In the business of healthcare, getting your coding right is the absolute foundation for reliable payments. One wrong code can mess up your entire revenue cycle system and cost your practice valuable time and money. When dealing with remote services telehealth, you have two vital Place of Service (POS) codes to master: POS 10 and POS 02.
Most people know POS 10 is used when a patient is sitting at home. But POS 02 is the powerhouse code that handles almost every other virtual service location, making it essential for compliance and ensuring you receive the correct reimbursement. This guide will show you precisely what POS 02 is, why it’s so important today, and how to use it perfectly every single time to keep your cash flow healthy.
Understanding Place of Service (POS) Codes
POS codes are simple, two-digit identifiers you put on insurance claims to show exactly where a healthcare service was provided. These codes are non-negotiable for claim processing because they help payers—like Medicare, Medicaid, and private insurance—figure out three key things: if the service is covered, if you’re in compliance, and what the correct reimbursement rate should be.
Definition of POS Codes in Medical Billing
A POS code is basically a standardized label on the professional claim form (CMS-1500). Every service you bill for needs one. Its whole purpose is to clearly tell the insurer the physical setting of care delivery. If this detail is missing, the payer simply won’t process the claim.
Why POS Codes are Critical for Claim Accuracy
If the POS code isn’t right, the claim is almost guaranteed to be rejected.
Anecdote: Think about a busy team of billers managing orders for a large mental health business. One person on the new customer support service team made a simple mistake: they defaulted to using POS 11 (Office) for every virtual session. The insurance company rejected 90% of those claims instantly. Why? Because the CPT codes showed it was a telehealth service, but the location code (POS 11) said it was in-person. The massive delay in payments that followed severely impacted their expected sales revenue.
Overview of Common POS Codes (POS 02, POS 10, POS 11, POS 15, POS 21)
| POS Code | Location | Description |
| 02 | Telehealth – Other Than Patient’s Home | Virtual visit with patient in a clinic, school, SNF, etc. |
| 10 | Telehealth – Patient’s Home | Virtual visit with the patient in their private residence. |
| 11 | Office | In-person visit to the physician’s practice. |
| 15 | Mobile Unit | Service delivered from a traveling van or clinic. |
| 21 | Inpatient Hospital | Service is delivered when the patient is formally admitted to the hospital. |
Impact of Correct POS Selection on Reimbursement and Compliance
Choosing the right POS code directly dictates how much you get paid. A claim for an office visit (POS 11) gets paid at the full Non-Facility Rate. A claim for a telehealth visit where the patient is in a facility (POS 02) usually gets paid at the lower Facility Rate. Misusing these codes is considered a compliance risk and can easily lead to an audit.
What is POS 02 in Medical Billing?
POS 02 is the specific code used when a healthcare service is provided remotely, but the patient is physically located outside their private residence.
Official Definition and CMS Interpretation
The official definition of POS 02 is: “Telehealth Provided Other than in a Patient’s Home.” The Centers for Medicare & Medicaid Services (CMS) requires this to ensure that payments are adjusted correctly based on the location where the patient received the service, especially when that setting is not their own home.
How POS 02 Applies Specifically to Telehealth Services
You use POS 02 anytime a provider connects from a distant site to a patient using video or audio technology, and that patient is in any non-private setting. This is important because it acknowledges that the institutional facility (like the clinic or hospital outpatient department) where the patient is located is the originating site, and has its own associated costs.
Difference Between POS 02, POS 10 (Home Telehealth), and POS 11 (Office)
| POS Code | Service Type | Patient Location | Payment Rate |
| 02 | Telehealth | Non-Home Facility/Setting | Facility Rate (Lower) |
| 10 | Telehealth | Patient’s Home | Non-Facility Rate (Higher) |
| 11 | In-Person | Physician’s Office | Non-Facility Rate (Higher) |
Examples of Common Scenarios for POS 02 Usage
- A specialist performs a virtual consultation with a patient located at a rural community health center.
- A psychiatrist connects via video with a patient who resides in a Skilled Nursing Facility (SNF).
- A pediatrician checks on a student located at the school nurse’s office with a registered nurse present.
Key Differences POS 02 vs POS 10
Understanding this distinction is the foundation of successful telehealth coding.
Purpose of Each Code and When to Use
- POS 02: Use this when the patient is in a setting that is institutional or semi-public. Its main purpose is to identify a service where the physical site (where the patient is) already has established overhead costs (like rent, hardware, staff).
- POS 10: Use this when the patient is in their private residence. Its purpose is to ensure the provider (at the distant site) gets a payment that covers their full overhead, essentially treating it like an in-person POS 11 visit.
How Reimbursement Rates Differ Between POS 02 and POS 10
The money difference is significant. POS 10 pays the full Non-Facility Rate. POS 02 triggers the lower Facility Rate. If you use POS 02 when the patient was actually at home, you are guaranteed to receive a smaller payment.
Billing Best Practices for Accurate Claims
You should always verify the patient’s location during the appointment and record it clearly in the electronic health record. Don’t just copy the last POS code. If your POS system or software is smart, make sure it has validation checks specifically for this key distinction.
Table Comparison of POS 02 vs POS 10 for Quick Reference
| Feature | POS 02 | POS 10 |
| Definition | Telehealth Other than Home | Telehealth in Patients’ Homes |
| Patient Location | Clinic, School, SNF, Workplace | Private Residence |
| Payment Rate | Lower Facility Rate | Higher Non-Facility Rate |
| Primary Goal | Compliance for institutional telehealth | Maximize reimbursement for home telehealth |
POS 11 in Medical Billing Office Visits
POS 11 is the traditional, go-to code in medical billing. It simply confirms the service was provided in a physician’s office or clinic.
Definition and Purpose of POS 11
POS 11 is defined as an Office. Its purpose is to indicate a classic, in-person encounter where the patient and the provider are physically together in the practice setting. It’s one of the most common codes used and always qualifies for the higher Non-Facility Rate.
Differences Between Office and Telehealth Visits
The key difference is physical proximity. A POS 11 service must be face-to-face. A POS 02 or POS 10 service relies on video or audio technology. A major error is using POS 11 for a telehealth visit, which will result in an immediate claim rejection because the CPT code and location code will conflict.
Implications for Claim Approvals and Reimbursement
Using POS 11 correctly ensures the highest professional reimbursement. However, if you are billing a virtual service, you must switch to either POS 02 or POS 10 and attach a modifier to ensure the claim processes correctly.
How POS Codes Affect Reimbursement and Claims
The initial selection of the right POS code is your best defense in revenue cycle management.
Role of Accurate POS Coding in Avoiding Denials
Every time a claim goes out with the wrong POS code, the payer’s computerized system rejects it. Dealing with denial management is costly, takes up staff time, and significantly slows down your cash flow. Accuracy right at the point of data entry is crucial.
Impact of Errors on Compliance Audits and Claim Rejections
If you have a repeated pattern of using the wrong POS code—for example, consistently using POS 10 (Higher Rate) for services that should have been POS 02 (Lower Rate)—it signals potential issues to CMS. This will invite a full compliance audit and can force your practice to pay back past payments.
Real-Life Examples of Claim Success and Errors due to POS Misplacement
A highly efficient business used a mandatory checklist to verify the patient’s location for every telehealth appointment. Their billers only had to choose between 02 or 10. Because their internal audit system enforced accuracy, their virtual claim approval rate stayed around 98%. On the flip side, a competing business that lacked such tools saw claim rejections soar to 30%, resulting in weeks of delayed payments and lost administrative time.
Common Modifiers Used with POS 02
The POS code tells the payer where the service happened. The modifier tells them how it happened.
Overview of Telehealth-Specific Modifiers
For telehealth billing, modifiers are necessary flags that confirm the service was delivered via telecommunications.
How to Pair POS 02 with Modifiers for Correct Billing
When billing POS 02, you use the standard CPT code for the service (e.g., 99213) and then attach the appropriate modifier.
Examples: 95, GT, GQ, and G2211, where applicable
- Modifier 95: This is the industry standard modifier. Use it for synchronous (real-time, interactive audio and video) telemedicine service. It is almost always required with POS 02.
- Modifier GT: An older modifier for telehealth. CMS prefers 95, but some private payers might still accept or require GT.
- Modifier GQ: Used for asynchronous (“store-and-forward”) telehealth service. Its use is very limited, mainly to specific federal programs.
- HCPCS Code G2211: Not a modifier, but a separate code used to account for the complexity of service when treating a patient with a single serious or chronic condition. It can be billed with POS 02 if all conditions are met.
Tips for Staying Aligned with Payer Requirements
Check every major payer’s updated policy manual at least once every three months. This kind of diligent management service ensures your team is up-to-date on fees and any unique coding rules.
Services Covered Under POS 02
POS 02 can be used across many specialties, provided the service can be safely and effectively delivered via telehealth.
Typical Telehealth Services Included
- Routine Check-ups and Follow-up Visits.
- Mental Health Counseling (e.g., psychotherapy, medication management).
- Specialist Consultations (e.g., dermatology, cardiology reviews).
- Chronic Disease Management check-ins.
Limitations and Exclusions
POS 02 is mostly limited to synchronous interactive audio and video communications. Any services requiring a hands-on physical exam or in-person procedures are generally excluded. Furthermore, purely audio-only services must meet strict CMS exceptions (often using Modifier 93) to be billed under POS 02.
Medicare, Medicaid, and Private Payer Variations
While Medicare sets the framework, Medicaid and private payers often publish their own lists of covered CPT codes and unique modifiers or POS rules. You must confirm coverage for POS 02 with each payer.
Documentation Requirements for Each Service Type
The clinical note must be your proof. Always document the mode of communication (e.g., “video service via secure platform”), the time spent, and, most importantly, the patient’s location (non-home setting) to support the use of POS 02 upon audit.
Best Practices for POS 02 Billing
These best practices are what separate a high-performing billing team from one struggling with denials.
Step-by-Step Guide to Ensure Clean Claims
- Verify Location: Confirm the patient is not at home.
- Select CPT: Choose the correct E/M or procedural code.
- Set POS: Assign 02.
- Apply Modifier: Append Modifier 95 (or payer-specific modifier).
- Audit: Run the claim through your internal validation software before final submission.
How to Cross-Check POS Usage Against Payer Rules
Create a simple internal checklist for your team that lists the top 10 payers you bill, noting their specific POS 02 modifier and reimbursement policies. Keep this list easily accessible on a shared system.
Preventing Common Errors That Lead to Denied Claims
Implement a strict rule: POS 02 requires both Modifier 95 and documentation of a non-home setting. Make this mandatory within your software or billing system.
Using Internal Audits and Checklists for Accuracy
Run a weekly audit of 10 random telehealth claims. Check the POS code, the modifier, and the clinical documentation of the patient’s location. This proactive management prevents minor mistakes from becoming costly trends.
Common Mistakes and How to Avoid Them
Submitting Wrong POS Codes (POS 02 vs POS 10)
This is the most common and expensive mistake. Solution: Create a simple decision tree or quick reference app for your providers on their tablet or phone, asking, “Was the patient at their private residence?” If yes, POS 10. If no, POS 02.
Missing or Incorrect Modifiers
A POS 02 without Modifier 95 is an incomplete claim and will be rejected. Solution: Use a POS system or billing software features that automatically prompt the user to add the required modifier when 02 or 10 is entered.
Misunderstanding Patient Location Requirements
POS 02 is used even if the non-home setting is only temporary (e.g., a worksite or store location). Solution: Focus training on the difference between a home (private residence) and any other non-home setting.
How to Correct Already Submitted Claims
If a claim is denied due to a POS 02 error, file an immediate resubmission or appeal with the corrected code and modifier. Correcting the POS is usually a quick fix, but it needs to be handled promptly to maintain cash flow.
POS 02 and Telehealth Compliance
Ensuring Full Compliance with CMS Guidelines
Compliance is about strictly following the rules. CMS guidelines on POS 02 are clear: the code must accurately reflect the patient’s location to ensure appropriate payment.
How Accurate POS Reporting Affects Audits
Inaccurate POS reporting is a severe red flag during an audit. Auditors look for signs that a practice frequently bills at the higher POS 10 rate when the services should have been at the lower POS 02 rate, which suggests upcoding.
Importance of Maintaining Patient Location Records
Your clinical notes are your legal proof. Always document the patient’s location (e.g., “Patient at Skilled Nursing Facility via video link”) to support the use of POS 02 upon audit.
Staff Training and Provider Education Strategies
Use a specialized service or create a mandatory training plan focused solely on the 02 vs. 10 rule. Test your team quarterly on POS codes and modifiers.
Additional POS Codes to Know
While telehealth uses 02 and 10, your practice needs a working knowledge of these other common POS codes used in medical billing:
- POS 15: Mobile Unit Visits: Used for services provided from a mobile unit or van (like a traveling clinic).
- POS 20: Urgent Care Facility: Used for services in an Urgent Care facility.
- POS 21: Inpatient Hospital: Used when the patient is formally admitted as an inpatient to a hospital.
- POS 23: Emergency Room: Used for services delivered in a hospital Emergency Room (ER).
- POS 24: Ambulatory Surgical Center (ASC): Used for outpatient surgical services provided in an ASC.
Final Thoughts:
Accurate use of POS 02 is essential for any modern business offering telehealth services. It ensures you get the correct, auditable payments for services delivered to patients outside their private residences. By training your team to confidently distinguish POS 02 from POS 10 and pairing it flawlessly with Modifier 95, you protect your revenue cycle and maintain impeccable compliance.
Follow these documentation and billing best practices to turn coding challenges into effortless cash flow and maximize your reimbursement with every claim submitted.
Frequently Asked Questions (FAQs)
What does POS 02 mean?
POS 02 means Telehealth Provided Other than in a Patient’s Home. It’s the code used when a patient is at a clinic, school, or other non-home setting during a virtual visit.
What is the difference between POS 02 and POS 10?
The difference is the patient’s location. POS 02 (Non-Home) pays the lower Facility Rate. POS 10 (Home) pays the higher Non-Facility Rate.
Can multiple POS codes be used on a single claim?
Yes, but only one POS code per line item (service). If two separate services were provided on the same day in two different locations, they would appear on separate claim lines with different POS codes.
What is a place of service code in telehealth?
It is a two-digit code (02 or 10) that specifies the patient’s location during a telehealth encounter, determining reimbursement and compliance.
What is the difference between POS 31 and POS 32?
POS 31 is for a Skilled Nursing Facility (SNF) when the patient is under Medicare Part A coverage (short-term care). POS 32 is for a Nursing Facility (or SNF when Part A coverage is exhausted), typically for long-term care.
Which modifier should be used with POS 02?
Modifier 95 is the standard for synchronous (audio-video) telehealth service with POS 02.
