Communicating with payers using modifiers

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, April 1, 2023

Academy coding staff address important coding topics each month in DermWorld Coding Consult. Read more Derm Coding Consult articles.

Q: What are modifiers?

A: Modifiers consist of two-digit numeric or alpha-numeric characters that provide a means for dermatologists and non-physician clinicians (NPCs) to report or indicate that a service/procedure they performed on a patient was altered by a specific circumstance(s) without changing the code or its definition. Circumstances that dictate the use of a modifier can be triggered by:

• How/when a service was provided (e.g., multiple procedures performed during the same session/encounter);

• When an encounter/service is an exception to payment guidelines or service limitations (e.g., an unrelated service during the global period); and/or

• When a service/procedure is performed to a specific anatomic site(s).

Modifiers also allow dermatologists/NPCs to effectively respond to payment policy requirements established by payers and other entities that may be responsible for claim adjudication and reimbursement.

Appropriate use of modifiers

It is important to note that incorrect use of Medicare National Correct Coding Initiative (NCCI) edits modifiers can result in claim denials and trigger claim audits. Dermatologists/NPCs should only append modifiers to HCPCS/CPT codes if the clinical circumstances justify the use of the modifier. Modifiers should not be used as a means to bypass a procedure-to-procedure (PTP) code pair edit or MUE if the clinical circumstances do not justify the use of the modifier.

The correct use of modifiers will result in efficient and timely claim adjudication with the appropriate payment. Dermatologists/NPCs can append modifiers to appropriately bypass payer edits (under the appropriate circumstances) and/or indicate that the service is being provided during the global period.

National Correct Coding Initiative (NCCI) edits

CMS developed the NCCI to help ensure correct coding methods were followed when multiple procedures/services are provided to the same patient on the same date of service by the same or multiple clinicians. Appropriate use of the NCCI edits can avoid inappropriate payments for Medicare Part B claims.

Note: Private payers have also adopted the guidelines provided for use of the NCCI edits to ensure appropriate claim adjudication.

Failing to check NCCI edits when reporting multiple procedure/service codes can result in claim denial. Claim denials are triggered by automated prepayment edits that have been created by analyzing every code pair billed for the same patient on the same service date by the same clinician to see if an edit exists in the NCCI. If an NCCI edit exists, one of the codes reported on the claim is denied.

NCCI edits also typically provide a list of CPT modifiers available that may be used to override the denial. In certain cases, clear direction is stated that no modifier may be used to override the denial. For example, a lesion is excised and a simple repair is performed to close the defect on the same date of service. Upon reviewing the coding guidance in the CPT coding manual, it states that simple repairs are included in the excision codes and cannot be separately reported. In this instance, no modifier will or can bypass this edit to get the repair paid as a separate procedure. However, if the repair was performed on a different site from where the lesion was removed, it is appropriate to bill for both and append a modifier 59 to communicate with the payer that the procedure (repair) was indeed separate from the excision.

Which code gets the modifier?


Types of modifiers

• Level I: Global surgery modifiers (22, 24, 25, 50, 57, 59, 78, 79, etc.)

These two-digit numeric modifiers are considered payment modifiers and are appended to both evaluation and management (E/M) services as well as CPT procedure codes, as needed. These modifiers are reported to indicate that a billed service is not part of a global surgical package and is eligible for separate reimbursement.

• Level II: Informational modifiers (LT, RT, GA, GX, etc.)

These two-digit alpha-numeric modifiers are considered informational modifiers and can be appended only to procedural codes to provide additional detail on the location or the timing of the procedure performed. These modifiers allow the dermatologist/NPC to provide information to the payer regarding the circumstances related to the location at which the procedure was performed or patient knowledge regarding the charges and payment responsibilities thereof.

The following list, while not all inclusive, includes a few examples of some of the informational modifiers. A complete list of modifiers can be reviewed in the Academy Coding and Billing Manual.

Frequently misused modifiers

The following modifiers are frequently misused. These modifiers are also known in the health care claim and adjudication system as "audit triggers" — meaning, continued misuse can put a dermatology practice/facility at risk of inappropriate reimbursement, trigger payer claim audits, and unnecessary reviews of medical records. When these modifiers are reported, it is important that the dermatologist/NPC succinctly documents the circumstances that support the use of the modifier (e.g., procedure took longer to complete because of the patient’s excessive bleeding (modifier 22), or the E/M service was provided within the global period of another procedure that is not related to the condition being treated today (modifier 24) — in this instance, the ICD-10-CM diagnosis code must either be different or support the condition is unrelated to the original condition treated using surgery to which the global period applies).

Examples of frequently misused modifiers

Accurate coding and billing can result in proper modifier use and reimbursement

Payment for services rendered to dermatology patients relies mostly on federal (CMS) and third-party (commercial health insurance) payers. When the federal government covers items or services rendered to Medicare and Medicaid beneficiaries, federal fraud and abuse laws apply. Many states have also adopted similar laws that apply to the provision of care under state-financed programs and private-pay patients. Consequently, the issues discussed in this article may apply to the adjudication of all claims submitted to the payer for adjudication.

Payers trust dermatologists/NPCs to provide necessary, cost-effective, and quality care and append the appropriate modifiers to describe the circumstances under which a service was provided. That is why it is important to clearly document and describe the service rendered in the medical record because your documentation serves as the basis for claims submitted to insurers for reimbursement.

Appending modifiers to a claim in order to bypass payer audits will result in claim denial and if frequently done, can be categorized as abuse and/or fraudulent billing.

Dermatologists/NPCs must always maintain accurate and complete medical records and documentation for the services they provide to their patients. Further, claims submitted for payment must always be supported by medical record documentation that succinctly describes the service provided.

Most dermatology practices have or will receive, from time to time, requests from payers to review patients’ medical records to ensure the documentation supports the claim previously paid. This is because payers (CMS as well as third-party payers) believe that good documentation practice helps ensure that your patients receive appropriate care from you and other clinicians who may rely on your records for patients’ past medical histories as well as describe the service provided.

To avoid post-payment medical review for E/M services that could result in payment recoupment, CMS has developed Documentation Guidelines for Evaluation and Management Services.

It is also important that dermatology practices continuously review and understand payer rules and regulations that dictate the use of modifiers to ensure appropriate reimbursement. First and foremost, know the payer for the service rendered, review payer coverage policies regularly, and stay informed through payer-provider communications — listserv, bulletins, seminars, and professional specialty organizations.

More coding guidance and resources can be viewed on the AADA Coding Resource center.

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