Practice Management Alert

New transmittals mean you'll have to focus on where the beneficiary was at time of service.

When you bill for the interpretation and report a provider performs on a radiology service, determining the proper place of service to list on the claim can be sometimes be tricky. The good news is that new CMS guidance will set you straight.

The latest rule states that the POS code you put on the claim needs to reflect the "setting in which the beneficiary received the face-to-face service," according to MLN Matters MM7631. CMS has created exceptions to the rule, however, so be sure to read the rule in full and pay attention to each element. Here's what you need to know to ensure your claims won't start coming back stamped "Denied."

You Have Until October to Learn the Rules

Changes already: The original Transmittal (2407) said that the new rule would go into effect on April 1, 2012. CMS announced that the new effective and implementation dates have been set as Oct. 1, 2012. To review the rules and the announcement, you'll need to check Transmittal 2435, which replaced 2407.

The new Transmittal states: "Transmittal 2407, dated February 3, 2012, is being rescinded and replaced by Transmittal 2435 to change the effective date from April 1, 2012, to October 1, 2012, and to change the implementation date from April 2, 2012, to October 1, 2012. This delay will allow CMS to address questions received and to make any necessary changes. All other information remains the same."

Despite the implementation delay, you should review your POS billing policies in light of the transmittal instructions to ensure that you're ready when CMS announces the final effective date.

The Professional Component POS May Surprise You

According to Transmittal 2407, and now Transmittal 2435, the general rule will be that you should choose the POS code based on where the patient had the face-to-face service. So under the new rule, if you're reporting a test performed on an outpatient at the hospital, but your physician provides a full interpretation and report of the test at his office, you would choose the POS code for outpatient hospital (POS 22).

Under CMS's announced rule, "providers performing the PC [professional component] of interpretation of tests must use the POS where the face-to-face service -- test -- was performed, i.e. outpatient facility, ASC [ambulatory surgical center], etc.," says Catherine Brink, BS, CMM, CPC, CMSCS, president of NJ-based Healthcare Resource Management.

In case you have any question about whether the rule applies to diagnostic imaging, the MLN Matters articles clearly state that if the patient has an imaging exam at one site and the physician interprets the exam at his office, the POS should reflect where the patient had the exam. You should not base your POS code on where the physician provided the interpretation.

For example: The article provides a sample scenario in which a patient has an MRI at an outpatient hospital. The physician interprets the exam at his office.

For the physician claim, you must decide whether to report office POS 11 for where the physician provided the service or POS 22 for the outpatient hospital where the patient had the exam. Under the new rule, you should report POS 22 because that's where the patient had the outpatient exam.

Caution: Although you designate the outpatient hospital as the place of service, you should report the office's ZIP code in Item 32 of the CMS 1500 (or electronic equivalent), the Transmittal states. Using the appropriate ZIP is important both for compliance with CMS instructions and for ensuring payment based on the physician's location.

Bonus tip: Experts recommend using the date of service of the diagnostic procedure as the date of service on the physician's professional component claim (rather than using the date the physician read the study). As always, if your payer provides a written policy, you should follow that guidance for that payer.

An Inpatient Is Always an Inpatient for POS

The MLN Matters article indicates two exceptions to the rule that the face-to-face service location decides the POS.

Inpatient: If the patient is an inpatient of a hospital, then the POS will be the inpatient hospital POS 21 regardless of where the face-to-face visit occurs.

Outpatient: If the physician provides services to a hospital outpatient, "including in a provider-based department of that hospital," then the POS should be outpatient hospital POS 22, the MLN article states.

This rule does not change the fact that an office is an office, however. If the physician has separately maintained office space on the hospital campus (space that meets the regulatory requirements to be considered an "office"), and the patient presents for an appointment at that office, services performed in that space will still be POS 11.

Best bet: Get your legal team's opinion on proper application of the POS rules. And remember that CMS allows local contractors to provide guidance about which code applies in cases where the appropriate POS code may be unclear.

Pay Particular Attention to ASCs

Incorrect POS reporting for services performed in ASCs was one of the main motivators behind CMS providing these new and revised instructions. The ASC POS code is 24, and you should apply it when the face-to-face service occurs at an ASC.

To clarify, if the physician has a separately maintained office space at the same physical location as the ASC, and it meets "distinct entity" requirements, then report office POS 11 for services performed in that office. But if the service occurs in the ASC, then you should report POS 24.

Think Twice About 34 for Outpatient Hospice

The POS code reported for a hospice patient varies depending on where the service takes place.

If the patient under the hospice benefit is in an inpatient setting, report POS 34 (Hospice -- for inpatient care). If the patient received the service in an outpatient setting, report the POS based on where the service takes place, such as office (POS 11), outpatient hospital (POS 22), or the patient's home (POS 12).

Remember: POS 12 for home refers to a residence that isn't operated by the hospice or other care-giving entity. For example, if the patient resides at a nursing facility, you should report POS 32 (Nursing facility) or POS 31 (Skilled nursing facility) rather than POS 12 (Home or private residence of patient).

For now: Until the new rule becomes effective, continue to follow your payer's current guidance on choosing the POS code.

Smart move: Ensure your practice's providers and billers understand this new POS change so your practice will report the appropriate POS on the CMS claim form, Brink advises. Additionally, other contractual payers may follow CMS's footsteps and adopt this POS change, so be on the watch, she says.

Resources: You may review Transmittal 2435 and its accompanying MLN Matters article at the following addresses: www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads//R2435CP.pdf and www.cms.hhs.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7631.pdf.