CMS definition of POS 21
A facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under, the supervision of physicians to patients admitted for a variety of medical conditions.
POS 21 is one of the long-standing codes that CMS lists without a date, meaning it was in effect on or before January 1, 2003 (Medicare Claims Processing Manual, Pub. 100-04, chapter 26, section 10.5).
Facility or non-facility rate for POS 21
Medicare pays a physician fee schedule service billed with this code at the facility rate. The facility rate carries a smaller practice-expense component than the non-facility rate, because in a facility setting the facility, not the practitioner, bears the cost of the room, the staff and most supplies; where the facility is a Medicare provider it is paid for those costs on its own claim.
Chapter 12, section 20.4.2 of the Medicare Claims Processing Manual lists this setting as “Inpatient Hospital” on its facility list. The rule behind the list is that the code reflects where the beneficiary received the face-to-face service, except that services to a registered hospital inpatient or outpatient are paid at the facility rate wherever the encounter took place.
Registration decides POS 21, not the room: a practitioner who treats a registered inpatient reports at least POS 21 wherever the encounter happened, and may report the exact inpatient setting instead, such as POS 31, 51 or 61 (chapter 26, section 10.5).
Not every service has two rates: when the facility and non-facility amounts are the same, as they are for the professional component of a diagnostic test, the place of service does not change the payment. Outpatient therapy and comprehensive outpatient rehabilitation facility services are always paid at the non-facility rate.
Medicare instructions for this setting
Special considerations for Services Furnished to Registered Inpatients
When a physician/practitioner furnishes services to a registered inpatient, payment is made under the PFS at the facility rate. To that end, a physician/practitioner/supplier furnishing services to a patient who is a registered inpatient, shall, at a minimum, report the inpatient hospital POS code 21 irrespective of the setting where the patient actually receives the face-to-face encounter. In other words, reporting the inpatient hospital POS code 21 is a minimum requirement for purposes of triggering the facility payment under the PFS when services are provided to a registered inpatient. If the physician/practitioner is aware of the exact setting the beneficiary is a registered inpatient, the appropriate inpatient POS code may be reported consistent with the code list annotated in this section (instead of POS 21). For example, a physician/practitioner may use POS 31, for a patient in a SNF receiving inpatient skilled nursing care, POS 51, for a patient registered in a Psychiatric Inpatient Facility, and POS 61 for patients registered in a Comprehensive Inpatient Rehabilitation Facility.
Quoted from the Medicare Claims Processing Manual, Pub. 100-04, chapter 26, section 10.5.
POS 21 vs POS 22: what changes
Both are hospital codes paid at the facility rate; the patient's registration decides between them. POS 21 is for a registered inpatient and POS 22 for an outpatient of the main campus, including a patient in observation, which Medicare treats as an outpatient service. A practitioner reports at least POS 21 for a registered inpatient wherever the encounter took place (chapter 26, section 10.5).
| POS | Setting | Medicare rate | In effect since |
|---|---|---|---|
| 21 | Inpatient Hospital | Facility rate | Before 2003 |
| 22 | On Campus-Outpatient Hospital | Facility rate | Before 2003 |
Denials when POS 21 does not fit the claim
A place of service that conflicts with the procedure, the patient's registration or the payer's policy comes back with one of three codes. Claim adjustment reason code 5 means the procedure code or bill type is inconsistent with the place of service; reason code 58 means the payer considers the setting inappropriate or invalid for the service; and remark code M77 marks a missing, incomplete, invalid or inappropriate place of service. Medicare returns a line whose POS is missing, unassigned or incompatible with a site-specific procedure as unprocessable with CARC 16 and M77, so the fix is a corrected claim rather than an appeal (Pub. 100-04, chapter 26, section 10.6).
Where QuickIntell fits with place of service
QuickRCM covers eligibility, claim readiness, denials, posting and A/R with configurable automation and human review, the stage where the place of service code is checked against the setting, the registration and the modifier before the claim goes out, and where CARC 5, CARC 58 and M77 denials are worked.
Frequently asked questions
What is place of service code 21?
POS 21, Inpatient Hospital, is defined by CMS as follows: A facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under, the supervision of physicians to patients admitted for a variety of medical conditions. POS 21 is one of the long-standing codes that CMS lists without a date, meaning it was in effect on or before January 1, 2003 (Medicare Claims Processing Manual, Pub. 100-04, chapter 26, section 10.5). It sits in the hospital inpatient, outpatient and emergency department group with POS 19, POS 22 and POS 23.
Does POS 21 pay the facility or the non-facility rate?
The facility rate. Medicare Claims Processing Manual, Pub. 100-04, chapter 26, section 10.5 designates POS 21 F, so a physician fee schedule service billed with it is paid at the facility rate, the lower practice-expense amount paid when the setting rather than the practitioner carries the cost of space, staff and supplies. Chapter 12, section 20.4.2 lists it as "Inpatient Hospital" on the facility list. Services whose two rates are equal, such as the professional component of a diagnostic test, pay the same either way (chapter 12, section 20.4.2).
When should a claim use POS 21?
Registration decides POS 21, not the room: a practitioner who treats a registered inpatient reports at least POS 21 wherever the encounter happened, and may report the exact inpatient setting instead, such as POS 31, 51 or 61 (chapter 26, section 10.5).
Sources
Every figure on this page is taken from the CMS publications below, as released by the Centers for Medicare & Medicaid Services. Projection built 2026-10-10. Verify against the primary file before billing or contracting decisions. The reference methodology explains how each figure is computed from these files.
- CMS Place of Service Code Set (professional claims)Version CMS page last modified 2026-02-17; code table updated 2024-05-02 · effective 2024-08-01 · file code-sets.htmlSHA-256 d3a3caf2216784af…
- Medicare Claims Processing Manual, Pub. 100-04, chapter 26: Completing and Processing Form CMS-1500 Data SetVersion Rev. 12779, issued 2024-08-09 · effective 2024-08-09 · file clm104c26.pdfSHA-256 4fae39895fea412a…
- Medicare Claims Processing Manual, Pub. 100-04, chapter 12: Physicians/Nonphysician PractitionersVersion Rev. 13316, issued 2025-07-24 · effective 2025-07-24 · file clm104c12.pdfSHA-256 ca5ded3c8c676a23…
- CMS Place of Service Codes for Professional Claims (printable PDF)Version Place of Service Codes for Professional Claims, updated 2024-05-02 · effective 2024-05-02 · file website-pos-database.pdfSHA-256 cfe3ca7e3b130e5d…
Disclaimer
The definition is reproduced from the CMS Place of Service code set; the Medicare rate and instructions are from Pub. 100-04, chapters 12 and 26. Medicaid and commercial plans publish their own place of service rules. Not legal, clinical or billing advice.
Found a figure that does not match the CMS file? Report a data correction with the CMS file and the value you expected; the request reaches the editorial team through the contact form.