Medical claims billed from a Pharmacy - POS Code

[Ross]

Hello All,

I work at a pharmacy and we are engaging in medical claims billing for certain drugs that are being covered by many insurances under the medical benefit.

My question is regarding the appropriate Place of Service (POS) code to report in box 24b of the CMS 1500 claim form for the following scenario:

We, the Pharmacy, are dispensing and shipping a drug to the ordering doctor's office. The ordering doctor is then administering the drug to the patient. We, the pharmacy, are billing the insurance for the drug using the appropriate HCPCS code.

Would we, the pharmacy, bill with a place of service code 01 (pharmacy) since we as the pharmacy are the entity dispensing the drug and billing the insurance for the product? Or would we report 11 (Doctor's office) since the patient is actually receiving the drug in the office setting. Note that we are not billing for the administration of the drug in this scenario (CPT code), we leave that to the doctor's office to bill at their discretion.

Thanks

[Michele]

That is a good question.  I'm not sure.  My first thought is that you would bill 01 since you, the pharmacy are dispensing the drug to the doctor's office from the pharmacy.  But since you are billing the patient's insurance I could see where you would consider 11 since the patient is receiving the drug in the office.  Honestly I think some insurance carriers may require it one way while others may require the other way.  IMO I would go with 01 since you are dispensing the drug from the pharmacy.  You are not involved with the actions taken at the doctor's office.

[Ross]

Thanks very much for your insight! That is what I was leaning towards but researching more about proper use and definition of service codes caused me to start to question.

One other question that your answer raises though: Are you saying that it might be appropriate for us as the pharmacy to bill, in this scenario, with place of service code 11 depending on the requirements of the insurance?

The reason I ask is that we are running across many situations where the insurance will only cover the drug if the place of service is in the office or a hospital setting. Thus far we have been interpreting this requirement to mean that the ordering doctor has to purchase the drug from us and bill it themselves, a situation that both we and the doctors want to avoid. However if it were appropriate for us as a pharmacy to bill with POS code 11, in situations where the drug is being administered in an office setting, that could be a solution to this problem.

[Michele]

Hmmmm......I'm not sure if it would be appropriate or not.   You being a pharmacy and dispensing the drug to the doctor, seems logical you would use the 01 place of service.  If they do not allow for it other than with POS 11 I would be afraid that you, the pharmacy using 11 would be incorrect since you are using it simply because that is how the drug is covered.  Since you are not dispensing to the patient in the office I do not think it would be appropriate to use the 11.

BUT, I would contact at least one of the insurance carriers to inquire as to if that is truly the case.  Do they not reimburse if the pharmacy dispenses it and bills using POS 01. 

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