Medicare Learning Network Update: New & Revised Codes for Outpatient Hospitals

August 26, 2015

by John Berry

Have you heard of the Medicare Learning Network (MLN) and their series of articles, MLN Matters®? What exactly is MLN you may be asking yourself? Simply put, they are an education/information sharing arm of CMS, the Centers for Medicare and Medicaid Services.

The MLN Matters® series of articles are intended for physicians, other providers and suppliers who submit claims to Medicare Administrative Contractors (MACs), including Durable Medical Equipment Medicare Administrative Contractors (DME MACs) for services provided to Medicare beneficiaries.

In the article titled, “New and Revised Place of Service Codes (POS) for Outpatient Hospitals,” CMS addresses Point of Service (POS) code changes; specifically code 19, the off campus outpatient code, and code 22, the on campus outpatient code.  These code changes are set to go into effect January 1, 2016.

POS 19

Off Campus-Outpatient Hospital

Descriptor: A portion of an off-campus hospital provider based department which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
POS 22

On Campus-Outpatient Hospital

Descriptor: 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.

CMS has developed these changes for the purpose of differentiating between on and off campus service providers in order to better pay claims.

You will notice the term “bundled” payment in the information below. You will notice it more and more as we move closer to the Value Based Payment Model (VBPM) coming in 2019. These code changes help CMS move closer to bundled payments and VBPM.

Points of interest with POS Codes 19 and 22:

  • Payments for services provided to outpatients who are later admitted as inpatients within 3 days (or, in the case of non-IPPS hospitals, 1 day) are “bundled” when the patient is seen in a wholly owned or wholly operated physician practice. The 3-day payment window applies to diagnostic and non-diagnostic services that are clinically related to the reason for the patient’s inpatient admission, regardless of whether the inpatient and outpatient diagnoses are the same. The 3-day payment rule will also apply to services billed with POS code 19. (1)
  • Claims for covered services rendered in an Off Campus-Outpatient Hospital setting (or in an On Campus-Outpatient Hospital setting, if payable by Medicare) will be paid at the facility rate. The payment policies that currently apply to POS 22 will continue to apply to this POS, and will now also apply to POS 19 unless otherwise stated. (2)
  • Reporting outpatient hospital POS code 19 or 22 is a minimum requirement to trigger the facility payment amount under the PFS when services are provided to a registered outpatient. Therefore, you should use POS code 19 or POS code 22 when you furnish services to a hospital outpatient regardless of where the face-to-face encounter occurs.(1)

References:

(1) https://www.cms.hhs.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3315CP.pdf

(2) https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/index.html

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