Healthcare providers, practice managers, and practice owners must actively manage Reason Code M97 Service Location Mismatch. This common denial signals that the payer did not pay the practitioner because of an unapproved Place of Service (POS). Consequently, this error immediately impacts your practice’s professional fee revenue. Therefore, understanding the precise causes of Reason Code M97 Service Location Mismatch and implementing effective solutions is crucial for improving your billing practices.
Why Reason Code M97 Service Location Mismatch Occurs
The Reason Code M97 Service Location Mismatch denial focuses on payment structure differences based on the service location. In many cases, facility fees bundle services when providers perform them in a hospital or clinic setting.
| Common Cause | Explanation | Mitigation Focus |
| Facility Bundling | The POS code indicates a facility setting. Thus, the facility fee bundles the service. Therefore, the payer will not pay the practitioner separately. | Accurate Place of Service Billing clearly distinguishes between facility and non-facility settings. |
| Billed Location Mismatch | The billed place of service does not align with the appropriate, approved location for the practitioner’s services. | Thorough verification of approved POS codes for the specific CPT code and payer. |
| Inpatient Status Conflict | The facility pays for the service while the patient is an inpatient. Specifically, billing for a service that falls under the facility’s financial responsibility triggers M97. | Providers must verify the patient’s current status (inpatient vs. outpatient/observation) before billing. |
| Technical Component Not Allowed | The payer does not allow the service’s technical component at that specific facility type. For example, a payer only pays the professional component in a hospital. | Proper modifier usage (e.g., 26 for professional component) separates the practitioner’s charges. |
| Incorrect Provider Specialty | The provider’s specialty is not appropriate for the POS or procedure code billed. Consequently, the payer deems the service inappropriate for that location. | Practices should regularly review provider credentialing and taxonomy codes against service location rules. |
| Dual Billing | Both the practitioner and the facility bill for the same service. This indicates a communication gap between the provider and the facility. | Maintain clear communication and charge-capture protocols with the facility. |
In essence, the Reason Code M97 Service Location Mismatch demands strict adherence to the payer’s rules about who gets paid where.
7 Actionable Solutions to Mitigate M97 Denials
Eliminating M97 denials requires strong internal controls, proper use of modifiers, and constant vigilance regarding facility rules.
1. Ensure Accurate Place of Service Billing
Staff must ensure the billed place of service (POS) accurately reflects the service location. Providers should train staff on the precise definition of each POS code (e.g., 11 for office, 21 for inpatient hospital).
2. Implement Proper Modifier Usage
Practitioners must use modifiers strategically to separate facility-based services from practitioner-based services. Specifically, use Modifier 26 for the professional component when the facility bills the technical component.
3. Select Correct CPT Codes
Verify that staff use the correct CPT codes for the services rendered. Furthermore, confirm the CPT code is payable in the POS billed. Some codes require location-specific compliance.
4. Adhere to Payer Guidelines
Familiarize your team with and comply with the payer’s specific billing guidelines regarding POS and provider specialties. Payer policies often dictate which professional services facility fees bundle.
5. Leverage Technology and Tools
The billing team must utilize software and tools. These tools should flag known POS/CPT code conflicts automatically before claim submission. This streamlines the billing process and reduces errors.
6. Drive Continuous Improvement and Audits
Practice managers should regularly review billing practices. Train staff on POS code updates. Conduct internal audits proactively to identify and address potential M97 issues.
7. Appeal Unjustified Denials
If a Reason Code M97 Service Location Mismatch denial appears unjustified, immediately appeal it with strong documentation. The appeal must clearly prove the non-facility status of the service or the correct application of a modifier.
Stop Losing Revenue to Reason Code M97 Service Location Mismatch
By understanding the common causes of M97 denials and implementing effective solutions, you significantly reduce your practice’s revenue losses. Claims Med offers comprehensive revenue cycle management services. We help healthcare providers optimize their billing processes and improve their financial performance.
Contact us today to learn more about how we can assist you in addressing M97 denials and maximizing your revenue.
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