Place of Service Coding for Physician Medicare Part B Services

On July 28, 2010, the Office of Inspector General issued audit results for place of service coding for physician services processed by Medicare Part B carriers during calendar year 2007. Based upon the sample results, the OIG estimates that Medicare contractors overpaid physicians $13.8 million for incorrectly coded services during calendar year 2007. Medicare pays physicians a higher rate for services performed in non-facility locations, such as physicians' offices, to account for the increased overhead expenses incurred by physicians. A lower rate is paid for services performed by physicians in facility settings, such as hospital outpatient departments or ambulatory surgical centers. In 90 of the 100 services in the sample, the billing physicians used non-facility place of service codes on their claim forms when such services were actually performed in hospital outpatient departments or ambulatory surgical centers.

Based upon these audit results, it is expected that enhanced focus will be placed on appropriate place of service coding by physicians. Physicians need to ensure that the correct place of service codes are used on their claim forms. Further, facility providers, like hospitals or ambulatory surgery centers, should work with their medical staff so that they understand the place of service coding requirements when physician services are performed in facility settings outside of the physician's office practice.

To review a copy of the audit results, see: