Understanding the Role of Modifiers in Medical Billing

My goal as a dermatology-billing expert has always been dedicated to providing accurate, up-to-date advice on coding and billing-related processes. One topic (and challenge) that often arises in medical billing, whether in a hospital or other medical facility, is the proper use of modifiers. Understanding the role of modifiers is essential to ensure that accurate insurance claims are generated and proper reimbursement ensues. Failure to use a correct ICD-10 diagnosis code for a claim will result in the claim being denied.

HCPCS Level I Modifiers are two-digit codes that are added to a procedure or Evaluation and Management (e.g., E/M) visit codes to indicate that the service:

1. Was not unbundled per the Correct Coding Initiative (CCI) (e.g., -59).
2. Represented a separate and significantly identifiable service (E/M) visit performed on the same date of service as a procedure (e.g., -25).
3. Indicated the service or procedure was performed in the postoperative time frame (e.g., -24 and -79 respectively).
4. Helped to identify the exact location of a body part (e.g., -F1, -F2).
5. Showed a repeat procedure or service by the same provider (e.g., -76).
6. Showed a staged service indicating the procedure was performed by the same provider (e.g., -58).
7. Changed the way that the procedure or service is reimbursed.

Types of Modifiers

There are two types of modifiers: informational and pricing modifiers.

Informational Modifiers

Informational modifiers are used to provide additional information about a service or procedure that was performed. These modifiers do not affect the way that the service or procedure is reimbursed but frequently help to avoid a denial.   Examples of informational modifiers include:

Pricing Modifiers

Pricing Modifiers are used to indicate that a service or procedure has not been bundled.  It overrides the bundles as published by the CCI.  These modifiers can be used to increase or decrease the reimbursement rate (mostly increase).  Examples of pricing modifiers include:

Understanding Modifier -25

1. Modifier -25 is one of the most commonly used modifiers in dermatology billing.
2. Modifier -25 can only be used if the E/M service is beyond the usual preoperative and postoperative care associated with the procedure.  Additionally, the E/M service must also be medically necessary, properly documented, and performed by the same physician or qualified healthcare professional as the procedure.
3. Modifier -25 can significantly affect the reimbursement rate as it allows the provider to bill for two separate services performed on the same day.  Its proper use helps to avoid billing errors and costly audits.

* Details about each modifier are located in Appendix A of the CPT Manual.

Common Modifier Errors

While modifiers can be an effective tool for accurate billing, there are some common errors to avoid. Here are a few examples:

1. Using the wrong modifier can result in billing errors and potential audits.
2. Using multiple modifiers that are not compatible.  Some modifiers cannot be used together as they contradict each other.  Make sure that the modifiers being used are compatible and accurate.
3. Failing to document the reason for the modifier.   Document the reason for the modifier in the patient’s medical record as failing to do so can result in billing errors and potential audits.

Medicare ABN Specific Modifiers: – GA, GX, GY, GZ

There are appropriate modifiers to use when submitting charges to Medicare, particularly in relation to indicating the presence of an ABN (Advanced Beneficiary Notice) given to the patient. Here are the four key Medicare modifiers we commonly employ:

GA Modifier

Modifier Description: Waiver of Liability Statement Issued as Required by Payer Policy.

The GA modifier signifies that an ABN is on file, granting the provider permission to bill the patient if Medicare does not cover the service. By utilizing this modifier, providers ensure that Medicare automatically assigns beneficiary liability upon denial.

GX Modifier

Modifier Description: Notice of Liability Not Issued, Not Required Under Payer Policy.

The GX modifier is used when there is no need to issue an ABN based on the payer’s policy. It indicates that the provider understands that the service rendered is not covered and is seeking a denial from Medicare for a non-covered service.

GY Modifier

Modifier Description: Item or Service Statutorily Excluded or Does Not Meet the Definition of Any Medicare Benefit.

The GY modifier is applied when a service is explicitly excluded by Medicare or does not meet the definition of any Medicare benefit. This modifier is useful in situations where an ABN may not be required, but it is necessary to indicate that the service falls outside the scope of Medicare coverage.

GZ Modifier

Modifier Description: Item or Service Expected to Be Denied as Not Reasonable and Necessary.

The GZ modifier is used when there was a possibility of requiring an ABN, but one was not obtained. It suggests that the item or service in question is expected to be denied by Medicare due to not meeting the criteria of being reasonable and necessary.

For dermatology practices, keeping up with the ever-changing world of medical billing, documentation, and coding can be a daunting task.  With so many rules, regulations, and requirements to navigate, it is common to overlook some of the nuances that can significantly affect a practice’s revenue. This is where a qualified, dermatology-specific, third-party billing service can be invaluable.

By partnering with the country’s most reputable billing service with a long track record of quality billing, staffed with American employees that are trained and certified coders, and one whose staff is always available during your practice’s normal business hours (no holding or lengthy return call waits), let the Inga Ellzey Billing Companies take the hassle out of coding and billing-related tasks.

The Inga Ellzey Billing Companies is that billing service!  Not only can we help to reduce errors and denials, increase your practice’s revenues, and increase the turnaround time for payments, but we can also free up valuable time and resources that can be better used to focus on patient care.

If you are feeling overwhelmed or unsure about your practice’s billing processes or the effectiveness of your current billing service, we encourage you to reach out to us.  For qualified inquiries, we can also do an evaluation of your present billing entity’s outcomes free of charge.  Our prices are competitive based on various factors such as number of providers, patient volume, payer mix, and services provided.  You cannot beat our prices coupled with the quality of the service provided.  Give us a call!  It might be the best call you ever made for your business!