Modifiers Explained

September 21, 2010

Here’s how to use these code add-ons correctly to help you get paid what you deserve

Melody Irvine couldn’t believe her eyes. A large, established orthopedic practice was submitting claim after claim for E&M visits by its physicians following orthopedic procedures. Payers of all stripes denied the claims because of “unbundling,” attempting to charge for a service already included in the payer’s global period for surgeries and procedures.

The insurance companies never waivered in their denials, but what amazed Irvine even more was that neither did the orthopedists. They continued submitting claim after claim with no chance of getting payment.

“I asked the head of the billing department why she was trying to unbundle those services and what did the CCI edits say about it,” says Irvine, a certified coder and owner of Career Coders, LLC. “This person, who had been in the billing field for 20 years, asked me, ‘What’s a CCI edit?’”

If you don’t know about the National Correct Coding Initiative (NCCI), and you’re not sure if anyone in your billing department does either, then read on. Even if you feel well versed in Current Procedural Terminology (CPT) coding, you may be missing valuable coding opportunities that produce revenue. Often, getting the revenue you truly deserve will require using a code modifier when appropriate.

Modifiers are simple two-character designators that signal a change in how the code for the procedure or service should be applied for the claim. Used correctly, modifiers add accuracy and detail to the record of the encounter. Misused, they can cause denials, payer audits, and worse - investigations, refunds, and fines.

“Modifiers are there so the payer knows that something in how the code was used has been altered in some way,” Irvine says. “Perhaps the physician only did the post-operative portion of the surgery, or maybe they had to do more than one procedure, or an unrelated procedure on the same day with the same patient.”

Going back to Irvine’s orthopedic client, the practice was either trying to get paid for services the payer felt it already had paid for, or the physicians were indeed performing services that were unrelated to the global period’s services. Without the use of a modifier, there’s no way for the payer to tell.

What Irvine and other experts most often see when checking up on their clients’ coding, is that many just forget to use modifiers that are justified. The result is missed revenue that physicians deserve. Here’s a quick primer on how and when to use some of the most frequently misused, underused, or misunderstood CPT modifiers.

Modifier 25

Raemarie Jimenez, director of education for the American Academy of Professional Coders (AAPC), the national coding training and certifying organization, says physicians seem to have the biggest problems with modifiers that affect reimbursement. These modifiers allow a service to be paid when it might otherwise be denied by a payer.

One example is modifier 25. It is designed to obtain payment for an E&M service performed by a physician on the same day the physician provided another procedure or service to the same patient.

“One of the biggest things that always goes wrong is the physician appending it to the procedure instead of the E&M code,” Jimenez says.

A typical modifier 25 scenario might be when an established patient visited her physician’s office for a minor procedure, such as repairing a minor laceration on her right foot. As the physician sutures the wound, the patient complains of new edema on her left leg and ankle. Instead of rescheduling, the physician examines the patient’s left leg and ankle after completing the suturing. If the E&M service included an expanded problem-focused history and exam with medical decision making of low complexity, the physician could code the E&M service as CPT 99213.

But an E&M visit on the same day as a procedure? Expect that one to be denied for payment. However, by adding the modifier 25 to the E&M code and linking each of the services to an appropriate ICD-9-CM diagnosis code, the physician gets paid for both. At the 2010 Medicare national rate, that’s $141.96 for the suture (CPT 12001), plus $66.74 for the 99213 in an outpatient setting.

Another common example is when a patient comes in for a regular office visit and then tells the physician about an additional and unrelated problem, says Wendy Owens-Frierson, billing product manager for Avisena, a billing software firm. If the physician orders an X-ray or a blood test and appends the modifier 25 to the E&M visit, both services will be paid.

“When there’s no modifier 25, the procedure with highest RVUs gets paid and, in this case, the X-ray would just be considered part of the visit and not paid,” Owens-Frierson says.

Medicare and other payers give close scrutiny to documentation when they see modifier 25. Irvine says the safest route is to make sure each service - the procedure and the E&M visit - has sufficient documentation to stand alone and clearly indicate that two distinct services were provided.

Although the CPT manual doesn’t call for it, Irvine suggests there are cases when going the extra step to create distinctly separate notes for the different services is justified. An example is when a preventive exam and an E&M visit are conducted on the same day.

If an established patient comes in for a regular preventive care exam but the physician spots a significant problem - perhaps a breast lump - the additional and separate work related to the lump can be reimbursed by adding modifier 25. To play it safe, Irvine suggests creating separate notes for the two services.

“I find that many private payers respond best when there is a note for the preventative visit and one for the office visit so that it clearly supports the history of present illness, review of systems, past family social history, medical exam, and decision making elements,” she says.

Irvine cautions that you don’t automatically qualify to use modifier 25 every time you do a procedure on the same day as an office visit. For example, if a patient comes in complaining of joint pain and you’ve done joint injections in the past that worked well, there is no separate component of an office visit.

“It gets down to what is the intent of the office visit,” Irvine says. “If it’s just to examine a problematic area needing a procedure, then that’s considered part of the procedure and not billed separately.”

As the CCI manual also explains, “the decision to perform a minor surgery does not warrant the billing of the E&M on its own.” Or as the Office of Inspector General said in a 2005 report, “an E&M service billed using modifier 25 should be significant, identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure.” That report, by the way, also concluded that based on a random sampling of Medicare claims in 2002, about 35 percent of those claims using modifier 25 (that Medicare allowed) were improper.

Unbundling done right

Another modifier that physicians need to know - and which payers keep a close eye on - is modifier 24. It indicates when an E&M service provided to a patient during the postoperative period, by the same physician is actually unrelated to the procedure.

For example, a physician treats a patient for a dislocated shoulder then later provides diabetes counseling - an unrelated service - within the global period of the shoulder procedure. The national Medicare outpatient allowable for CPT 23655 (closed treatment of shoulder dislocation, with manipulation, requiring anesthesia) is $363.94, and the global period is 90 days. For the unrelated office visit about diabetes management, the physician could report CPT 99213 with modifier 24 and receive the Medicare outpatient rate of $66.74. Like modifier 25, it must be applied to the E&M code, the code must be linked to an appropriate ICD-9 diagnosis code, and the documentation must support the service at the level reported.

Another reason to unbundle

Physicians can use modifier 59 to unbundle procedures in some cases. The modifier indicates a procedure that is distinct or independent from other services on the same day. Jimenez says modifier 59 is used when services would normally be bundled, but in fact, the additional procedures are performed at a different site. Additional uses of modifier 59 include procedures for multiple lesions, or different injuries in different locations.

An example of modifier 59 in action is when a patient comes into the office to have several skin tags removed (CPT 11200) from his back, but during the session the physician decides to perform biopsies on two small lesions on the patient’s neck. Jimenez explains that many payers will not consider the biopsies as separate from the skin tag removals unless a modifier tells them so.

“You can bill for both, but append modifier 59 to let the insurance company know that the biopsies were distinctly different and had nothing to do with the skin tag removals,” she says.

The result? By reporting the skin tags ($78.91 for CPT 11200) and adding CPT 11100-59 for the first lesion ($96.98) and CPT 11101 for the second ($31.71), Medicare would reimburse a total of $207.60, which beats $78.91.

Modifier 59 comes in handy for physicians who do procedures where the organ or body part has separate compartments, such as the knee, Jimenez says. The modifier also helps clear up confusion when billing for procedures to the same organ but which may have several techniques. For example, in a colonoscopy a physician might remove one or more polyps with a snare but others with forceps for a biopsy. CPT 45380 indicates a colonoscopy with biopsy for which the Medicare national outpatient rate is $485.86. Add a modifier to be assured of getting paid for the additional CPT 45385–59, which indicates a colonoscopy with removal of polyps or other lesions by snare. Here modifier 59 helps assure an additional $516.22 for the second procedure.

GA modifier

The GA modifier, which is also often misused, doesn’t add revenue but can prevent denials and unpleasant audits or investigations. This Healthcare Common Procedure Coding System (HCPCS) modifier is one that every physician treating Medicare patients should know, says Irvine. It’s used when the physician expects that Medicare will deny the service as not reasonable or necessary. This modifier tells the Medicare carrier that you have obtained a signed advance beneficiary notice (ABN) from the patient for the service.

“One of the biggest problem modifiers I see is the GA modifier,” Irvine says. “The doctors are not getting the ABNs signed, because they are not always aware of what is not a covered Medicare benefit.”

The GA modifier allows a physician to bill a patient directly for a service that Medicare does not pay. Without that modifier, Medicare will advise the patient that the service they received was not medically necessary and they do not have to pay. In other words, you, the physician, will eat that cost in full.

And forget about going back to a patient afterwards to get the ABN signed, Irvine says. “That’s going to be a big red flag. Medicare will think you are trying to pull a fast one.”

You also cannot justify using modifier GA just because the patient once signed an ABN form.

With the GA modifier or any of the many numerical modifiers, the goal is to improve documentation qualify and coding accuracy. Along the way, proper use of modifiers may improve reimbursement, too.

How to stay up-to-date on modifiers

Here are some ways to make sure modifiers are applied when and where they are needed:

• Prepare lists of each physician’s most common procedures that Medicare and other major private insurance companies do not pay for.

• Build payers’ write-off codes into the practice management system for quick reference by business office staff who work denied claims. It will help them check how many charges were written off because a modifier was missing.

• Provide physicians with monthly reports on their claims that were denied or reduced because a modifier was missing or not properly used.

• Include a discussion of modifiers in payer contract negations and seek to include clear definitions in contacts.

• Track “modifier creep” by instructing payment posters to watch for changes in how payers handle and reimburse modifiers.

• Consider the use of contract management software which keeps tabs on remittances and compares them to contracted allowables to assure that payers are living up to contract terms.

Bob Redling is a writer based in Tacoma, Wash. He has been practice management editor for Physicians Practice, Web content editor and senior writer for the Medical Group Management Association, and a speechwriter for the American Academy of Family Physicians. He is currently senior communications manager and new media editor for the Washington State Department of Natural Resources. He can be reached via editor@physicianspractice.com.

This article originally appeared in the October 2010 issue of Physicians Practice.

In Summary

Coding modifiers are add-ons to your CPT codes that signal a change in how a code should be applied. Used appropriately, they can boost your revenue for the encounter. Modifiers that physicians sometimes misuse, or just omit when they could have been used, include:

• 25: Used for a separate, identifiable E&M service on the same day the physician also provided a procedure to the patient.

• 24: Indicates that an E&M service provided to a patient during the postoperative period by the same physician who did the procedure is unrelated to the procedure.

• 59: Indicates a procedure that is distinct or independent from other services performed on the same patient on the same day by the physician; useful when services might normally be bundled.

• GA: Indicates the patient has signed an advance beneficiary notice allowing the physician to bill the patient directly for a service that Medicare is expected to deny as not reasonable and medically necessary.