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Q/A: Automatic denials with modifier -GZ

APCs Weekly Monitor, February 18, 2011

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Q: Our MAC denied line items with modifier -GZ (Item or service expected to be denied as not reasonable and necessary;No signed ABN on file)automatically for awhile and then stopped “pending further review” of the modifier’s use. Do you have any new information regarding this?

A: Yes. CMS issued updates in Transmittal 366 (CR7228) and Transmittal 2148 (CR7228) that address claims processing for line items modified with –GZ. CMS expects providers to understand coverage policies and issue ABNs when a service is not medically necessary. In these transmittals, CMS also excludes these line items from complex medical review by Medicare contractors. CMS expects that when reporting this modifier, providers have exercised due diligence to review coverage policies and issue ABNs accordingly. However, it also recognizes that on occasion, this does not occur.

In Transmittal 366, CMS states that the “GZ modifier indicates that an ABN was not issued to the beneficiary and signifies that the provider expects denial due to a lack of medical necessity based on an informed knowledge of Medicare policy.”

The Medicare Claims Processing Manual, Pub. 100-04, Chapter 23, section 20.9.1.1, Part E, states: “The GZ modifier must be used when physicians, practitioners, or suppliers want to indicate that they expect that Medicare will deny an item or service as not reasonable and necessary and they have not had an Advance Beneficiary Notification (ABN) signed by the beneficiary.”

Effective July 1, 2011, CMS will implement an automated edit to deny all line items that include modifier -GZ for Part A and Part B claims.

Editor’s note: Denise Williams, RN, CPC-H, Director of Revenue Integrity Services at Health Revenue Assurance Associates, Inc., in Plantation, FL, answered this question.

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