Pulmonology Coding Alert

As part of its proposed revisions to the 2003 Physician Fee Schedule, CMS has recommended a number of changes to the place-of-service indicators (e.g., 11 for the office, 22 for outpatient hospital) that could affect pulmonology coding. Now, pulmonology coders are using several place-of-service indicators for which there is no site-of-service (facility versus nonfacility) designation. The CMS proposal would assign a site-of-service designation to these indicators, as well as revise several existing site-of-service designations.

Under the resource-based practice expense methodology, CMS distinguishes practice expense relative value units (RVUs) for nonfacility and facility settings. According to CMS publication 1204-P, "This distinction is needed because of the higher resource costs to the physician in the nonfacility setting when the practitioner typically bears the cost of the resources associated with the service. In addition, the distinction ensures that we do not make a duplicate payment for any of the practice expenses incurred in performing a service for a Medicare beneficiary." When the beneficiary is a facility patient, Medicare reimburses the facility for the clinical staff, supplies and equipment while the practitioner receives a generally lower facility practice expense rate. Therefore, changes to the site of service will directly affect physician reimbursement.

For 2003, CMS has recommended that the following be considered facility settings: