Health Information Management

Tip: Understand OIG’s scrutiny of modifier -59

APCs Insider, November 21, 2014

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In 2005, the Office of Inspector General (OIG) released a report studying the modifier's application, "Use of Modifier -59 to Bypass Medicare's National Correct Coding Initiative Edits." OIG found that 40% of code pairs billed with modifier -59 (distinct procedural service) in 2003 did not meet program requirements, leading to $59 million in improper payments. Most of the errors were due to services that were not distinct from each other or not documented sufficiently.
As a result of the study, OIG recommended that carriers perform pre- and post-payment reviews of modifier -59 use, as well as update their claims processing systems to ensure they bill the modifier with the correct code in a pair.
Since then, the OIG has continued to study modifier -59 and make recommendations to CMS on how to ensure providers use it correctly. CMS continued to offer guidance on its use, and indicated to OIG in December 2009 that it would explore development of a system edit for modifier -59. However, CMS abandoned this route after determining that an edit for modifier -59 would result in increased appeals volume.
Over the next several years, CMS continued to indicate to OIG that it would explore alternatives in order to ensure correct modifier application. In Transmittal 1422, CMS states that modifier -59 is:
  • Infrequently (and usually correctly) used to identify a separate encounter
  • Less commonly (and less correctly) used to define a separate anatomic site
  • More commonly (and frequently incorrectly) used to define a distinct service
This tip is adapted from “CMS introduces four new subsets of modifier -59” in the November issue of Briefings on APCs.

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