Corporate Compliance

Modifiers and medical necessity

Compliance Monitor, March 11, 2005

A: First, let's clarify your three modifiers:

  • GA: waiver of liability on file
  • GY: item or service statutorily excluded or does not meet the definition of any Medicare benefit
  • GZ: item or service expected to be denied as not reasonable or necessary

GA, GY, and GZ can be used on the UB-92 when submitting outpatient PPS (OPPS) claims. However, condition and occurrence codes usually take precedence over these modifiers for claims billed in this format.

Condition code 20 is used when Medicare may not cover a service and the beneficiary requests submission of the claim. In this instance, a facility may submit a claim with both covered and noncovered charges. This condition code is appropriate when a home health advance beneficiary notice (ABN) is signed or a hospital or skilled nursing notice of noncoverage is provided to the beneficiary. This condition code is not used when the patient has signed one of the CMS-R-131 ABN forms.

Condition code 21 indicates that all services on the claim are noncovered and that the claim was filed in order to obtain a formal denial for purposes of billing a supplemental insurer. Condition code 21 is not used when the patient has signed an ABN.

Occurrence code 32 signifies that the beneficiary signed an ABN on a specific date. Only list services for which an ABN has been presented and signed on the claim form with occurrence code 32. Other services should be reported on a separate claim. Condition codes 20 and 21 are not utilized with occurrence code 32.

The -GA modifier is used on the UB-92 under certain circumstances. If one service that requires an ABN and one that does not are provided during the same time period, a single claim is submitted for the overlapping period using occurrence code 32. This indicates all services as covered except for those with the -GA appended to the procedure code(s) identifying services for which an ABN was obtained. The -GA modifier is used when billing periods cannot be separated.

-GY and -GZ are still relatively new and confusing:

  • -GY and -GZ were introduced in 2002 for utilization on claims billed on the HCFA 1500 format. In 2003, CMS added -GA, -GY, and -GZ to the approved list of modifiers for OPPS reporting.
  • -GY is optional and can be appended to the code for an item or service that is never covered by Medicare. This modifier can be helpful in speeding the rejection of a claim so the claim can be forwarded to a secondary payer.
  • -GZ is also optional. This modifier can be appended to the code for an item or service for which an ABN was not obtained and the provider believes the service will be denied.

According to CMS, use of these optional modifiers greatly reduces the risk of mistaken allegations of fraud and abuse.

This question was answered by Stacie L. Buck, RHIA, LHRM, president of Health Information Management Associates, Inc., www.himassociates.net, and Barbara Aubry, RN, CPC, CHCQM, utilization analyst at Holy Name Hospital, Teaneck, NJ.

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