Place of Service Codes in Medical Billing

Last Updated on September 15, 2025 by admin

Every medical claim tells a story, about the care delivered, and also about where it was delivered. In medical billing, this is captured by Place of Service (POS) codes. These two-digit numbers may look simple, but they directly impact how claims are processed, what reimbursement rates apply, and whether a payer will approve or deny a claim.

POS codes are a standardized part of billing that providers report on professional claims (CMS-1500 or electronic 837P). They let payers know if a service occurred in a physician’s office, a hospital, a patient’s home, or another setting. Using the wrong code can trigger claim rejections, audits, or underpayments.

In this guide, we’ll explain what POS codes are, how they work in medical billing, and review the most commonly used POS codes

Understanding Place of Service (POS) Codes

Place of Service codes are two-digit numeric identifiers created by the Centers for Medicare & Medicaid Services (CMS). They indicate the location where a healthcare service was provided. For example:

• POS 11 → Office
• POS 21 → Inpatient Hospital
• POS 24 → Ambulatory Surgical Center

In medical billing, POS codes are used on professional claims (CMS-1500 / 837P). Institutional claims (UB-04 / 837I) do not require POS codes.

For billers and coders, POS codes are essential for:

• medical billing service accuracy
• Reimbursement rate calculation
• Payer compliance and audit readiness

Facility vs Non-Facility POS Codes

One of the most important distinctions in POS coding is between facility and non-facility settings.

• Non-facility (e.g., POS 11 – Office): Reimbursement includes overhead since providers incur costs for rent, staffing, and supplies.
• Facility (e.g., POS 21 – Inpatient Hospital, POS 22 – Outpatient Hospital): Reimbursement is often lower because the hospital or facility absorbs many overhead costs.

This distinction affects how Medicare and commercial payers calculate the physician fee schedule and why POS codes are directly tied to payment.

How POS Codes Affect Billing and Payments

Getting the POS wrong can disrupt the entire revenue cycle. Some common consequences include:

• Claim Denials: For example, billing an emergency service under POS 20 (Urgent Care) instead of POS 23 (ER) may cause a denial.
• Underpayment: If you bill a hospital-based service as POS 11 (office), Medicare will underpay since it expects the service was delivered in a non-facility setting.
• Audit Risk: Auditors often flag mismatches between documentation (e.g., patient admitted to inpatient unit) and billed POS code.

Simply put: POS codes aren’t just numbers, they are compliance and reimbursement signals.

Common POS Codes in Medical Billing

The full CMS list contains more than 50 codes, but most providers encounter a core set repeatedly. Below are the most commonly used POS codes in billing workflows.

Quick Snapshot

POS Code	Setting	Usage
10	Telehealth – Home	Virtual visits when patient is at home
11	Office	Routine checkups, minor procedures
12	Patient’s Home	In-person home visits, chronic care
20	Urgent Care	Walk-in, non-life-threatening issues
21	Inpatient Hospital	Admitted patient surgeries, diagnostics
22	Hospital Outpatient	Lab tests, outpatient procedures
23	Emergency Room	Trauma, urgent stabilization
24	Ambulatory Surgical Center	Same-day outpatient surgeries
31	Skilled Nursing Facility	Post-acute rehab, long-term recovery
32	Nursing Facility	Long-term custodial care
49	Independent Clinic	Community-based primary care
50	FQHC	Comprehensive primary care in underserved areas
65	ESRD Facility	Outpatient dialysis treatment

POS 10 – Telehealth Provided in Patient’s Home

• Description: Newer code for telehealth when the patient is located in their residence.
• Usage: Virtual visits, chronic care check-ins, behavioral health therapy at home.
• Importance: Helps distinguish reimbursement rules from POS 02.

POS 11 – Place of Service 11 (Office)

• Description: Services performed in a physician’s or provider’s office.
• Usage: Routine visits, checkups, minor procedures.
• Billing Impact: Considered a non-facility setting, so reimbursement is higher than hospital-based clinics.

POS 12 – Place of Service 12 (Patient’s Home)

• Description: Services rendered in the patient’s residence.
• Usage: Home visits, chronic care management, some remote monitoring support.
• Note: Distinguish from POS 10 (Telehealth in Patient’s Home)—POS 12 is for in-person home services.

POS 20 – Place of Service 20 (Urgent Care Facility)

• Description: Services provided at an urgent care facility, distinct from ER.
• Usage: Walk-in centers for non-life-threatening conditions.
• Pitfall: Confusing POS 20 with POS 23 (ER). Claims may be denied if the service setting is miscoded.

POS 21 – Place of Service 21 (Inpatient Hospital)

• Description: Services delivered when a patient is formally admitted to a hospital.
• Usage: Surgeries, extended stays, inpatient diagnostic services.
• Reimbursement: Lower than office-based services since hospital overhead is included in facility billing.

POS 22 – Place of Service 22 (Hospital Outpatient)

• Description: Services provided in a hospital outpatient department, typically on-campus.
• Usage: Lab work, outpatient procedures, specialty visits.
• Recent Change: CMS differentiates between on-campus vs off-campus outpatient departments—important for compliance.

POS 23 – Place of Service 23 (Emergency Room – Hospital)

• Description: Emergency services rendered in a hospital emergency room.
• Usage: Trauma care, urgent stabilization, emergency diagnostics.
• Tip: Payers reimburse ER services differently than urgent care (POS 20). Using the wrong code can lead to significant underpayments.

POS 24 – Place of Service 24 (Ambulatory Surgical Center)

• Description: Outpatient surgical procedures performed in an ambulatory surgical center (ASC).
• Usage: Same-day surgeries (endoscopy, cataract surgery, orthopedic procedures).
• Reimbursement: ASC billing is distinct from hospital outpatient billing. Payers expect POS 24 with ASC claims for proper adjudication.

POS 31 – Skilled Nursing Facility (SNF)

• Description: Services provided to patients residing in a skilled nursing facility.
• Usage: Extended rehabilitation, post-acute care, long-term recovery.
• Audit note: Must ensure services match the SNF admission record.

POS 32 – Nursing Facility

• Description: Care provided in nursing facilities that are not Medicare-certified SNFs.
• Usage: Long-term custodial care.
• Difference: Often confused with POS 31; correct use is essential for compliance.

POS 49 – Independent Clinic

• Description: Services provided in a free-standing, independent clinic.
• Usage: Primary care, community-based health clinics.
• Tip: Differentiate from POS 11 (office) and POS 22 (hospital outpatient).

POS 50 – Federally Qualified Health Center (FQHC)

• Description: Services rendered in an FQHC, which provides comprehensive primary care services to underserved populations.
• Usage: Medicaid-heavy populations, community access points.
• Compliance: Special billing rules apply, especially for wraparound payments.

POS 65 – End-Stage Renal Disease (ESRD) Treatment Facility

• Description: Dialysis services provided at an ESRD facility.
• Usage: Outpatient dialysis care.
• Reimbursement note: Medicare has specific bundled payment rules for ESRD care, making correct POS coding crucial.

Best Practices for Using POS Codes Correctly

Avoiding Common Errors

• Always verify patient admission status before coding inpatient vs outpatient (POS 21 vs POS 22).
• Confirm whether telehealth is coded as POS 02 (non-home) or POS 10 (home), not POS 12.
• Ensure that urgent care visits are not miscoded as ER.

Documentation and Compliance

• Clinical documentation must align with the POS billed.
• For compliance audits, discrepancies between encounter notes and POS coding are red flags.
• Use internal audits to check for repeated POS coding errors.

Staying Updated with CMS Guidelines

• CMS periodically revises POS codes, especially for telehealth.
• Providers should maintain an updated POS code cheat sheet.