Introduction
Place of Service (POS) code 21 is used in medical billing to indicate that a service was provided to a patient who has been formally admitted to an inpatient hospital. This code appears on the CMS-1500 form when a provider renders professional services to a hospitalized patient.
CMS Definition: “A facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under the supervision of, physicians to patients admitted for a variety of medical conditions.”
When Should You Use POS 21?
Use POS 21 when:
- The patient has been formally admitted to a hospital as an inpatient.
- The provider is rendering evaluation, management, or treatment while the patient is admitted.
- The service is not part of the hospital outpatient department (which would be POS 22).
- The date of service aligns with the hospital admission and discharge dates.
Examples of POS 21 Scenarios
| Scenario | POS Code |
|---|---|
| Cardiologist performs a consultation for a patient admitted for chest pain | POS 21 |
| Hospitalist rounds on a patient with pneumonia admitted to the medical floor | POS 21 |
| Surgeon performs a postoperative follow-up while the patient is still admitted | POS 21 |
Billing and Reimbursement Implications
- POS 21 represents a facility setting, meaning professional claims are paid at the facility rate (lower than non-facility rates like POS 11).
- The hospital bills the facility fee on the UB-04 claim form, while the physician bills the professional fee on the CMS-1500 form using POS 21.
- Reimbursement is based on facility RVUs, as the hospital covers overhead (staff, equipment, space).
- Example:
- CPT Code: 99223 (Initial inpatient hospital care)
- POS 21: Reimbursed at facility rate, with no additional payment for office overhead
Documentation Tips
- Ensure that admission orders and inpatient progress notes are clearly documented in the medical record.
- Dates of service must align with the patient’s inpatient status—don’t use POS 21 if the patient is in observation or ER only.
- If the patient was not officially admitted, use POS 22 (Outpatient Hospital) or POS 23 (Emergency Room).
Common Mistakes to Avoid
- Using POS 21 for outpatient or ER visits – always verify the patient’s admission status.
- Mismatch between hospital records and billed services – can trigger audits.
- Incorrect POS leads to underpayment or denials – especially with Medicare.
Quick Comparison: POS 21 vs POS 22
| Feature | POS 21 (Inpatient Hospital) | POS 22 (Outpatient Hospital) |
|---|---|---|
| Admission | Formally admitted | Not admitted |
| Billing Rate | Facility rate | Facility rate |
| Typical Use | Inpatient care, daily rounding | ER, outpatient surgery, short stays |
| Claim Form | CMS-1500 (professional); UB-04 (facility) | CMS-1500 (professional); UB-04 (facility) |
Final Thoughts
Understanding Place of Service 21 is essential for accurate billing, appropriate reimbursement, and compliance. Always confirm the patient’s admission status and ensure the documentation supports the inpatient designation. Errors in POS coding can result in delays, denials, and revenue loss—so attention to detail is key.