What Is a Place of Service (POS) Code in Medical Billing?

Place of Service (POS) codes are two-digit identifiers that pinpoint the exact location where a medical service was rendered. These codes are integrated into medical claims to provide clear context for the care provided. Accurate application is important for processing healthcare claims.

Understanding Place of Service Codes

Place of Service (POS) codes are standardized two-digit numeric codes maintained by the Centers for Medicare & Medicaid Services (CMS). They describe the setting where healthcare services are delivered and are applied to medical claims to identify the specific type of facility or environment where care occurred. POS codes provide essential context for medical services, differentiating between various care environments, such as inpatient versus outpatient settings or an office versus a hospital.

The primary purpose of POS codes is to provide a standardized method for reporting the service location, which is then used by insurance companies to properly evaluate claims. Identifying the service location is fundamental for payers, as different settings often have varying rules and payment rates associated with the services provided. The codes ensure that all parties involved in the billing process have a consistent understanding of where the patient received care.

Common Place of Service Codes and Their Meanings

Healthcare services are provided in diverse environments, each designated by a specific Place of Service code to ensure clarity in billing.

POS 11 denotes an “Office” setting, which includes a physician’s office, clinic, or group practice where health professionals routinely provide examinations, diagnoses, and treatments on an ambulatory basis. This code applies when the provider controls the practice setting, even if it is located within a hospital.
POS 12 represents “Home,” which is used for services delivered to a patient in their private residence, distinct from a hospital or other facility.
POS 20 signifies an “Urgent Care Facility,” a location distinct from a hospital emergency room that provides diagnosis and treatment for unscheduled, ambulatory patients.
POS 21 is used for “Inpatient Hospital” services, indicating care provided in a facility primarily offering diagnostic, therapeutic, and rehabilitation services under physician supervision.
POS 22 identifies “On-Campus Outpatient Hospital” services rendered in a hospital’s outpatient department on its main campus for patients who do not require hospitalization.
POS 19 designates an “Off Campus-Outpatient Hospital,” reflecting services provided in an off-campus department that is not part of the hospital’s main campus.
POS 23 refers to an “Emergency Room – Hospital,” applicable when diagnosis and treatment of illness or injury occur in a hospital’s emergency department.
POS 24 codes “Ambulatory Surgical Center” for surgical procedures performed in a freestanding facility, not a physician’s office.
POS 31 indicates a “Skilled Nursing Facility,” where services are provided to patients requiring skilled nursing care and related services.

With the rise of remote care, specific codes have also been established for telehealth services.

POS 02 is used for “Telehealth Provided Other than in Patient’s Home,” where services are received through telecommunication technology when the patient is not at home.
POS 10 specifies “Telehealth Provided in Patient’s Home,” for services delivered via telecommunication technology while the patient is in their private residence.

How Place of Service Codes Affect Claims

Accurate application of Place of Service codes is integral to the medical billing and claims submission process. These two-digit codes are a required element on the CMS-1500 claim form. Identifying the location where services were rendered directly influences how insurance companies, including Medicare, Medicaid, and private payers, process and reimburse claims.

The POS code helps payers determine appropriate reimbursement rates because different settings have distinct payment structures. For instance, services provided in a physician’s office (POS 11) may be reimbursed at a non-facility rate, which can differ significantly from the rate for the same service provided in a hospital outpatient department (POS 22). This distinction is important for accurate financial transactions between providers and insurers.

Incorrect POS coding can lead to negative consequences for healthcare providers. Claims submitted with an inaccurate POS code are frequently denied or delayed, disrupting cash flow and increasing administrative burden. Errors can also trigger audits by payers or regulatory bodies, potentially resulting in recoupment demands for overpayments or legal implications. Persistent coding errors can damage a provider’s reputation and lead to patient dissatisfaction.