Billing Update: Processing Claims Containing G Modifiers

Are you using G modifiers correctly? According to a recent report from the Department of Health and Human Services (HHS), Medicare paid close to $744 million in 2011 for claims that included G modifiers, indicating that the provider submitting the claim expected a denial. In the May 3, 2013, memorandum report, “Medicare Payments for Part B Claims with G Modifiers,” the HHS deputy inspector general for evaluation and inspections explains how contractors process claims with these modifiers. This is a good time to ensure your laboratory is using the G modifiers properly. Currently there are four G modifiers providers use when there is a need to let the Medicare contractor know that an item may not be reasonable and necessary or that an item or service is not covered by Medicare. Several of these modifiers are associated with the use of advance beneficiary notices (ABN). Modifier Descriptions and Use The four G modifiers about which this report is concerned are as follows:

• GA: Service or item is not considered reasonable and necessary; ABN is on file.

• GZ: Service or item is not considered reasonable and necessary; ABN is not on file.

• GX: Service or item is statutorily excluded, and the provider or supplier voluntarily notified the beneficiary with an ABN.

• GY: Service or item is statutorily excluded or does not meet the definition of any Medicare benefit; ABN is not required.

GA and GZ modifiers are used in the case where the claim is expected to be denied as not reasonable and necessary. These modifiers are used when a provider may be uncertain about whether a claim should be paid, such as in the case of a frequency-limited laboratory test. These modifiers are also used in circumstances when the provider is certain that the claim should not be paid. Beginning in January 2002, the use of the GA modifier was mandatory if the provider had obtained a properly executed ABN. At that same time, Medicare required providers and suppliers to use the GZ modifier for claims they expected to be denied but because there is no ABN on file, the beneficiary may not be held liable. As a practical matter, many labs do not use the GZ modifier and simply write off claims in that category. The reimbursement for many lab tests is so low there does not seem to be any reason to spend the money filing claims for which you can never get paid. Also beginning in January 2002, Medicare allowed providers and suppliers, including laboratories, to use the GY modifier as a way to document that they know the services provided are not covered by reason of statutory exclusion. Beneficiaries are liable for claims in this category whether or not an ABN is obtained; however, the modifier exists for those cases when a beneficiary needs Medicare to deny the claim so it can be submitted to a secondary payer. In April 2010, Medicare created and established the GX modifier. This is a documentation modifier meant to inform the contractor or payer that the lab knows the items or services provided are statutorily excluded and that the lab voluntarily informed the beneficiary of that fact through the use of an ABN. Contractors Inconsistently Apply Rules The evaluations and inspections study (OEI–02–01–00160), conducted on all Part B claims that contained one of the four G modifiers processed during calendar year 2011, revealed that Medicare paid for 16.5 million claims containing one of these modifiers. That equals nearly $744 million paid to providers for claims they expected to be denied. The vast majority, 98 percent, were claims that contained a GA modifier. Another 2 percent were submitted with GZ modifiers. In these two categories of claims, 51 percent of the paid claims with a GA modifier and about three-quarters of the paid claims with GZ modifiers were for laboratory tests. This may be a function of the sheer volume of claims submitted by laboratories. In July 2011, the Centers for Medicare and Medicaid Services (CMS) required contractors to automatically deny claims with GZ modifiers; however, some contractors did not follow that requirement. Also, contractors do not always consider a modifier submitted on a claim. The study pointed out that this was the case for GY modifiers. For the GX modifier, established in April 2010 on Part A claims, Medicare has never issued instructions to contractors on how they should process this modifier on Part B claims. Medicare paid for 11 percent of claims submitted with GX modifiers, totaling about $1.3 million. Approximately 21 percent of those claims were for laboratory tests. Contractor Error, Provider Refunds The report outlines steps that CMS should take to correct these vulnerabilities including ensuring that contractors are following instructions provided by CMS. However, in a situation where a claim should have been denied and was not, the provider who submitted the claim is still liable for the overpayment. Laboratories should have audits and monitors in place to detect these inappropriate payments and ensure that, where appropriate, erroneous payments are returned to the contractor. Further, since the Office of Inspector General work plan has contained items related to claims that include G modifiers, the issuance of this report may signal an increase in denials for these claims. Laboratory compliance officers and administrators should review lab policies and procedures related to these claims to ensure they are being used appropriately.