Reporting CMS' modifiers related to Advance Beneficiary Notifications

CMS' coding modifiers are not always used to report clinical components of a service. Sometimes they can be used in order to provide information about how a service relates to Medicare coverage policies.

Modifier -GA is used to indicate that a waiver of liability statement that is required by the payer is on file.

Modifier -GX is used to describe a voluntary waiver of liability.

Use -GY to describe an item or service that is statutorily excluded or that does not meet the definition of any Medicare benefit.

Use -GZ to describe an item or service expected to be denied as not reasonable and necessary.

Background information on Advance Beneficiary Notifications

An Advance Beneficiary Notice (ABN) is a notice that the provider must provide to a Medicare beneficiary before providing certain items or services. You must issue the ABN when all of the following apply:

• You believe Medicare may not pay for an item or service
• Medicare usually covers the item or service
• Medicare may not consider the item or service medically reasonable and necessary for this patient in this particular instance

ABNs are issued only to those patients who are enrolled in Original (Fee-for-Service) Medicare. These documents allow beneficiaries to make informed decisions about whether to receive services and to accept financial responsibility for those services if Medicare does not pay for them. The ABN serves as proof that the beneficiary knew prior to receiving the service that Medicare might not pay for it.

You may also use the ABN as a voluntary notice to alert patients of their financial liability prior to providing care that Medicare never covers. An ABN is not required to bill a patient for an item or service that is not a Medicare benefit and is never covered.

Medicare prohibits routine issuing of ABNs. There must be a reasonable basis for noncoverage associated with the issuance of an ABN. As long as proper evidence supports each ABN use, you will not be violating the routine notice prohibition.

There are exceptions to this rule, however. ABNs may be routinely issued in the following circumstances:

• Experimental items and services
• Items and services with frequency limitations for coverage
• Medical equipment and supplies denied because the supplies had no supplier number or the supplier made an unsolicited telephone contact
• Services that are always denied for medical necessity

Application of modifier -GA

Medicare limits coverage of certain items and services by the diagnosis. If the diagnosis on the claim is not one Medicare covers for the item or service, Medicare will deny the claim.

An ABN must be issued prior to furnishing a usually covered item or service when the diagnosis doesn't support medical necessity.

Modifier -GA indicates that the provider expected the item or service to be denied as not reasonable and necessary and provided the patient with an ABN. This modifier is used for the "medical necessity" denials where a procedure, service, or supply would be covered under the circumstances that the payer has designated as covered.

For example, a patient is having an EKG performed, but the signs/symptoms/diagnoses do not fall under the coverage criteria; therefore, it is expected that the service will be denied due to medical necessity. The provider would make the patient aware of this?prior to performing the EKG?and ask that he or she sign the waiver of liability (ABN).

Medicare coverage policies

Medicare may limit coverage for services based on either National Coverage Determinations (NCD) or Local Coverage Determinations (LCD). Providers are expected to be familiar with both current NCDs and LCDs. They are all listed on the CMS website, with links to the local Medicare Administrator Contractors' LCDs. NCDs describe whether Medicare pays for specific medical items, services, treatment procedures, or technologies. In the absence of an NCD, LCDs indicate which items and services Medicare considers reasonable, medically necessary, and appropriate.

Medicare frequency limitations

Some Medicare-covered services are subject to frequency limitations. A frequency limit means that Medicare will pay for only a certain quantity of a specific item or service in a given time period for a particular diagnosis. If you believe that an item or service may exceed frequency limitations, you must issue an ABN prior to providing the item or service.

Application of modifier -GX

Modifier -GX may be used when a service is statutorily excluded from coverage but the hospital wants to advise the patient of his or her financial responsibilities before rendering the service. Note that this is not a mandatory modifier, as there is no requirement to notify patients of payment obligations for services that are statutorily excluded from coverage. Medicare beneficiaries are expected to be aware of those services that are statutorily excluded from payment.

For example, a patient is having a cosmetic procedure performed. The provider could make the patient aware of the fact that this procedure is not considered medically necessary and ask that they sign an ABN; however, the provider is not obligated to have the patient sign the ABN because he or she should be aware of his or her benefits under Medicare.

Application of modifier -GY

Modifier -GY is used for so-called "statutory exclusions" or "categorical exclusions" and for technical denials. There are no ABN requirements for statutory exclusions or technical denials (except for denials for three types of durable medical equipment: prosthetics, orthotics, and supplies [DMEPOS]). This modifier differs from -GX in that for -GX modifier, the hospital has obtained a signed ABN from the patient. For modifier -GY, there is no signed ABN.

Application of modifier -GZ

This modifier identifies an item or service expected to be denied as not reasonable and necessary when the beneficiary did not sign an ABN. This modifier is used for so-called "medical necessity" denials. The -GZ modifier is available for providers when they know that an ABN should have been signed but was not and when they do not want to risk any allegation of fraud or abuse for claiming services that are not medically necessary.

By using the -GZ modifier, the provider notifies Medicare that he or she expects that Medicare will not cover the service, and the provider wants to reduce the risk of a mistaken allegation of fraud or abuse.

Editor's note: This article is an excerpt from the HCPro book "JustCoding's Guide to Modifiers: Hospital Outpatient Edition" by Susan E. Garrison, CHCA, CHCAS, CCS-P, CHC, PCS, FCS, CPAR, CPC, CPC-H. For more information, or to order a copy, see www.hcmarketplace.com.