In simple words: This code indicates that the service you received at a hospital-owned clinic that is not located on the main hospital campus is billed differently by Medicare and may result in a different out-of-pocket expense for you.

This modifier is used to identify non-excepted items and services provided at an off-campus, outpatient, provider-based department of a hospital, which are billed under the Medicare Physician Fee Schedule (MPFS).These services are generally reimbursed at a lower rate than services provided in the main hospital setting. The PN modifier is reported on each claim line with the relevant HCPCS code.

Example 1: A patient receives an X-ray at a hospital-owned outpatient clinic that is not on the hospital's main campus. The clinic is considered a non-excepted off-campus provider-based department. The X-ray service would be billed with the appropriate HCPCS code along with modifier PN., A patient undergoes a minor surgical procedure at a hospital-owned ambulatory surgery center that is located off-campus and considered non-excepted. The surgical procedure code is billed with modifier PN., A patient receives physical therapy services at a hospital-owned rehabilitation clinic that is off-campus and considered non-excepted. The therapy service is billed with the appropriate HCPCS code and modifier PN.

Documentation should clearly indicate that the service was provided at a non-excepted, off-campus, provider-based department of the hospital.The location of the service should be clearly stated in the medical record.