Are POS 02 Errors Delaying Your Payments? Practical Ways to Improve Telehealth Billing Accuracy
Master POS 02 billing with essential telehealth guidelines. Learn how to select the correct place of service, improve claim accuracy, and prevent costly denials.
The extra payment challenges that Telehealth providers can run into are issues resulting from the mismatch of the reported place of service with the actual place of service. An incorrect POS 02 code, missing or not-supportable modifier, or a billing configuration that is out of date may cause claim corrections, claim payment differences, or re-review from the additional payer.
These errors cause work for health-care organizations after claiming. Billing teams should attempt to figure it out, hand check the encounter record, adjust the claim if required, and then follow up on the payment. This will also make it difficult to detect authentic coverage issues and underpayments with repeated errors.
The solution is more than just checking a POS 02 code prior to submission. Practices should have accurate consultation information, claim edits identifying certain inconsistencies and correction systems that are based on the payers’ reaction. This guide provides an explanation of how to identify POS 02 errors, fix claims that are impacted and keep them from happening again.
What Is Place of Service 02 in Medical Billing?
Place of Service 02 is a two-digit code for those healthcare services provided to a patient outside of the home environment that involve the use of telehealth. POS codes are intended to provide a way to specify the surroundings of professional health care services, according to the Centers for Medicare & Medicaid Services (CMS). The national POS code set is provided by CMS, and individual payers have different reimbursement policies.
POS 02 identifies the location of a patient during a qualifying telehealth encounter. It’s no independent determination of coverage status or whether the submitted procedure code is payable or not. That’s important for the billing teams. A claim may have the right code but could be denied due to the lack of eligibility, documentation, or the lack of a payers’ requirements.
POS 02 vs. POS 10: Which Code Should You Report?
The POS 02 and POS 10 codes are dependent on the patient’s location at the time of a telehealth visit. The separation also helps Medicare determine what professional reimbursement rate to pay because of the rules in the affected Physician Fee Schedule.
| Claim detail | POS 02 | POS 10 |
|---|---|---|
| Official description | Telehealth provided other than in the patient’s home | Telehealth provided in the patient’s home |
| Patient location | Outside the home | At home |
| Example | Patient receives an eligible virtual service while at work | Patient receives an eligible virtual service from a private residence |
| Medicare professional payment rate | Facility rate | Non-facility rate |
How Does POS Selection Affect Medicare Payment?
Medicare professional claims should be submitted with POS 02 if the patient is located at a place of service and POS 10 if the patient is only located remotely. CMS also acknowledges that reimbursement at the non-facility Physician Fee Schedule (PFS) rate continues to be paid for home-based eligible telehealth services under the appropriate policy. This division is relevant in discrepancies in payments. A billing team should cross reference the submitted POS with the encounter record and applicable fee schedule prior to agreeing that the claim was underpaid by the payer. Never illegally make up a POS code to get more money. The documented encounter and applicable billing requirements must be reflected in the reported code.
Common Billing Scenarios for POS 02
The following are examples of billing teams’ decision-making regarding real-life encounters. POS 02 Codes will be correct depending on the documented setting, service eligibility and payer instructions.
Scenario 1: Patient Receives a Virtual Visit at Work
A patient’s private office at work during his scheduled video consultation. Provider conducts eligible telehealth service and location of patient is not billed to the system. The setting has been documented to assess POS 02 as long as the payers’ needs are met.
Claim action: Confirm the patients’ location from the encounter (procedure) record. Only update the claim if the code is supported by the documentation; correct the workflow that is responsible for not having the information on location.
Scenario 2: Patient Attends a Virtual Visit From Home
A patient logs into a video visit from their home. The EHR automatically sets the default to POS 02 because the staff will use the same default for all telehealth visits. If the telehealth service is an eligible professional telehealth service, POS 10 equates to that encounter, as defined by the CMS telehealth definitions.
Claim action: Check and compare the submitted POS and the documented location. The claim, should it be submitted, should be corrected prior to transmission. If the payer processes it, follow the correct process of dealing with the correction.
Scenario 3: Patient Connects From a School or Community Location
A virtual consultation with a patient that takes place in a school or other community setting away from home. The billing team will determine if the encounter meets the requirements for billing the particular service.
Claim action: Record patient location, confirm the payment and provider requirements of the payer. Don’t assume that a certain area will be covered.
Scenario 4: Patient Receives an Audio-Only Service Outside the Home
A provider makes a remote consultation on the telephone. The patient is being treated outside of the home, but the billing team is not sure if the procedure code would be eligible to be repaid via audio only.
The payer’s audio-only coverage rules should be reviewed and check the requirements of the reported procedure code. Check if modifier 93 or another coding way of reporting is applicable. Making adjusting claims only when documents and the payer’s policy indicate a change.
Scenario 5: Patient Location Is Missing From the Encounter Record
The claim is not for submission because the encounter documentation doesn’t provide sufficient details to determine the patient’s place of service. The use of the virtual appointment to be a reason for staff to consider assigning POS 02. This assumption poses a coding danger. Appointments can be held remotely, but this does not prove that the patient is located remotely.
Actions: “Clarify the claim” to retain back the claim in the practice’s documentation view. Don’t assume where the patient is from from a previous appointment or by their mailing address.
Which Modifiers and Service Codes Need Review?
A POS code is used to describe the setting of the occurrence. It is not the procedure code, is no substitute to establish service eligibility, and does not meet all the telehealth reporting requirements.
Modifier 95: Synchronous Audio-Video Services
Modifier 95 is used to report synchronous telemedicine services (real-time, interactive audio-visual transmission service). Will be used based upon applicable payers’ instructions & services required. If a modifier 95 is added, it is not a requirement for billing teams to add that to all claims with POS 02. If a payers recognizes that a modifier is missing or inconsistent, check the encounter documentation and the policy that applies to the date of service. Only correct when there is a modality reported in accordance with the claim.
Modifier 93: Synchronous Audio-Only Services
The American Medical Association (AMA) defines synchronous telemedicine services to be those that are furnished using interactive, real-time, audio-only technology. The CPT code should also comply with the valid reporting criteria. People using a completed telephone consultation do not automatically meet the criteria required for the consultation to be reimbursable. Limited coverage is available based on the procedure, applicable service requirements, and the payer.
Before discussing changes in a claim, always verify the provider’s documentation for the previously-correct modality, code validation, and the payer’s modifier instructions. Never use modifier 93 instead of modifier 95, unless it is determined which reporting requirements are in effect.
Verify CPT and HCPCS Eligibility
CMS provides an updated list of Medicare Telehealth Services that are covered under the Medicare Physician Fee Schedule if furnished by telehealth. Billing teams should make sure to check the patients eligibility for the date of service, not an old in-house file reference. There may be variations between commercial insurance policies and Medicaid policies. Questions to consider for Medicaid are also state specific. Please be aware that the change of the procedure code will not cure a coverage problem if the code does not meet the requirements of the appropriate payer’s policy. The billing team needs to solve the real issue of service eligibility.
Common POS 02 Billing Errors and Their Root Causes
The next table distinguishes the error from their probable cause, and what measure there is to take to correct it. The possibility of an outcome will be dependent on a claim edits and reimbursement policies by the payer.
| Billing error | Root cause to investigate | Claim-level solution |
|---|---|---|
| POS 02 assigned to a home-based visit | Fixed EHR default or missing location validation | Compare the encounter record with the claim. Correct the POS when supported by documentation. |
| POS 10 assigned to an encounter outside the home | Manual selection error or outdated workflow | Verify the recorded location and correct the claim under the payer’s procedure. |
| Required modifier omitted | Outdated payer instructions or charge-entry configuration | Check the payer’s rules and add the modifier only when supported. |
| Audio-only service billed without confirming eligibility | Staff assume all telephone visits qualify | Verify procedure code eligibility and the payer’s audio-only policy. |
| Medicare billing instructions applied to another payer | No payer-specific claim configuration | Review the actual plan’s requirements and correct the claim workflow. |
| Claim paid at an unexpected rate | Incorrect POS, fee schedule assumptions, or another payment factor | Compare the claim, remittance advice, and applicable contract or fee schedule. |
Why Fixed POS Defaults Create Repeat Errors
A fixed billing default means that each telehealth service is charged the same same POS code, no matter where the patient gets each service. This raises a constant risk if the patient moves location at patient visits. For instance, an individual awaiting treatment may go to one treatment at home and another at work. The EHR may not report the current encounter if the EHR is carrying over the prior POS with no verification of location.
More than one correction is needed for the correction. The practice needs to review how it is set up in the EHR, understand where the practice location data is going into the billing process and add a validation step before sending it in.
Why Payer Rules Must Be Separated
The national POS code definitions are maintained by CMS, although the regulations for determining the payment amount by the payers vary. Providers are instructed to report to and review individual payer policies to understand the reimbursement policy. One config of the modifier (monthly) applied to all plans can be problematic in case some claims have the wrong rule applied. Additionally, Medicaid coverage and reimbursement will differ by state, and commercial carriers can have their own policies that apply. The answer is consistent as maintained by reporting by the payers, but using an effective date. If a claim is rejected, staff must review the patient’s care plan, rather than alter codes based on another insurer’s policies.
How POS 02 Errors Affect Claim Payment
An invalid POS code does not automatically lead to a denial. The result is subject to the adjudication rules of the payer, the claim information and if the error is impacting coverage or payment.
Payment Discrepancies Require a Fee Schedule Review
If the claim is paid on the Medicare professional side, then POS 02 and POS 10 represent different payment-rate types, based on the applicable rules of the Physician Fee Schedule. The wrong code may then be responsible for a mis-payment.
The billing team should look at three things:
- A claim (and POS code) submitted.
- Allowed to have the payer’s remittance advice and adjustment information.
- The relevant fee schedule, or agreed payment conditions.
Where the payment received is not correct, determine if the payment process by the payer is a correction or an adjustment. If the POS is correct, don’t change the correct payment code, but look at other payment codes.
Coverage Denials Require a Different Response
The service may be denied due to the modality or type of services reported or due to payer’s requirements for the type of service identified. These problems are distinct from an incorrect POS code. For instance, a particular service could be performed correctly, but not meet the requirements of a patient’s plan. There isn’t a coverage item that changes if you change POS 02 to POS 10. The billing team should examine the payer’s explanation of benefits or electronic remittal advice and decide on the stated reason and the option of correction, reconsideration, or appeal for the claim.
Repeated Corrections Increase Administrative Costs
Recurring errors come with staff time of reviewing the claim, documenting the checkup errors, following up with the payers, and reconciling payments. Over-correction also makes it more difficult to identify real-world issues impacting reimbursement. Identify payer-specific and error/root cause corrections to POS. This allows practice administrators to see if the issue stems from system configuration, manual coding or requirements of the specific payers.
How to Correct a POS 02 Claim Error
The correction method is context dependent on the claim’s current state. If someone has previously already made a claim and received payment, then the answer is different to a claim rejected before adjudication.
Step 1: Identify the Claim Status
Get the first submission and the response from the payer. Check for rejection prior to process, denial after adjudication or unexpected payment. Do not presume that the outcome was a result of the POS coding, if there was a claim made for telehealth. An investigation is needed on the issue revealed by response from the payer.
Step 2: Find the Incorrect Claim Element
Double check the information submitted in the POS, procedure code, modifier and other information against the record and applicable payer policy. For instance, POS 02 claims the patient was at home at the time and confirms that POS 10 is present. If the POS is right, but the modifier is not present, discuss the need for the modifier separately. This helps to defuse the validity of a valid code without solving the actual problem.
Step 3: Follow the Appropriate Payer Process
Submit the claim’s status based on the instructions given by the Payer.
- Rejected prior to adjudication: Make the necessary corrections and resubmit as directed by the payers.
- Denied after adjudication: Determine if the payers need to be offered the claim from a corrected claim, reconsideration or an Appeal.
- Paid incorrectly: Check or review incorrect payment adjustment and/or correction-claim procedure and submit required documentation if applicable.
Apply the claim indicators and reference information to a claim for payment, as required by the payer. Refrain from filing a duplicate original claim if it has not been determined by the proper procedure.
Step 4: Confirm the Final Payment
Monitor and monitor/advise submission for correction. Check receipt, check the remittance (resulting) advice and determine if the payment is for correct claim and appropriate reimbursement guidelines. Note the result and the original cause. Do not consider each claim as an isolated incident, but escalate if multiple claims occur with the same problem so that the problem can be corrected within the workflow.
How to Prevent Repeat POS 02 Errors
The emphasis should be on controls that will intercept actual causes that have been found in claim reviews. Three controls are suggested to deal with the most common workflow risks.
Configure Location Validation in the EHR
Ask the provider in the billing workflow to get patient location for every telehealth visit. In the event that the location is not found, mark the claim for review for this will not be assigned as POS 02. Run a workflow with encounters in and out of the house. Make sure it doesn’t automatically record the location of a previous appointment if you didn’t specify.
Build Targeted Claim-Scrubbing Edits
Set up the available claim edits to alert for certain inconsistencies, such as no location information available, a modifier that contradicts the claimed modality, or a procedure code that needs an extra eligibility check. The edits should motivate employees to delve into the matter. They are not allowed to simply post an automatic POS code adjustment or modifier change without documentation. Check on flagged claims regularly and update or revoke flags as appropriate so as to avoid needless holds due to claims that actually are correct.
Audit Error Rates and Payment Outcomes
Review a sample of the POS 02 and POS 10 claim each month for review. Reconcile the claim data with the encounter details, payer directions and the final payment (remittance) results. Observe and record the number of corrections per root cause. If location errors are still occurring on a regular basis, then explore the configuration of the EHR. If errors in modifiers outweigh other errors, review the following: payer-specific coding guidelines and charge entry practice. Compare the results of the audit against the corrective action taken and determine if errors are reduced. Avoid using all denials and underpayments as claims for POS coding.
How Billing Care Solutions Supports Accurate Telehealth Billing
Billing Care Solutions supports healthcare practices by helping them with the revenue cycle management. If practices are having issues with telehealth claims, their focus is identified as claim preparation, coding audit, claim denial follow-up, and investigation of any discrepancies with payments, when they offer telehealth services as part of the engagement.
During a targeted review, it will be determined that POS selection is not working as expected, that payer instructions are up to date, and how staff correct rejected claims and adjudicated claims. The resulting recommendations should point to the misconfiguration reason, like no encounter information, out-of-date billing rules, or repeated billing issues.
Practices should assess billing support by documented means such as correctness frequency, reoccurring denial reasons and payment follow-up achievements. All statements of better collections and fewer denials should have measurable evidence to back them up.
Conclusion
The proper reporting of POS 02 requires the patient’s actual place of service, the service being rebilled, and the applicable rules of the payer. Claim discrepancies can be avoided due to incorrect default, modifiers that are not supported, and billing instructions that have changed.
The best strategy is to pinpoint the underlying problem, salvage the faulty claim following the payer’s practice, and correct the workflow that may be causing the issue to reoccur. Claim editing and periodic audits assist practices to differentiate between POS errors and coverage denials and other payment issues.
Practices can have access to a care assessment that looks at relevant billing and revenue cycle workflows with the assistance of Billing Care Solutions. A targeted review of recurring claims issues provides billing teams with a real plan for submitting accurate claims and for keeping claims paid up and running.
