Health Information Management

Q/A: Billing for ED services when medical necessity is lacking

APCs Insider, June 10, 2011

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Q. When medically necessity for ancillary tests (i.e. laboratory, x-rays) performed in our ED is lacking, should we adjust the charges by removing these services from the claim because we won’t receive payment for them?

A. Medicare requires that all patients be billed in the same manner. This requires that you report all services provided. The Medicare Claims Processing Manual, Chapter 1, §60.4.2, specifies the use of certain modifiers to indicate that a service is not covered. Modifiers –GA (Waiver of liability statement on file), -GY (Item or service statutorily excluded or does not meet the definition of any Medicare benefit), and –GZ (item or service expected to be denied as not reasonable and necessary) experience the highest use in facility billing scenarios.

Due to the nature of the services provided in the ED, coders commonly append modifier GZ in this instance. Modifier -GZ denotes that a patient did not receive an advance beneficiary notice. Reporting this modifier indicates that the provider is aware that the service was provided without documentation to support medical necessity and that the provider bears financial liability. In this situation, submit charges in the claim’s noncovered column.

Providers should review their processes to ensure that they report all appropriate conditions. They also should work with ED physicians and staff to ensure documentation of the medical indication for any test or service. Doing so provides evidence of medical necessity and helps avoid loss of APC reimbursement.

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

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