The Medicare Physician Fee Schedule has values for some CPT® codes that include both a facility and a non-facility fee. The facility fee is typically lower.
When CMS develops the fee schedule, each code has three components: work Relative Value Unit (RVU), practice expense RVU and malpractice expense RVU. When a service is performed in a facility (that is, hospital, ASC, nursing home, etc) the practice expense RVU is lower. This is because the practice does not have the expense for the overhead, staff, equipment and supplies used to perform that service.
The non-facility rate is the payment rate for services performed in the office. This rate is higher because the physician practice does have the overhead expense for performing that service.
When you submit a claim submit your usual fee. The carrier or MAC processes your claim based on the place of service you select. Be careful to select the correct place of service.
Some codes may only be performed in one place or the other: for example, an initial hospital visit has only a facility fee, because it is never performed anywhere but a facility. Office visits, on the other hand, may be done in the office (non-facility) or in the outpatient department (facility.)
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Take a look at the following
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