In U.S. medical billing, accuracy depends on more than just procedure and diagnosis codes. The Place of Service (POS) codes, maintained by the Centers for Medicare & Medicaid Services (CMS), are two-digit numbers that tell payers where a service was performed. Using the correct POS code ensures providers are paid the right rate and prevents claim denials.
Two of the most commonly used POS codes are POS 11 (Office) and POS 22 (On-Campus Outpatient Hospital). Though they seem similar, they affect reimbursement differently.
Understanding POS Codes
- Issued by CMS: Required on all professional claims (CMS-1500 form).
- Two-digit format: Identifies where the patient received care.
- Directly impacts payment: Some settings receive a higher or lower reimbursement rate due to overhead costs.
CMS divides settings into Facility vs. Non-Facility:
- Non-Facility: Lower overhead (e.g., private practices).
- Facility: Higher costs (e.g., hospitals).
What is POS 11 (Office)?
- Definition: CMS defines POS 11 as services provided in a physician’s office, private practice, or clinic that is not part of a hospital.
- Category: Non-Facility.
- Billing Impact: Reimbursed at a higher rate than hospital-based outpatient services because the provider incurs practice overhead.
Example:
A dermatologist treats a patient in their private office. That visit is billed with POS 11.
Why it matters: If you mistakenly bill POS 22 instead of POS 11, reimbursement will be reduced, and the claim may be flagged for incorrect site-of-service.
What is POS 22 (On-Campus Outpatient Hospital)?
- Definition: CMS defines POS 22 as services provided in the outpatient department of a hospital located on the hospital campus.
- Category: Facility.
- Billing Impact: Payment is usually lower for the physician compared to POS 11, because part of the reimbursement goes to the hospital for facility fees.
Example:
A cardiologist sees a patient in the outpatient clinic that is part of a hospital’s campus. That visit is billed with POS 22.
Important Update: In 2016, CMS clarified that POS 22 applies only to outpatient hospital departments on-campus. For off-campus hospital outpatient departments, POS 19 should be used instead.
Key Differences Between POS 11 and POS 22
| Feature | POS 11 – Office | POS 22 – Outpatient Hospital |
|---|---|---|
| Setting | Private office, standalone practice, non-hospital clinic | Outpatient hospital department (on-campus) |
| Category | Non-Facility | Facility |
| Reimbursement | Higher physician payment | Lower physician payment (facility fee applies) |
| Overhead Costs | Paid directly to physician | Shared with hospital |
| Common Users | Family medicine, dermatology, psychiatry, specialty clinics | Hospital-based outpatient clinics, specialty hospital practices |
Why Correct POS Code Selection Matters
- Compliance: Incorrect codes can trigger audits and repayment requests.
- Reimbursement: Misuse of POS 22 instead of POS 11 results in lower payment.
- Fraud Prevention: Repeated misuse may be flagged as upcoding or fraud.
- Patient Transparency: Facility-based billing can lead to surprise hospital fees for patients.
FAQs
1. Can POS 11 and POS 22 be used for the same doctor?
Yes. A provider may practice both in their private office (POS 11) and a hospital outpatient clinic (POS 22). Claims must reflect the correct site.
2. What’s the difference between POS 22 and POS 19?
- POS 22 = On-campus outpatient hospital.
- POS 19 = Off-campus outpatient hospital.
3. What happens if I use the wrong POS code?
Claims may pay at the wrong rate or be denied. In some cases, overpayments must be refunded.
Conclusion
POS 11 and POS 22 play a critical role in U.S. medical billing.
- POS 11 applies to physician offices and private practices, where reimbursement is higher because providers cover their own overhead.
- POS 22 applies to hospital-based outpatient settings, where reimbursement is split with the facility.
Using the correct POS code is essential for compliance, accurate payment, and avoiding audit risks. Every billing team should stay updated with CMS guidelines to prevent costly mistakes.