Nowadays, there’s a lot of emphasis on Place of Service (POS) codes in medical billing. POS codes are crucial for billing and submission of claims on a CMS-1500 or equivalent. CMS and private providers require these codes to mention the sale of treatment-related items or patient services. Recording the correct POS code is essential for minimizing denial rates and maximizing reimbursement.

Introduction to Place of Service (POS) Codes

Simply put, when physicians, doctors, and healthcare service providers treat patients, they do it in facilities like hospitals, practices, medical offices, and clinics. As compared to large government or corporate organizations, these are small community-based facilities. So in medical billing, these places are highlighted using specific codes, also called Place of Service or POS codes.

Place of Service or POS Codes are two-digit codes that indicate to the insurance company the setting or locations where healthcare services were provided. This allows insurance companies, either government or private, to decide the right reimbursement amount against the services rendered.

There are two categories of POS Codes. These are referred to as:

  1. Facility POS Codes
  2. Non-Facility POS Codes

Let’s talk about these categories briefly to give you an idea of their significance in claim submission process and to get appropriate reimbursement.

Facility POS Codes

Facility POS Codes refer to specific codes that highlight patient treatments in settings like hospitals, nursing homes, and skilled nursing centers. These codes are crucial and required to track patient care, ensure accurate records, and correct payment against submitted claims. These codes include:

  • Inpatient Hospital (21)
  • Outpatient Hospital (22)
  • Emergency Room-Hospital (23)
  • Urgent Care Facility (20)
  • Skilled Nursing Facility (31)
  • Hospice Facility (32)
  • Ambulatory Surgical Center (24)

Non-Facility POS Codes

These codes categorize the treatments provided in facilities and centers other than hospitals. So, if you’re visiting your family doctor for a routine checkup, seek a specialist’s expertise for a treatment procedure, or want to receive physical therapy from a nearby clinic, the services fall under the umbrella of non-facility POS Codes. These codes include:

  • Office (11)
  • Home (12)
  • School (03)
  • Independent Clinic (49)

What is POS 11 in medical billing?

There are two main types of POS codes; POS 11 and POS 22. POS 11 points towards a doctor’s office, clinic or practice. When you visit a doctor’s office or clinic, they will include PSO 11 in the medical bill to show the exact location of care provided.

According to CMS, ‘Place of Service (POS) 11 refers to 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.’

Here’s a scenario explaining the inclusion of the right place of service code for professional claims.

When it comes to ‘On Campus – Out patient’, if the hospital has its own space or they’ve employed all the healthcare provider staff, then the claim will include POS 22. In case of POS 22, the reimbursement will be less for the care provider. Since the hospital fully assumes the operational responsibility, the hospital will submit the claim for the use of its facility or space.

However, in case a doctor’s office is independently operated and situated within the hospital premises, the provider will highlight POS 11 within the claim. Below mentioned are two significant factors that need to be considered.

  1. In case the doctor or healthcare provider pays for the rent and employees working in the facility from their own revenue.
  2. If so, the doctor’s organization should have a separate Tax ID from the hospital for making professional claims.

Advantages of POS 11 in Medical Billing

  • The main advantage of POS Code 11 is its ease of use.
  • The interface is user-friendly and lessens the time taken on administrative tasks, allowing healthcare providers to spend more time and effort on providing passionate care to patients.
  • Its streamlined billing processes boost operational efficiency.
  • The correct usage of POS Code 11 helps to lower errors and enhances financial stability.
  • Integrating systems with insurance verification reduces claim denials by ensuring accurate billing information is available before submission. 
  • This approach promotes faster reimbursements and minimizes disputes.
  • POS 11 brings in the scalability factor and eases the integration process with the passage of time and practice scalability.

What is POS 22 in Medical Billing?

POS 22 points towards the delivery of on-campus services in an outpatient setting, hospital, clinic, or practice. Due to its special features and options for recording the services provided, a large majority of doctors, clinics, and practices use POS 22 before submitting the medical bill.

According to CMS, ‘On campus here means 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.’

In case a physician doesn’t recommend formal hospitalization for the patient, or if the patient treatment can be performed outside the hospital’s premises, then the patient will be referred to as an outpatient. Also, if the facility is situated within 250 yards of the hospital, it would be designated as ‘hospital outpatient unit.’

Off campus means a part of a hospital’s provider-based department located away to provide therapeutic, diagnostic and rehabilitation services to patients who aren’t advised hospitalization. Inpatient means a facility, other than psychiatric, that deals with therapeutic, diagnostic and rehabilitation services by or under supervision of a doctor to those admitted for multiple conditions.

Advantages of POS 22 in Medical Billing

  • POS Code 22 comes with customization options, enabling healthcare providers and practitioners to meet their billing schedules and requirements.
  • It facilitates a smooth and efficient billing process.
  • Improves patient engagement and boosts operational efficiency. 
  • Collaborating with multiple communication channels and third-party applications makes things easy.
  • Scheduling and performance management software helps teams work more efficiently and enhances their productivity.
  • It keeps the labor costs in check and allows for smooth shift transitions.
  • POS 22, just like POS 11, also supports scalability due to its multi-location functionality.
  • It is ideal for large businesses operating in multiple areas.

POS 11 VS POS 22 in Medical Billing

Here are some of the notable difference between two place of service codes in a tabular form to make it easy for you to grasp.

Features POS Code 11 POS Code 22
User-Friendly Interface Comes with an easy-to-use interface. No complications mean it is easy to handle with enhanced operational efficiency even in busy centers. Can be customized according to the requirements of billing and workflow. It is more innovative but may take more time to set up.
Patient Account Management It comes with a friendly tool for handling patient accounts, payments, insurance, and remaining amounts. Modern management features include real-time eligibility verification and auto-claim submission.
Integrated Payment Processing Comes with a safe and systematic payment method to eliminate errors and improve patient care and experience. Comes with multiple communication channels integrated for continuous patient interaction.
Insurance Verification and Claims Processing Offers real-time payor verification and efficient claim processing to lower denials. Offers modern patient and payor handling using billing details and real-time verification.
Reporting and Analytics Fully loaded with useful tools like daily financial synopsis, claims status reports, patient account analytics, and much more. Modern reporting tools, actionable dashboards, and KPIs for data-driven decision-making.
Cloud-Based Access Easy remote management for convenient access to patient details and billing info from any location. Manage multiple locations using unified reporting and smooth operations across various locations.
Multi-Location Support   Supports organizations with multiple locations by guaranteeing operational consistency and financial information.
Third-Party App Integration   App integration with accounting software, EHR systems, and tools for practice management for a
Employee Management   Handy tools include scheduling, time tracking, and performance management to streamline organizational efficiency and staff costs.

Why Is Highlighting the Place Of Service Important?

Mentioning the right place of service before submitting the claim is important, as it can be denied if the wrong POS code is used. Authorization and referral requirements vary depending on the location where a patient receives services. The Place of Service Code can also affect how the claim is processed and the physician’s income.

Highlighting the wrong POS can result in outright denial of the claim with a “no authorization” remark. For instance, a patient was provided treatment in the Emergency Room. However, the physician mentioned the POS Code 22 which is for an outpatient hospital. The claim will be denied automatically.

Conclusion

In medical billing, getting the Place of Service (POS) code right is key to accurate claims and full reimbursement. Each POS code—whether for outpatient care or a facility—lets insurers know exactly where the care was provided, which directly impacts how claims are processed and approved. By listing the correct POS code, healthcare providers can lower denials and avoid delays, leading to smoother billing and quicker payments.