Beware of the Long Reach of the Prosecutor
REIMBURSEMENT DEPENDS UPON THE CORRECT PLACE-OF-SERVICE
CODES
The importance of
correct place-of-service codes on a claim form is an
often overlooked part of many billing and compliance
programs. Place-of-service (POS) coding errors are
significant enough to have been identified by the
Office of the Inspector General (OIG) in several of
its reports. In January 2005, an audit by the OIG
determined that some medical practices were
reporting claims with an incorrect
POS. The audit revealed that services were being
reported with a POS of “office,” when in fact, the
services were actually rendered in an outpatient
department or ambulatory facility. This resulted in
claims being overpaid. Specifically, 88 of the 100
claims that were sampled showed that while the
services were performed in a facility setting, the
services were billed incorrectly with the place of
service as “office.”
The correct
place-of-service code is important because it
ensures that Medicare is not duplicating payment to
the physician (Part B) and the facility (Part A) for
any portion of the
practice or overhead expense incurred to perform the
service. The audit results were concerning enough
that in 2008 the OIG added place-of-service errors
on claims submitted by physicians
as a specific item on their annual work plan.
According to the work
plan, “We will review physician coding of place of
service on claims for services performed in
ambulatory surgical centers (ASC) and hospital
outpatient departments. Federal regulations at 42
CFR § 414.22(b)(5)(i)(B) provide for different
levels of payments to physicians depending on where
the services are performed. Medicare pays a
physician a higher
amount when a service is performed in a non-facility
setting, such as a physician’s office, than it does
when the service is performed in a hospital
outpatient department or, with certain exceptions,
in an ASC. We will determine whether physicians
properly coded the places of service on claims for
services provided in ASCs and hospital outpatient
departments.”
Often, a claim denial is
the first clue that an incorrect placeof-service
code has been billed. A common error can be found
when an emergency room visit is billed as an
inpatient hospital place of service. While the
patient may have been admitted as a result of the
services received in the emergency department,
services that were performed in the emergency
department by Part B providers must be billed with
place-of-service code 23, emergency room, hospital.
While the facility services billed to Part A for
that patient would be bundled into the inpatient
payment, the Part B services are not. A complete
listing of the various places of service codes can
be found in the front of
most editions of the CPT-4 manual.
By Gretchen
Segado, MS, PCS, CPC, CCP-P
Located in the
HBMA Journal
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