What are Place of Service (POS) codes in medical billing?
POS 11 means office, POS 19 is off-campus outpatient hospital, POS 20 is urgent care, POS 22 is on-campus outpatient hospital, POS 02/10 are telehealth. The code decides whether Medicare pays the physician the office (non-facility) rate or the lower facility rate: in 2026, an established-patient office visit (99213 to 99215) pays 35 to 40 percent less at the facility rate, a Sorso calculation from CMS's relative value file. Below: the 2026 CMS Place of Service codes most practices use.
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Definition
Place of Service (POS) codes are 2-digit numeric identifiers, defined by CMS, used on the CMS-1500 health insurance claim form to identify the physical location where a service was rendered.
The detail
Place of Service codes determine reimbursement because Medicare and commercial payers pay different rates for the same CPT code depending on where it was performed. The site-of-service differential is real money. CMS uses facility practice expense RVUs for services in hospital inpatient and outpatient settings, emergency rooms, skilled nursing facilities and ambulatory surgical centers, and non-facility RVUs everywhere else, so an E/M visit billed under POS 11 (office) is paid at the non-facility rate while the same visit under POS 22 (on-campus outpatient hospital) is paid at the lower facility rate. In CMS's 2026 relative value file, 99213 carries 2.85 total RVUs at the non-facility rate and 1.72 at the facility rate, 40 percent less; 99214 is 38 percent less and 99215 35 percent less (Sorso calculation). The hospital bills its own facility fee separately, so this is the physician's share only. Below is the working list of POS codes most healthcare practices use. POS 02: Telehealth Provided Other Than in Patient's Home. POS 10: Telehealth Provided in Patient's Home (effective January 1, 2022, and available to Medicare from April 1, 2022). POS 11: Office (the default for in-clinic care). POS 12: Home (visits to patient's residence). POS 19: Off Campus Outpatient Hospital (hospital-affiliated outpatient clinic not on the main hospital campus). POS 20: Urgent Care Facility. POS 21: Inpatient Hospital. POS 22: On Campus Outpatient Hospital. POS 23: Emergency Room. POS 24: Ambulatory Surgical Center. POS 31: Skilled Nursing Facility. POS 32: Nursing Facility. POS 49: Independent Clinic. POS 50: Federally Qualified Health Center. POS 71: Public Health Clinic. POS 72: Rural Health Clinic. POS 81: Independent Laboratory. Frequent billing errors involve telehealth (POS 02 vs POS 10), confusing POS 19 (off-campus hospital outpatient) with POS 22 (on-campus), and using POS 11 when the practice is actually a hospital outpatient department. CMS maintains the full code set and revises it when codes are added or changed (POS 66 was added effective August 1, 2024), so check the current list at least once a year.
POS 02 and POS 10 became separate telehealth codes effective January 1, 2022 (available to Medicare April 1, 2022): 02 when the patient is not at home, 10 when the patient is at home.
Source: CMS Place of Service Code Set
In CMS's 2026 relative value file, office visit 99213 carries 2.85 total RVUs at the non-facility rate and 1.72 at the facility rate used for POS 22, 40 percent less; 99214 is 38 percent less and 99215 35 percent less (Sorso calculation).
Since January 1, 2024, Medicare pays telehealth provided to patients at home (POS 10) at the non-facility rate; POS 02 is for telehealth when the patient is somewhere other than home.
What this means for clinic owners
From Sorso
POS code errors are quiet money leaks, because a claim that simply pays the wrong rate is rarely rejected. Audit a sample of claims by service type each quarter; telehealth and any off-campus location are the easiest places for a wrong code to go unnoticed.
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What is a healthy denial rate?
A healthy initial denial rate is under 5 percent of submitted claims: HFMA calls that optimal, AAFP calls it more desirable, and both put the industry average at 5 to 10 percent. Optum's 2024 Denials Index, based on hospital claims, found an average denial rate of 12 percent in 2023. Track denial write-offs as a share of net patient revenue too, the metric HFMA lists as AR-6.
What is modifier 25 used for?
Modifier 25 indicates that a significant, separately identifiable Evaluation and Management (E/M) service was performed by the same physician on the same day as a procedure, allowing both to be billed when properly documented.
How do I improve my net collection rate?
Improve net collection rate by working denials promptly, reconciling payments against your contracted rates, collecting patient balances at the point of service, and requiring sign-off on write-offs. The target is at least 95 percent, with 97 to 99 percent optimal (HFMA), and each point you recover is worth $50,000 a year on $5 million of allowed charges.
What are the most common billing errors in healthcare?
The most common healthcare billing errors are eligibility verification failures, missing prior authorization, incorrect or missing modifiers (especially modifier 25 and 59), upcoding/downcoding, missing documentation for medical necessity, and timely filing failures.
How does Medicare telehealth reimbursement work for outpatient clinics in 2026?
Medicare pays telehealth under the Physician Fee Schedule, billed with the same CPT or HCPCS code as the in-person service plus a telehealth place-of-service code: POS 10 when the patient is at home, POS 02 anywhere else. Since January 1, 2024, visits to patients at home are paid at the non-facility rate, the same rate as an office visit. The pandemic-era flexibilities that let patients receive telehealth anywhere, including at home, run through December 31, 2027 under current law, after which most non-behavioral services revert to patients in a medical facility in a rural area.
Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.
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