The healthcare billing landscape is filled with codes, modifiers, and place of service (POS) identifiers that significantly influence reimbursement. One such code, POS 02, has gained attention with the rise of telehealth. Whether you’re a provider, medical biller, or practice manager, understanding what POS 02 means—and when to use it—is essential for accurate claims submission and proper reimbursement in a modern billing environment.
What is POS 02 in Medical Billing
Understanding the Definition by CMS
POS 02 refers to “Telehealth Provided Other than in Patient’s Home”, as defined by the Centers for Medicare & Medicaid Services (CMS). This POS code is used on claims to indicate that telehealth services were rendered to a patient who was not located in their home at the time of the encounter, and the visit was virtual or remote.
Updates to POS 02 Since 2022
As of January 1, 2022, CMS revised the definition of POS 02 to distinguish between telehealth provided in the home (POS 10) and telehealth provided elsewhere (POS 02). This differentiation was introduced to align better with remote care delivery models and ensure accurate payer reimbursement and compliance under evolving telemedicine rules.
When Should You Use POS 02?
POS 02 Usage in Clinical Settings
Use POS 02 when the telehealth service is delivered remotely by a qualified provider and the patient is not in their home. Common scenarios include:
- The patient is in a healthcare facility, urgent care, or clinic and connects with a remote specialist via secure video conferencing.
- A nurse practitioner is assisting the patient in a community health location, but the primary consultation occurs remotely via a HIPAA-compliant telehealth platform.
- A behavioral health evaluation takes place with the patient located in a school, workplace, or temporary public housing unit, and the clinician joins virtually.
Services Often Billed with POS 02
POS 02 is often used for mental health counseling, dermatology evaluations, chronic care follow-ups, and post-operative assessments, among other remote clinical services that do not require the patient to be at home.
When Should You Not Use POS 02?
Avoid POS 02 for At-Home Telehealth
Avoid using POS 02 if the telehealth visit occurs while the patient is at home. In such cases, POS 10 is more appropriate, especially for services delivered in real-time via video from a private residence or temporary home setting.
Scenarios Where POS 02 is Not Appropriate
Other instances where POS 02 should not be used:
- If the visit is in-person in any capacity, even partially, POS 02 is not applicable and could result in claim rejection.
- If the patient is at a location considered to be their legal or temporary residence, such as a family member’s home, assisted living facility, or personal care home, POS 10 may be the correct designation based on payer policy.
- Additionally, using POS 02 for asynchronous or store-and-forward services is not typically appropriate unless specified by payer guidelines.
Helpful for you: POS 11 vs. POS 22 in Medical Billing
How POS 02 Affects Reimbursement
1. Reimbursement Rates May Vary by POS Code
Many payers, including Medicare, reimburse services differently based on the Place of Service (POS) code submitted. POS 02 typically qualifies for facility rate reimbursement, which is often lower than the non-facility rate applied when services are rendered directly in the patient’s home or office setting. This difference can significantly impact provider reimbursement, especially for high-volume telehealth visits, and affect overall revenue and billing efficiency.
2. Provider Type and Specialty Matter
Reimbursement under POS 02 also depends heavily on the provider’s specialty, credentials, and service scope. For example, psychiatrists, speech-language pathologists, and general practitioners may experience different payer guidelines for virtual care when the patient is not at home. Specialty-specific rules can influence both payment amounts and authorization requirements, making it essential for providers to align their billing with the correct POS code to maximize telehealth reimbursement opportunities.
3. Payer-Specific Guidelines for POS 02
Not all payers treat POS 02 the same way. While Medicare sets the baseline for telehealth billing standards, many private insurers develop unique telehealth reimbursement policies. These may include restrictions on provider types, service frequency, or video platform compliance. Reviewing each payer’s guidelines is crucial for ensuring claims are correctly submitted, modifiers are applied, and reimbursement for remote services outside the home is not delayed or denied due to billing inconsistencies.
4. Impact on Cost-Sharing and Patient Billing
POS 02 usage can influence how patient co-pays, deductibles, and cost-sharing are calculated. Some insurers may classify services differently under POS 02, impacting the patient’s financial responsibility. This can lead to unexpected billing confusion, disputes, or payment delays if practices do not communicate these differences clearly to patients before scheduling a virtual visit.
5. Influence on Audit Risk and Claims Scrutiny
Using the wrong POS code or failing to document patient location accurately during telehealth visits billed with POS 02 can increase the risk of audit or denial. Payers closely monitor telehealth claims to verify that services meet compliance standards, especially when determining whether POS 02 or POS 10 should have been used. Proper usage, supported by documentation, helps reduce compliance risks and improves audit preparedness for all remote healthcare providers.
Best Practices for Using POS 02
1. Confirm Patient Location at Time of Service
Always verify and document the patient’s physical location during the telehealth encounter. This critical detail should be included in the clinical note and must match the POS code submitted on the claim form. Clear documentation not only supports accurate billing but also strengthens compliance in case of an audit or review by Medicare or commercial payers.
2. Stay Updated on CMS and Payer Policies
Billing policies for telehealth, including POS 02, are frequently revised by CMS and private payers. Providers must routinely review CMS transmittals, payer newsletters, and specialty association updates to ensure compliance with current telehealth regulations, especially during annual updates or public health emergency declarations that affect billing practices.
3. Train Billing and Front Desk Staff
Your billing and scheduling teams are the front line in correct POS code application. Regularly educate them on POS 02 vs. POS 10 distinctions, and provide clear reference materials or digital cheat sheets. Staff training helps prevent denials due to POS errors and improves claim acceptance rates across multiple payers and platforms.
4. Use Compatible Modifier Codes with POS 02
Many telehealth services billed under POS 02 require specific modifier codes like 95 or GT. Using the right modifier ensures the claim correctly signals a synchronous telemedicine service to the payer. Proper modifier pairing with POS 02 reduces the chance of rejection, underpayment, or manual claim review delays.
5. Implement Internal Audits and Quality Checks
Regularly auditing your telehealth claims helps catch POS errors and maintains billing accuracy and compliance. Internal audits should review sample claims to confirm that POS 02 is used appropriately, modifiers are included, and documentation supports remote service delivery. A quality check system can prevent costly mistakes and support consistent reimbursements.
POS 02 vs Other POS Codes: What’s the Difference?
| POS Code | Description | Used When… | Reimbursement Consideration |
|---|---|---|---|
| POS 02 | Telehealth provided outside patient’s home | Patient is in clinic, facility, or other venue | Typically reimbursed at facility rate |
| POS 10 | Telehealth provided in patient’s home | Patient is physically at home | Often reimbursed at non-facility (higher) rate |
| POS 11 | Office | In-person visit at a provider’s office | Standard in-person reimbursement, no telehealth used |
| POS 12 | Home | In-person visit at patient’s home | Subject to home visit billing requirements |
| POS 19 | Off-Campus Outpatient Hospital | Services provided at off-campus facility | May require site-of-service adjustment or modifier |
Conclusion
Understanding POS 02 in medical billing helps providers, billing teams, and administrators navigate the evolving world of telehealth with accuracy. When applied correctly, POS 02 reflects the actual service setting and ensures claims are processed efficiently by Medicare and commercial insurers. Whether you’re adapting to hybrid care models or streamlining virtual services, mastering POS 02 is essential for optimized billing and revenue performance in a competitive healthcare landscape.
Frequently Asked Questions (FAQs)
Is POS 02 still valid for Medicare billing in 2025?
Yes, POS 02 remains a recognized and active code by CMS for telehealth services where the patient is not in their home. It is included in current CMS billing guidelines and is applicable for remote services delivered at alternate locations.
Can POS 02 be used with telephone-only visits?
In most cases, no. POS 02 is intended for audio-visual (video) telehealth visits, not audio-only services. Telephone-only visits often require separate CPT codes or modifiers depending on payer-specific rules and telehealth coverage policies.
What’s the difference between POS 02 and POS 10?
POS 02 is used when the patient is not at home during a telehealth session, such as when they’re at a clinic. POS 10 is specifically for sessions conducted while the patient is at home, which may result in different reimbursement rates.
Are modifiers required with POS 02?
Yes, in many cases, you must use telehealth-specific modifiers such as 95 or GT, depending on payer guidelines. These modifiers help clarify that the service was delivered via telehealth and assist in smoother claims processing.
What happens if I use the wrong POS code?
Incorrect POS code usage can result in denied claims, underpayment, compliance audits, or even clawbacks from payers. Using accurate codes like POS 02 ensures clean claim submissions and better financial performance for your practice.
