Place of Service Codes: Which One to Use and Why It Changes Your Reimbursement

The Two-Digit Code That Controls Your Reimbursement

Every claim you submit has a Place of Service (POS) code. It is a two-digit number that tells the payer where the service was performed. Most practices default to POS 11 (Office) and never think about it. But using the wrong POS code either costs you money or gets your claim denied.

Why POS Codes Matter for Reimbursement

Medicare pays different rates depending on where a service is performed. The same CPT code gets a different reimbursement in an office versus a facility.

For example, 99214 pays $135.61 at the office rate (POS 11) but only $84.50 at the facility rate (POS 21, 22). That is a $51 difference per visit, just from the POS code.

This happens because the office rate includes overhead costs (rent, equipment, staff). In a facility setting, the facility bills separately for those costs, so the physician's payment is reduced.

If you perform a service in your office but accidentally use a facility POS code, you lose $51 per visit. Do that across 20 visits a day and you are leaving $1,000/day on the table.

The POS Codes You Actually Use

POS 11: Office

Your standard office visit. Used for the vast majority of primary care claims. This is the default and gets the higher (non-facility) rate.

POS 02: Telehealth (Not in Patient's Home)

When you provide a telehealth visit and the patient is at a clinic, hospital, or other healthcare facility on their end. Some payers use this for all telehealth. Others distinguish between 02 and 10.

POS 10: Telehealth (Patient's Home)

When you provide a telehealth visit and the patient is at home. This became permanent after 2025. Some payers pay telehealth at the same rate as in-office; others reduce it. Check your contracts.

POS 12: Home

When you physically go to the patient's home to provide care. House calls. Uses specific home visit E/M codes (99341-99345 for new patients, 99347-99350 for established).

POS 21: Inpatient Hospital

When you see a patient admitted to the hospital. Uses inpatient E/M codes. Gets the facility (lower) rate since the hospital covers overhead.

POS 22: On-Campus Outpatient Hospital

When you provide services in a hospital outpatient department. Common for hospital-employed physicians. Gets the facility rate.

POS 23: Emergency Room

When you provide services in the ER. Gets the facility rate.

POS 31: Skilled Nursing Facility

When you see patients in a SNF. Uses specific SNF E/M codes.

POS 49: Independent Clinic

A freestanding clinic that is not part of a hospital. Gets the non-facility (higher) rate, same as POS 11.

POS 72: Rural Health Clinic

For services provided at a designated RHC. Has its own reimbursement rules under Medicare.

Telehealth POS: The Common Mistake

The biggest POS mistake right now is telehealth coding. There are three options and each has different implications:

• POS 02 (telehealth, patient not at home): The patient is at a clinic or facility. Historically, this was the only telehealth POS and it paid the facility rate.
• POS 10 (telehealth, patient at home): Added permanently after 2025. Most payers now pay this at the non-facility (office) rate, which is higher.
• Modifier 95 (telehealth): Some payers want you to use POS 11 + modifier 95 instead of POS 02 or 10.

Check your payer contracts. Using POS 02 when you should use POS 10 could cost you the non-facility/facility rate difference on every telehealth visit.

Facility vs Non-Facility Rate Impact

Here is how POS codes map to payment rates:

Non-facility (higher) rate: POS 11 (Office), POS 10 (Telehealth at home), POS 12 (Home), POS 49 (Independent Clinic)

Facility (lower) rate: POS 21 (Inpatient), POS 22 (Outpatient Hospital), POS 23 (ER), POS 24 (ASC), POS 31 (SNF)

The difference is significant. For E/M codes, the facility rate is typically 20-40% lower than the non-facility rate.

Common POS Mistakes

1. Using POS 22 when you should use POS 11. If you are in a clinic that is affiliated with a hospital but physically separate, check whether your location is designated as provider-based or freestanding. This determines your POS code and your rate.
2. Using POS 02 for all telehealth. If the patient is at home, POS 10 may get you a higher rate. Check your payer.
3. Forgetting to change POS when seeing patients in different settings. If you round at the hospital in the morning (POS 21) and see patients in the office in the afternoon (POS 11), make sure each claim has the correct POS.
4. Using POS 11 for services performed at a hospital outpatient location. This can result in overpayment and subsequent recoupment.

Not sure which Place of Service code to use? Ask D3 and get the right code with the rate impact for your specific situation.