Place of service billing changes effective April 1

Q: I understand that how we bill place of service (POS) for the professional component (PC) of diagnostic tests is changing. How?

A: The Centers for Medicare and Medicaid Services (CMS) has revised its POS instructions to clarify the assignment of POS for all services paid under its Medicare Physician Fee Schedule (MPFS) as well as certain services provided by independent laboratories. CMS also has established national instructions for the interpretation of the PC and the technical component (TC) of diagnostic tests. These changes are effective April 1.

CMS transmittal 2613, dated December 14, establishes that all services (with two exceptions noted later) paid for under the MPFS use the code by the physician and other supplier assigned to the same setting in which the beneficiary received the face-to-face service. This change means that the setting in which the patient received the TC of the service is billed the same by the individual providing the PC portion of the diagnostic test.

For instance, if a patient receives a chest x-ray at an outpatient hospital facility and the physician interprets the PC portion in his office, then the POS for the PC is 22 (outpatient hospital), not 11 (office). If a diagnostic test that has a separate TC and PC is provided under an arrangement to a hospital, then the doctor who reads the test can be paid for the PC component. The setting where the beneficiary receives the TC, such as the outpatient hospital setting, determines the POS. See “Facility or nonfacility rate?” for more information.

Payment amounts under the MPFS are based on the relative value resources required to provide the services and may vary based on the geographic practice cost indices. The payment locality is determined by the location where a specific service was rendered. So that the appropriate payment may be determined, the address, including the zip code for each service code, must be included on the claim form. When there is a global service code, that is, when the physician provides both the TC and PC, the zip code that applies to the testing facility determines the locality.

Two exceptions to the face-to-face rule:

• The physician always uses the code where the beneficiary is receiving care as a registered inpatient or an outpatient of a hospital, regardless of where the beneficiary encounters the face-to-face service. You must be aware of the exact setting to report the appropriate POS code.

• Nonfacility rates apply to outpatient rehabilitative therapy procedures, including those relating to physical therapy, occupational therapy, and speech language pathology, regardless of whether they are furnished in facility or nonfacility settings. Nonfacility rates also apply to all comprehensive outpatient rehabilitative facility services (POS 62).

Medicare contractors must edit the consistency and compatibility between the POS and site-specific procedure codes and also edit for validity of the POS coding.

The author is president of Medical Coding & Reimbursement in Cincinnati, Ohio. Do you have a primary care-related coding question you would like to have our experts answer in this column? Send it to medec@advanstar.com. Also engage at www.twitter.com/MedEconomics and www.facebook.com/MedicalEconomics.