Hello!
This week, several therapists in my NC networking groups told me their telehealth reimbursements dropped suddenly. A few months ago, similar reports came from Midwest states.
The likely culprit is Place of Service (POS) codes, the 2-digit codes on your claim CMS 1500 in Box 24 b that tell the payer where the session took place.
For telehealth, there are two that matter:
POS 10: Telehealth provided in the patient’s home (which is a location other than a hospital or other facility where the patient receives care in a private residence)
POS 02: Telehealth provided other than in the patient's home.
CMS (Centers for Medicare and Medicaid Services) redefined these codes in 2022. In 2024, CMS began paying POS 02 at the lower facility rate while POS 10 pays at the higher non-facility rate.
Commercial payers (such as BCBS in NC and a few Midwest states) have slowly been making the same switch. Some solo and group private practice owners missed the updates on these changes… hence the panic in the networking groups.
BCBS of NC announced in their email newsletter in August 2026, that effective 10/1/2026 they would start paying telehealth services with POS code 02 at the lower facility rate instead of the prior non-facility rate.
If you’ve been providing office based mental health services as LPC, LMHC, LMFT, LCSW, LP in a solo group or private practice setting, then it’s likely that you are not a facility (hospital or PHP). If you’ve been billing POS 02 for sessions when a client is not at home… but they are also not in a facility… then you may now be paid less than you expect and you need to do some extra research on this!
So, which POS should you use when a client is not in their actual house, but in their home setting, such as their car, their office at work, or in a park?
As always, insurance companies don’t seem to make this very clear… especially when it could mean paying out at a higher rate. CMS has clarified that home is “a location other than hospital or other facility where the patient receives care in a private residence”. One of the Medicare Administrative Contractor’s stated that “CMS has clearly indicated that POS 10 is used when the patient is not in a hospital or other facility where a patient receives care. If the patient receives the telehealth service from a location that is not a facility they would normally receive care, such as their car or work, then POS 10 would be appropriate based on this description provided by CMS in the final rule.”
Is this confusing yet?!?
Yes, but it is important to understand the difference between how facility vs non-facility settings are different and how the difference affects the change of reimbursement for the POS. Read the full blog for more explanation on this.
This difference is why the MAC guidance above stretches “home” further than the CMS definition. CMS says “home” is a private residence, but this MAC as well as other billing experts (see sources links in the blog), read POS 10 to apply to private locations that aren’t a facility, including a car or a private workplace.
The vagueness of the CMS definitions and lack of clear guidance from insurance companies is why you need to check your own contracts rather than assume one universal answer.
Most insurance companies follow CMS guidelines, but they don’t always make the changes quickly! When I heard about this happening in North Carolina to my colleagues, I decided to write this newsletter and blog to help therapists understand POS codes and bring attention to the fact that they need to look at their respective contracts to ensure they are being paid appropriately for the services they provide.
What to do this week:
1. Check your payer contracts and provider manuals for telehealth POS guidance. Call them if this is not clear regarding which POS code you should use.
2. Compare recent telehealth remittances to what you expected to be paid.
3. Read payer announcements… even the boring ones!
4. Check your EHR billing settings and configure if needed.
For the full breakdown, including the history behind the codes, the reasoning behind the rate differences, and sources read the full blog post.
Want help making sure your settings are correct?
Book a 1:1 Consult. I’ll walk you through configuring your EHR payer and claim settings for smoother processing.
Office hours will be here soon! I’m launching a monthly group video call to talk through news like this and troubleshoot issues together. Look out for an email announcement with more information on how to join!
I’m not a billing expert or attorney. This is general information, not billing advice. Always follow your payer contracts and guidance. Consult a qualified billing professional for your situation.
Stay practical!
P.S. Want to swap notes on this stuff in real time? Come hang out in my Private Practice Cents Facebook group, where private practice owners talk through the ins and outs of running a private practice!
