CMS issues guidance on correct use of “PN” and “PO” modifiers in hospital off-campus provider-based departments

In a recent MedLearn Matters, CMS issued much anticipated guidance instructing hospitals on the correct use of the “PO” and “PN” modifiers when billing for items and services furnished in hospital off-campus provider-based departments (PBDs) beginning January 1, 2017. (For more information about the recent changes affecting hospital off-campus PBDs, please see our publication on the topic.)

Hospitals should use  the new “PN” modifier as follows: Effective January 1, 2017, non-excepted off-campus PBDs of a hospital are required to report the “PN” modifier on each claim line for non-excepted items and services. The use of modifier “PN” will trigger a payment rate under the Medicare Physician Fee Schedule, as we explained in our prior publication. CMS also answered a question that many providers had raised about the “PN” modifier, explaining that it expects the “PN” modifier to be reported with each non-excepted item and service including those for which payment will not be adjusted, such as separately payable drugs, clinical laboratory tests and therapy services. 

Hospitals should use the “PO” modifier” as follows: Excepted off-campus PBDs of a hospital must report modifier “PO” for all excepted items and services furnished. CMS does not expect off-campus PBDs to report both the “PO” and “PN” modifiers on the same claim line. However, if services reported on a particular claim form reflect items and services furnished in both an excepted and a non-excepted hospital off-campus PBD, the “PO” modifier should be used on the excepted claim lines and the “PN” modifier should be used on the non-excepted claim lines.

CMS also clarified in the MedLearn Matters guidance that hospitals should not report either the “PO” or the “PN” modifier for services furnished in a dedicated emergency department or a PBD that is “on the campus” or within 250 yards of the hospital or a remote location of the hospital. These locations are not affected by the recent changes, which affect only off-campus hospital outpatient departments and exclude locations within 250 yards of a remote location.