OIG to focus on place of service coding by physicians

As part of its Fiscal Year 2015 work plan (which began Oct. 1), the Health and Human Services Office of Inspector General (OIG) says it will examine place of service coding errors by physicians. Specifically, the OIG will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers (ASCs) and hospital outpatient departments to determine whether they properly coded the places of service. Here’s what you need to know to avoid such errors in your practice:

Prior OIG reviews determined that physicians did not always correctly code places of service on Part B claims submitted to and paid by Medicare contractors. Federal regulations provide for different levels of payments to physicians depending on where services are performed. In particular, Medicare pays a physician more 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.

The correct place of service code for a service provided in a physician’s office is “11.” The Centers for Medicare & Medicaid Services (CMS) defines an office as a “location, other than a hospital, skilled nursing facility, military treatment facility, community health center, state or local public health clinic, or intermediate care facility, where the health professional routinely provides health examinations, diagnosis, and treatment of illness or injury on an ambulatory basis.”

The correct place of service code for a hospital outpatient department is “22.” CMS defines this place of service as “a portion of a hospital (that) provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.”

Finally, the correct place of service code for an ASC is “24.” CMS defines the ASC place of service as “a freestanding facility, other than a physician's office, where surgical and diagnostic services are provided on an ambulatory basis.”

So be careful and accurate because reporting place of service code 11 when either code 22 or 24 is more appropriate will likely result in a Medicare overpayment.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians