Overview
Place of Service (POS) codes are two-digit numeric codes that identify the setting where a healthcare service was rendered. CMS maintains the code set with annual or periodic updates. Each code corresponds to a specific setting: 11 for office, 12 for home, 19 for off-campus outpatient hospital, 21 for inpatient hospital, 22 for on-campus outpatient hospital, 23 for emergency room — hospital, 31 for skilled nursing facility, 02 for telehealth (provided other than in patient's home), 10 for telehealth — patient's home, and so on.
POS codes directly affect physician payment through the facility-vs-nonfacility RVU distinction. The Medicare Physician Fee Schedule publishes two Practice Expense RVU values for most services: Nonfacility PE RVU (higher, reflecting the practice absorbing all overhead) and Facility PE RVU (lower, because the facility bills separately for overhead services like rooms, supplies, equipment, and nursing). When the POS is facility (e.g., 21 inpatient hospital, 22 outpatient hospital), the physician's Facility PE RVU applies and payment is lower. When POS is nonfacility (e.g., 11 office), the Nonfacility PE RVU applies and payment is higher.
The POS rule is operationally significant in several scenarios. Hospital-owned physician practices designated as Provider-Based Departments must bill using Facility POS and the nonfacility-to-facility differential reduces per-encounter physician revenue — but the hospital bills a separate facility fee that more than offsets the differential. Telehealth coding shifted during the Public Health Emergency: POS 02 (telehealth) was broadly used, and CMS added POS 10 for telehealth-to-home. Telehealth POS and associated modifiers (95, GT, GQ) are audited closely because incorrect coding affects parity payment.
For RCM, POS accuracy is a significant denial and under/over-payment driver. Common errors: billing office POS 11 for services actually rendered in an off-campus outpatient hospital (should be POS 19 or 22); missing POS 02 telehealth designation; billing inpatient POS 21 for observation-level services that should be outpatient. Each mismatched POS can produce denials, incorrect payment, or audit flags.
CMS periodically updates the POS code set. Recent substantive changes: addition of POS 10 for telehealth-to-home (effective 2022), revisions to telehealth POS guidance (post-PHE), and clarifications for provider-based departments under site-neutrality rules. Practice management systems, encoder software, and payer edit engines must be updated as changes take effect.
The No Surprises Act interacts with POS. Emergency services (POS 23) have special NSA protections; services at in-network facilities (POS 19, 22) delivered by out-of-network ancillary providers (anesthesia, radiology, pathology) have protections. Proper POS coding is therefore relevant to NSA compliance and balance-billing dispute resolution.
Industry benchmark
CMS Place of Service Code Set (maintained and published at cms.gov). MLN Matters publications announce POS code updates.
Worked example
A 99214 E/M established-patient office visit. POS 11 (office, nonfacility). FY2025 nonfacility RVUs: wRVU 1.92, peRVU 1.00, mpRVU 0.14 = 3.06. At CF $32.35, payment $98.99. Same service in POS 22 (on-campus outpatient hospital) would use facility RVUs: wRVU 1.92, peRVU 0.55 (facility), mpRVU 0.14 = 2.61. At CF $32.35, payment $84.43. Difference: $14.56 or 14.7%.
Frequently asked questions — Place of Service (POS) Code
Why does POS affect payment?
CMS pays the physician a higher Practice Expense RVU when the practice absorbs all overhead (nonfacility POS) and a lower Practice Expense RVU when a separate facility fee pays for overhead (facility POS). The logic: avoid paying twice for the same overhead. Commercial payers generally follow the same logic.
What POS do I use for telehealth?
POS 02 for telehealth provided to a patient NOT at home; POS 10 for telehealth provided to a patient at home (added 2022). Additional modifiers — 95 (synchronous telemedicine), GT (via interactive audio/video), GQ (asynchronous) — may be required by specific payers. CMS telehealth policy continues to evolve post-PHE.
What POS applies to hospital-owned off-campus clinics?
POS 19 for off-campus outpatient hospital (provider-based department). Under site-neutrality rules, new PBDs pay at approximately the PFS-equivalent rate rather than OPPS. POS 19 designates the claim correctly for site-neutrality calculation.
How often does the POS code set change?
Annually or more often as needed. CMS publishes updates via MLN Matters articles. Major recent updates: POS 10 telehealth-to-home (2022), POS 99 retirement and replacement guidance, and updates to reflect emerging service settings. Keep POS reference tables current.
Disclaimer
This glossary entry is operational reference for revenue-cycle and medical-billing professionals. It is not legal, clinical, or contractual advice. Industry benchmarks cite named public sources where available; always verify against the current guidance from the authority body before relying on a number in a contract, policy, or compliance filing.