What is Medicare facility vs non-facility?

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Medicare facility and non-facility settings determine the reimbursement rate a doctor or practitioner receives under the Medicare Physician Fee Schedule (MPFS) based on where a service is performed.

Key Differences

  • Non-Facility Setting:
    • Includes private physician offices, patient homes, and independent walk-in clinics.
    • Reimbursement Rate: Higher.
    • Reason: The physician or practice bears all overhead costs, including staff salaries, medical supplies, equipment, and building maintenance.
  • Facility Setting:
    • Includes hospitals, ambulatory surgical centers (ASCs), emergency rooms, and skilled nursing facilities.
    • Reimbursement Rate: Lower for the physician's professional service.
    • Reason: The facility itself bills Medicare separately (under Part A or as a facility fee) to cover the overhead, equipment, and nursing staff.

Role of Place of Service (POS) Codes

  • Physicians indicate the setting by submitting a Place of Service (POS) code on their medical claims.
  • Examples of non-facility codes include POS 11 (Office).
  • Examples of facility codes include POS 19/22 (Off-campus/On-campus Outpatient Hospital) or POS 21 (Inpatient Hospital).
  • Selecting the correct code is vital because miscoding a facility service as non-facility can trigger costly overpayment recoveries by Medicare.

You can look up specific payment rates using the Medicare Physician Fee Schedule Lookup Tool provided by the Centers for Medicare & Medicaid Services.

What is the difference between facility and non-facility?

The difference between facility and non-facility settings in medical billing lies in where a health service is performed and who pays for the operational overhead.

  • Facility setting: Locations like hospitals, ambulatory surgical centers, and skilled nursing facilities. The institution covers the staff, equipment, and supplies, so Medicare pays the physician a lower rate.
  • Non-facility setting: Privately owned physician offices or homes. The doctor must pay all overhead expenses, so Medicare pays a higher reimbursement rate to cover those costs.

You can review complete lists of settings and rules via the Medicare Claims Processing Manual to ensure accurate coding.

Is POS 22 considered a facility or non-facility?

Place of Service (POS) code 22 is considered a facility setting for medical billing and payment purposes.

What POS 22 Means

  • Definition: POS 22 stands for On-Campus Outpatient Hospital.
  • Usage: You use this code when a patient receives care inside an outpatient department located on a main hospital campus without being admitted as an inpatient.
  • Official Rules: You can review the official definitions through the Place of Service Code Set - CMS.

How It Affects Billing

  • Lower Rates: Insurance payers like Medicare usually pay the professional service using a lower facility rate because the hospital bills separately for overhead costs.
  • Split Billing: Providers often submit professional fees on one claim, while the hospital submits facility fees on a separate claim.
  • Guidance: You can read more about how these settings function via What are POS 11 and POS 22 in Medical Billing?.

Is POS-10 considered a facility or non-facility?

Place of Service (POS) code 10 is considered a non-facility setting.

Overview of POS 10

  • Definition: Telehealth services provided when the patient is located in their home or a non-facility residence.
  • Payment Rate: Reimbursed at the non-facility rate, which typically matches the higher in-office payment rate under the CMS Place of Service Code Set.
  • Overhead Reason: The payment matches an in-person office visit because the provider carries the practice overhead rather than a clinical facility.

Key Differences: POS 10 vs. POS 02

  • POS 10 (Home): Non-facility rate (patient is at home or personal residence).
  • POS 02 (Other locations): Facility rate (patient is at a hospital, clinic, or facility outside the home).
  • Official Guidance: According to CMS Manual System Transmittal 12671, the POS code dictates whether the non-facility or facility fee schedule applies to the telehealth claim.

Do Medicare patients have to pay facility fees?

Yes, Medicare patients do have to pay facility fees if they receive outpatient care at a hospital-owned clinic or facility.

How Medicare Covers Facility Fees

  • Original Medicare (Part B): Covers the approved amount for facility fees, but you are typically responsible for a 20% coinsurance payment after meeting your yearly Part B deductible.
  • Medicare Advantage (Part C): Must cover these services, but your specific copayments or coinsurance will depend on your plan's rules and network limits.
  • Medigap (Supplemental Insurance): Many supplemental plans help cover or fully pay your 20% coinsurance and deductibles for these extra hospital charges.

What You Should Know

  • Split Billing: Hospital-based clinics often bill for a visit in two parts: a professional fee for the doctor's time and a facility fee for room, equipment, and support staff expenses.
  • Advance Notice: Most hospital-owned practices must disclose potential facility fees to you before your appointment begins.

Medicare and Skilled Nursing Facility Discharge: Understanding Your Rights

9 related questions found

What is the difference between Medicare facility and non-facility prices?

Medicare non-facility prices are higher than facility prices because non-facility settings require the doctor to pay for overhead costs like staff, equipment, and supplies.

Key Differences

  • Overhead Costs: Non-facility rates include a higher practice expense value to cover private office operation costs. Facility rates are lower because the institution covers those costs separately.
  • Location Types:
    • Non-facility: Private physician offices and patient homes.
    • Facility: Hospitals, ambulatory surgical centers, and skilled nursing facilities.
  • Place of Service (POS) Codes: Claims must report the correct code (such as POS 11 for an office or POS 22 for a hospital outpatient setting) so Medicare applies the proper rate.

Is place of service 20 considered facility or non-facility?

Place of Service (POS) code 20 is considered a non-facility setting for Medicare Physician Fee Schedule purposes.

Despite the name "Urgent Care Facility," CMS classifies POS 20 under the non-facility payment category because the billing provider or independent practice typically covers the direct operational and overhead expenses.

Key Details

  • Payment Rate: It uses the higher non-facility reimbursement rate, which accounts for practice overhead like staff and supplies.
  • Definition: It applies to freestanding, non-hospital-affiliated urgent care centers providing unscheduled, immediate ambulatory care.
  • Distinction: Do not confuse it with hospital-based outpatient settings like POS 22 (On-Campus Outpatient Hospital) or POS 23 (Emergency Room), which are true facility settings.

Can you bill 99214 with place of service 22?

Yes, you can bill CPT code 99214 with Place of Service (POS) 22 when an established patient is seen in an on-campus hospital outpatient department or hospital-owned clinic.

Key Billing Requirements

  • Code Definition: CPT 99214 covers an evaluation and management (E/M) visit for an established patient requiring moderate-complexity medical decision-making (MDM) or 30 to 39 minutes of total time.
  • Place of Service 22: POS 22 specifies an On-Campus Outpatient Hospital setting.
  • Facility Rate Pricing: Billing 99214 with POS 22 triggers the facility payment rate, which is typically lower than the non-facility rate paid under POS 11 (office) because the hospital incurs overhead costs separately.
  • Documentation Support: The medical record must clearly support either moderate MDM (meeting elements like number of problems, data complexity, and risk) or the requisite time spent on the date of service.

What is considered a facility?

A facility is a building, place, or collection of equipment built, installed, or established to serve a specific purpose or provide a particular service.

General Definition

In everyday use, a facility refers to any physical location or structure designed for an activity.

  • Examples include hotels, schools, gyms, and office complexes.
  • It can also mean a built-in feature or service provided by a tool or machine (such as an internet facility on a phone).

Healthcare and Medical Contexts

In medicine, a facility is a licensed organization or physical site where healthcare services are delivered to patients.

  • Inpatient and Outpatient Centers: Hospitals, urgent care centers, ambulatory surgical units, and rehabilitation clinics.
  • Residential Care: Nursing homes, assisted living residences, and hospices.
  • Note: Regulatory bodies like the Centers for Medicare & Medicaid Services (CMS) distinguish licensed facilities from standard private doctor's offices for billing and compliance.

Industrial and Legal Contexts

In law, engineering, and business, the definition broadens significantly.

  • Manufacturing and Production: Factories, assembly plants, and power plants.
  • Legal and Property Definition: Includes real and personal property, such as specific structures, equipment, parking lots, and vehicles attached to a worksite.
  • Financial Services: A formal financial arrangement or line of credit provided by a bank, such as an overdraft facility.

Is POS 19 a facility or a non-facility?

Place of Service (POS) code 19 is a facility setting for medical billing and Medicare reimbursement.

Key Details for POS 19

  • Definition: Off-Campus-Outpatient Hospital.
  • Payment Rate: It is paid at the facility rate (designated as "F" in fee schedules), similar to on-campus outpatient hospital services (POS 22).
  • Usage: Used by providers when services are rendered in a portion of an off-campus hospital provider-based department.