CMS Clarifies Instructions on Place of Service Coding

January 4, 2010

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CMS recently issued guidance (Transmittals 1823 and 1873) that provides additional clarification on how physicians should code the place of service when providing interpretations of diagnostic tests. Coding of the place of service is important because Medicare payment amounts vary depending on whether a service is furnished in the physician's office or in a hospital or other facility setting. This guidance takes effect January 4, 2010.

If a physician interprets a diagnostic test (for example, an EEG) in his or her office, the place of service is "office" (code 11) even if the test is for a hospitalized patient. In other words, it is where the physician is physically located when he/she performs the interpretation—not where the patient is. Similarly, if the physician interprets a test in the hospital outpatient department, the claim should be coded as HOPD (Code 22).

For teleradiology services (e.g., interpretation of x-rays, EKGs or EEGs) remotely with no face-to-face encounter with the patient, the interpretation would be read in the place of service.

Sometimes the line between office and hospital sites of service is less than obvious. For example, if the physician has an office in the hospital (or hospital-based clinic) it may not always be clear whether the service takes place in the office or in the hospital. The basic principle is that if the "office" is space rented by the physician or his/her practice from the hospital (and not just space the hospital lets the physician use), the place of service should be "office."

Some physicians perform services for ambulatory surgical centers (ASCs). If a physician performs a service in an ASC, the place of service code is 24 for ASC and not the "office" code unless the physician has an office at the same physical location as the ASC and the service was actually performed in the office suite portion of the facility.

If a physician interprets a test in the physician's home, the physician must assess whether the home location meets the definition of office. The Medicare guidance does not provide a definition of "office" but rather instructs providers to seek guidance from the Medicare contractor. However, if the home location is not reflected in the physician's Medicare enrollment information, then it may not qualify as an "office" for purposes of the place of service, in which case it should be coded as "other" (code 99). At the same time, use of the "other" code could create problems under the Stark law if the physician is relying on the in-office ancillary services exception, which requires, among other things, that the service be performed in medical office space that meets the Stark law's "same building" test.

The Transmittal also reminds providers that the date of service for a test interpretation is the actual calendar date that the interpretation was performed even though this may be different from the date of the technical component of the service. CMS instructions indicate that Medicare contractors have until July 1, 2010, to implement the date of service provision.