Wrong Place of Service Can Cause Denials

Check and double check your medical billing claims for the notorious wrong place-of-service (POS) code that can spell denials and delays in getting paid for your observation services.

A good general guideline to follow is to use POS 22 (Outpatient hospital) only for observation codes 99217 (Observation care discharge day management …) and 99218-99220 (Initial observation care, per day …). Be sure not to use POS 21 unless the patient has been formally admitted.

You will need to split out the time the patient was in observation before they were admitted and use codes 99211-99215 for any E/M services rendered on the second day and before the patient is discharged. It is important that you only report one unit of 99218-99220 per observation stay because these codes are for initial care.

As with all medical billing, nothing is written in stone and there are some possible exceptions to this rule. If the patient is new to the physician’s care, you will need to use code 99201-99205 (Office or other outpatient visit for the evaluation and management of a new patient…). Or if another physician requested a consult, you’d bill the applicable outpatient consult code (99241-99245, Office consultation for a new or established patient…).

Before you run the risk of a denial or delay in your medical billing claim due to an incorrect POS code for the services rendered, look over your billing and make sure it is absolutely correct – you’ll save yourself a lot of grief just by double checking before you submit.

View all Articles by: Kathryn E, CCS-P - Retired