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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101.The rules say that as a covered entity, Medicare must use the place of service (POS) codes from the National POS code set for processing its electronically submitted claims. Medicare must also recognize as valid POS codes from the POS code set when these codes appear on such a claim. The place of service (POS) codefor "Outpatient Hospital" has been expanded. The description of POS 22 has been revised from "Outpatient Hospital" to "On Campus-Outpatient Hospital" and POS 19 has been created for the "Off Campus-Outpatient Hospital" setting. Throughout this Internet Only Manual (IOM) you may find references to "Outpatient Hospital" that do not differentiate between the "On Campus" or "Off Campus" setting; however, any reference to POS 22 (formerly "Outpatient Hospital") found anywhere within the IOM is now defined as "On Campus-Outpatient Hospital." In addition, POS 19 will also apply in the majority of situations describing an outpatient hospital setting.  When a physician/practitioner furnishes services to an outpatient of a hospital, payment is made under the PFS at the facility rate. Physicians/practitioners who furnish services to a hospital outpatient, including in a hospital outpatient department (including in a provider-based department of that hospital) or under arrangement to a hospital shall, at a minimum, report the off campus-outpatient hospital POS code 19 or on campus-outpatient hospital POS code 22 irrespective of the setting where the patient actually receives the face-to-face encounter. In other words, reporting the outpatient hospital POS code 19 or 22 is a minimum requirement for purposes of triggering the facility payment amount under the PFS when services are provided to a registered outpatient. If the physician/practitioner is aware of the exact setting where the beneficiary is a registered hospital outpatient, the appropriate outpatient facility POS code may be reported consistent with the code list annotated in this section (instead of POS 19 or 22).For example, physicians/practitioners may use POS code 23 for services furnishedto a patient registered in the emergency room, POS 24 for patients registered in an ambulatory surgical center, and POS 56 for patients registered in a psychiatric residential treatment center.For purposes of payment under the Medicare Physician Fee Schedule (MPFS), the POS code is generally used to reflect the actual setting where the beneficiary receives the face-to-face service.  For example, if the physician's face-to-face encounter with a patient occurs in the office, the correct POS code on the claim, in general, reflects the 2-digit POS code 11 for office.  In these instances, the 2-digit POS code (Item 24B on the claim Form CMS-1500) will match the address and ZIP entered in the service location (Item 32 on the 1500 Form) -the physical/geographical location of the physician.  However, there are two exceptions to this general rule -these are for a service rendered to a patient who is a registered inpatient or an outpatient of a hospital.  In these cases, the correct POS code --regardless of where the face-to-face service occurs --is that of the appropriate inpatient POS code (at a minimum POS code 21) or that of the appropriate outpatient hospital POS code (at a minimum POS code 19 or 22, for outpatient services performed off campus or on campus) as discussed in section 10.5 of this chapter.  So, if in the above example, the patient seen in the physician's office is actually an inpatient of the hospital, POS code 21, for inpatient hospital, is correct.  In this example, the POS code reflects a different setting than the address and ZIP code of the practice location (the physician's office). If placeof service is inconsistent with procedure code billed, then edit for consistency or compatibility between the place of service and site-specific procedure codes.  If the place of service is valid but inconsistent or incompatible with the procedure billed (e.g., the place of service is inpatient hospital and the procedure code billed is office visit), then return services as unprocessable since the MAC typically will not knowwhether the procedure code or the place of service is incorrect in such instances.  If place of service is invalid, then edit for the validity of the place of service coding.  If the place of service code is not valid (e.g., the number designation has notbeen assigned or defined by CMS), then return services as unprocessable. You can find this information in the Medicare Claims Processing Manual, Chapter 26 -Completing and Processing.If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.