brings a patient to the physician's office, you should report POS code 11 (Office) on the claim form.
 
32: You should choose nursing facility POS code 32 if the patient is not on Part A Medicare, but instead is on long-term care and receiving medical, nursing or rehabilitative services.
 
Because determining what type of bed the patient has can be difficult, you need to maintain close communication with the administrative or billing office in the nursing facility to determine whether the patient is in a skilled bed when a physician sees a patient there, says Barbara J. Cobuzzi, CPC, CPC-H, CHBME, president of Cash Flow Solutions Inc. in Brick, N.J.
 
33: You would report POS code 33 for a custodial care facility. These facilities provide patients with personal assistance services on a long-term basis, but do not provide medical care (although they do provide assistance, such as dispensing medications). Patients are mobile in a custodial care facility, so there must be medical necessity for a physician to see a patient at the facility and not in his office.
 
Example: If a patient in the custodial facility fractures a hip and is unable to go to the physician's office, the physician would be able to see the patient at the custodial care facility.

2. Question: Physicians in our office are certified to interpret EKG and sleep study results for other physicians' patients. Our physicians do not see the patients; they only interpret the test results. What POS is appropriate?

Answer: The answer will depend on where the physician performed the interpretation service, says Terri Fischer, CPC, CMC, manager of Health Care Group at Larson Allen Weishair LLP in St. Louis. If the physician interprets the results in the hospital, you should code the service with POS 22 (Outpatient Hospital). If the physician interprets the test in your office, report POS 11 (Office).
 
Idea: If the physician does not interpret test results in one place, you might help your staff to avoid POS billing errors by creating a form that allows the physician to circle where he rendered the interpretive service.

3. Question: Which POS should I report if the physician's office is on hospital property?

Answer: The question you need to ask: "Is the physician paying fair market rent for the [office space]?" Fischer says. If the physician is paying appropriate rent to the hospital, you should consider the space an office and you should select POS 11.
 
If the physician does not pay fair market value for the space, you should use POS 22. When the physician does not pay for using the facility, he should not receive any extra reimbursement for it, Fischer says. If renting, the physician would receive the higher nonfacility fee (called for by POS 11) that includes the practice's operational costs.

The same rule applies to a laboratory or rehabilitation facility located on hospital property. If the providers do not rent the space and it belongs to the hospital, then providers perform services on someone else's property - and you should select POS 22, Fischer says. If the laboratory or rehab facility pays rent to the hospital, report POS 81 (Independent laboratory) or POS 62 (Comprehensive outpatient rehabilitation facility).