Did your hospital’s off-campus clinic bill for a typical outpatient visit, and was the claim reimbursed at a low percentage of what the practice had anticipated? Well, that is probably because of a missing modifier. The PO modifier was created especially to prevent misunderstandings of this nature.
Providing payers with the exact location of a service can change the entire reimbursement game in hospital outpatient billing. However, modifier PO creates a lot of confusion for billers when filling out claims.
This is exactly why, in this blog, we discuss the PO modifier in detail, explaining its importance and guiding healthcare providers to prevent claim denials.
PO Modifier – Description
The PO modifier is officially described as:
“Services, procedures, and/or surgeries furnished at excepted off-campus provider-based outpatient departments.”
The Centers for Medicare & Medicaid Services (CMS) mandates it on claims for goods and services provided in an off-campus, provider-based hospital’s outpatient department that are “excepted.”
This raises the question, “What do we mean by off-campus?” It is a facility owned and run by a hospital that is the main provider, located more than 250 yards from the main campus, usually within 35 miles, and is known as an off-campus provider-based department.
CMS needs a way to distinguish them from on-campus hospital departments and from freestanding physician practices because these departments bill under the hospital’s provider number rather than as a physician office. Hence, such outpatient off-campus departments are “excepted’ and entitled to higher Outpatient Prospective Payment System (OPPS) reimbursement rates.
Note that in order for an off-campus outpatient department to be “excepted” or grandfathered, the facility must be billing under the OPPS prior to November 2, 2015.
Scenarios Where the PO Modifier is Applicable
The following are some scenarios that may explain the use of the PO modifier in medical billing.
An Off-campus Imaging Center
Suppose a hospital runs its diagnostic and imaging center four miles from its main campus. A 40-year-old woman goes there for an MRI ordered by her cardiologist to evaluate persistent chest pain.
The radiology lab documents the study with the appropriate CPT code for the MRI on the UB-04 form, along with the PO modifier to identify the service location as an excepted off-campus department.
Routine Visit at a Hospital-Owned Clinic
Let’s say a woman schedules a follow-up appointment with her primary care physician at the hospital’s outpatient clinic after knee replacement surgery. The clinic is roughly five miles from the hospital’s main building but operates under the hospital’s name.
The hospital must include the PO modifier on the Medicare claim as the visit occurs at an excepted off-campus provider-based department.
Off-Campus Rehabilitation Center
Imagine another case where a 30-year-old man has to visit an outpatient rehabilitation center for his physical therapy twice a week following shoulder surgery. The rehabilitation center is owned by the hospital and is 10 miles from the hospital’s main campus. Despite that, it functions as one of its outpatient departments.
Since the therapy is provided at an excepted, off-campus, hospital-owned location, the PO modifier will be added to the UB-04 claim along with the appropriate therapy modifier (GP, GO, or GN).
PO Modifier – Billing Guidelines
Follow these billing guidelines to file clean claims with the PO modifier and avoid claim denials.
Don’t Append to Professional Claims
Modifier PO is especially reported to institutional or facility claims, i.e., UB-04 or CMS-1400 form. Therefore, the claim will be denied if a physician appends it to his professional (CMS-1500) claim.
Document the Modifier Properly
The accurate use of modifier PO should be evident from your records. If Medicare asks for more information, having complete and accurate paperwork helps support the claim. Hence, your supporting documentation should include:
- The precise place where the patient was treated.
- That the hospital owns and runs the establishment.
- The off-campus facility’s “excepted” status.
- The outpatient services rendered during the visit.
Verify that Facility Qualifies
Make sure the clinic or department meets Medicare’s requirements for being a grandfathered provider-based department of the hospital before applying the modifier.
A facility is not always eligible just because it is connected to a hospital. PO modifier is only applicable to departments that were billing under the hospital’s provider number prior to November 2, 2015, and for whom CMS has documentation of this.
Don’t Confuse PO with PN
Hospitals use modifiers PN and PO to indicate whether an off-campus outpatient clinic is “excepted” or “non-excepted” under Medicare regulations.
PO refers to an exceptional service at an older off-campus facility that opened prior to November 2, 2015. A non-excepted service at a more recent off-campus location that opened on or after November 2, 2015, is reported with modifier PN.
Avoid Incorrect Use of PO
Do not append the PO modifier for the following:
- If the services were rendered in the hospital’s main, on-site campus.
- In emergency rooms where PO reporting is not required.
- At establishments that Medicare regulations do not classify as provider-based departments.
Stay Updated with Medicare Policies
CMS keeps modifying reporting guidelines, payment policies, or billing requirements. Your billing team must routinely check Medicare guidelines to ensure the PO modifier is applied appropriately and claims comply with Medicare’s policies.
Conclusion
The PO modifier is used to maintain standard OPPS compensation instead of a lower rate. It notifies the payer that a treatment was rendered at an excepted, off-campus, provider-based hospital department.
CMS is tightening the reimbursement requirements for off-campus departments in the upcoming years, and because of this, accuracy in medical billing will only become more important.
Therefore, to maintain clean and compliant claims, practices that face complex billing issues should consider acquiring professional medical billing services.
