Currentpriority healthPolicy N/A

Provider-based billing

Defines Priority Health guidelines for billing and reimbursement when services are rendered in provider-based outpatient hospital departments (including off-campus locations) and describes how commercial, Medicare, and Medicaid billing rules are applied and when facility fees will not be separately reimbursed. Affects providers and facilities submitting professional and facility claims to Priority Health.

Policy Summary

Payerpriority health

PolicyProvider-based billing

Policy CodePolicy N/A

Change TypeCommercial-only scopecoding and modifier clarifications

Effective DateJun 1, 2024

Next Review DateFeb 1, 2025

Key ActionEnsure facility claim lines include PO or PN modifiers for off‑campus provider-based departments and report corresponding professional claims with the correct POS to avoid denials or rate adjustments.

SourceLink

POLICY UPDATE CHANGES

This policy now only applies to commercial products; Medicare and Medicaid follow CMS and MDHHS guidelines respectively.

Removed definition of Excepted provider-based departments (PBD) and Non-excepted PBDs.

Added 'Disclaimer' section clarifying policy precedence and recoupment rights.

Added modifier CG to provider-based billing modifiers list.

2024-06-01effective

No separate facility feecommercial stance

11,19,22

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Coverage Criteria and Product-specific Rules

Commercial coverage rules

Covered when ALL of the following apply for commercial products (effective June 1, 2024):

Priority Health will not separately reimburse a clinic fee or any other facility fee billed on a UB04 (facility) claim for services (E/M, procedures, etc.) for commercial plans.

Providers must select the appropriate place of service (POS) when billing professional claims; reimbursement is determined by POS (non-facility vs facility rates).

Applicable POS codes: POS 11 (office — reimbursed at PFS non-facility, includes practice expense), POS 19 (off-campus outpatient hospital — reimbursed at PFS facility rate), POS 22 (on-campus outpatient hospital — reimbursed at PFS facility rate).

Claims meeting any of the following conditions may be denied: type of bill 013X; revenue codes 0510-0519; or inaccurate location/modifier data that misrepresents facility/service location.

Providers are responsible for determining the appropriate way to bill for professional services in their practice setting and ensuring practice setting rules/guidelines are met for commercial plans.

Government program guidance

Guidance for government programs and alignment with CMS/MDHHS:

Priority Health follows traditional Medicare guidelines for provider-based billing as outlined in the CMS Claims Processing Manual and MLN Matters.

MDHHS (Medicaid) aligns as closely as possible with Medicare for hospital clinic/provider-based status determination; clinic services must satisfy Medicare requirements for provider-based status.

MDHHS follows CMS protocol for PO and PN modifier determination; claim lines with PO or PN modifiers will result in a payment reduction applied to the OPPS rate.

Place of Service, Modifiers, and Coding Requirements

POS and provider-based modifiersmixed

POS 11	Office — reimbursed at PFS non-facility (includes practice expense)
POS 19	Off-campus outpatient hospital — reimbursed at PFS facility rate (no practice expense)
POS 22	On-campus outpatient hospital — reimbursed at PFS facility rate (no practice expense)
Modifier PO	Excepted service provided at an off-campus, outpatient, provider-based department of a hospital
Modifier PN	Nonexcepted service provided at an off-campus, outpatient, provider-based department of a hospital
Modifier CG	Policy criteria applied — report when PBD is on-campus or within 250 yards of hospital

Modifier presence requirement — PO/PN on off-campus HCPCS lines

RequirementOff-campus provider claim lines that contain a HCPCS must include either modifier PO or PN on the facility (institutional) claim.

Consequence of omissionAbsence of PO or PN on applicable off-campus HCPCS lines may trigger claim denials or rate reductions as outlined by CMS/MDHHS.

Related data errorsClaims where the service facility address does not match the provider practice file address can generate denials.

Reference guidanceSee CMS SE18002 for examples where PO or PN omission with reported off-campus practice locations may lead to denials.

Provider Requirements, Authorizations, and Claim Submission

Documentation Required

Authorization and documentation note

Obtain and document any required prior authorizations and ensure clinical documentation supports billed services; note that an authorization does not guarantee payment if billing, coding, or policy requirements are not met.

Billing Rule

Claim submission and modifier requirements

Ensure facility (institutional) claim lines for off‑campus provider‑based departments that contain a HCPCS include the appropriate PO or PN modifier, and report corresponding professional claims with the appropriate POS (e.g., 19); inaccurate service location or missing modifiers may trigger denials or rate adjustments.

Off‑campus claim lines with a HCPCS must have PO or PN reported; absence can trigger denials or CMS‑specified rate reductions.

Definitions and Modifier Descriptions

Provider-based billing — definition

DefinitionProvider-based billing is the billing process for services rendered in an outpatient department of a hospital (including off‑campus facilities), typically resulting in a professional claim for physician services and a facility (institutional) claim for overhead and technical costs.

Typical claims submittedBoth a professional claim and a facility claim are typically submitted when services are rendered in a provider‑based outpatient department.

Commercial plan stancePriority Health recognizes provider-based billing but will not separately reimburse some facility services for commercial plans (effective June 1, 2024).

Facility designation noteA provider-based facility must meet CMS criteria to attain provider-based designation; CMS methodology allows reporting of facility costs (overhead, staffing, technical resources).

PO, PN, CG modifiers — descriptions and usage guidance