The ABN Modifiers and How to Properly Use Them

Several months ago, we discussed the appropriate use of an Advance Beneficiary Notice of Noncoverage (ABN) form to report patient-specific information.¹ This month, we’ll delve into a significant ABN issue that has a direct impact on your lab’s reimbursement and compliance: proper usage of ABN-related modifiers.

The ABN Form & Modifiers

To review, the ABN is a notice that labs and other providers furnish to let Medicare beneficiaries know that Medicare is unlikely to provide coverage for a service, or services, in a particular instance. Providers must complete the ABN as instructed to transfer potential financial liability to the beneficiary if a coverage denial occurs. The ABN may also be used to provide notification of financial liability for items or services that Medicare never covers. The notice must be presented and explained to a patient before the services addressed in the notice are provided.

ABN modifiers are used during the billing process to clarify patient status. They’re not indicated on the ABN form but rather on the actual claim filed for payment purposes. During audits, we’ve often come across numerous instances where the modifiers are confused and inappropriately reported. So, let’s examine these modifiers and their appropriate use.

GA Modifier: Waiver of Liability Statement Issued as Required by Payer Policy

Centers for Medicare & Medicaid Services (CMS) instructions call for using the GA modifier to report that an ABN was issued for a service and is on file. You don’t have to submit an actual copy of the ABN to the payer, but you do have to make it available upon request. The medical rationale for collecting the form is that the service being performed doesn’t meet medical necessity requirements and the provider is expecting a denial. Therefore, the provider gives the beneficiary the ABN explaining why the claim will be denied before performing the service.

The potential for denials based on medical necessity may exist for lab testing that’s impacted by a local coverage determination (LCD) or national coverage determination (NCD). While the presence or absence of the modifier doesn’t influence Medicare’s payment determination, appending the GA modifier ensures that upon denial, if it comes to that, Medicare will automatically indicate on the Explanation of Benefits that the beneficiary is liable for payment.

It’s also appropriate to report the GA modifier when the beneficiary refuses to sign the ABN. The refusal should be documented on the form. If the GA modifier isn’t reported and Medicare issues a denial, the lab retains liability for the service charge and can’t bill the beneficiary.

Example: A physician orders a vitamin D test for a Medicare cancer beneficiary. The order is accompanied by ICD-10 code C34.2 (malignant neoplasm of middle lobe, bronchus or lung). The laboratory service center that collects the blood specimen notes that the testing is impacted by an LCD from Medicare Administrative Contractor (MAC) Noridian that indicates that testing may not be used for routine or other screening. The associated coverage article doesn’t list ICD C34.2 as a code that provides coverage for payment. As a result, the lab doesn’t expect to see Medicare reimbursement and wants to be able to bill the patient. So, it presents and gets the patient to sign an ABN accepting responsibility for payment if coverage is denied. The lab then files a claim with CPT 82306-GA; the modifier tells the payer that an ABN is on file in case medical necessity is lacking. If the service is denied, the lab may bill the patient directly.

Question: May the lab contact the physician’s office and request additional diagnostic information to support medical necessity?

Answer: Yes, if it does so before billing the service.

GX Modifier: Notice of Liability Issued, Voluntary Under Payer Policy

The GX modifier is used to report that a voluntary ABN has been issued to the beneficiary because an ordered service is statutorily noncovered or doesn’t meet the definition of a Medicare benefit. Statutorily excluded refers to Medicare benefits that are never covered as a matter of law. Explanation: Medicare doesn’t pay for all healthcare costs. Certain items or services are program or statutory exclusions and won’t be reimbursed by Medicare under any circumstances. Statutorily noncovered is defined in the Program Integrity Manual (PIM) Chapter 1, §2.3.3.B; not a Medicare benefit is defined in the PIM, Chapter 1, §2.3.3.A.

There’s no requirement that an ABN be collected for such services. The lab may collect the ABN if it believes that it will add another layer of “comfort” that the patient will more readily accept liability for payment.

Note: There used to be another form used for this purpose. Until 2010, voluntary issuance of notices used the now retired Notice of Exclusion from Medicare Benefits (NEMB) form or notices of the providers’ own devising.

Attaching the GX modifier will result in the automatic denial for claim lines submitted with the modifier and noncovered charges. Liability will be assigned to the beneficiary. It’s still a good idea to bill and receive the denial for purposes of billing a secondary payer.

Example: A lab is aware that a payer has determined that a genetic test panel ordered by an obstetrician for a patient is “investigational” and won’t pay for it. So, the lab that performs the testing wants the patient to accept liability for it. Since the testing is a noncovered service, the lab collects a voluntary ABN to get an extra layer of payment protection. It then bills the test with the GX modifier attached to the appropriate procedural code. Payment is automatically denied and the patient may then be billed for the testing.

GY Modifier: Service Provided is Statutorily Excluded from the Medicare Program

Like the GX, the GY modifier indicates that an ordered service is statutorily noncovered or doesn’t meet the definition of a Medicare benefit. An ABN isn’t required in this situation. Services provided under statutory exclusion from the Medicare program would be denied regardless of whether the modifier is listed on the claim. However, the provider should still list the GY modifier for claims purposes to prevent an erroneous payment. Line items submitted as noncovered will be denied as Patient Responsibility, which provides the ultimate purpose for billing.

Example: An infectious disease specialist orders a methicillin-resistant test for Staphylococcus aureus for a Medicare outpatient. The lab performing the test is billing the CGS Medicare contractor that has a coverage article that alerts “providers that National Government Services considers CPT code 87641 to be a test used for screening purposes for which payment will not be allowed.” Further stated is that “screening tests are statutorily non-covered based on Title VIII of the Social Security Act, Section 1862(a)(1)(A) which excludes expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

NGS explains in the article that there are no diagnoses for which this test is covered. Listed diagnoses are identified to “emphasize that we have specifically considered them and have determined that this service is not covered for them.” The article specifically states: “When billing CPT code 87641 for screening purposes (statutorily non-covered), ICD-10-CM codes, including but not limited to those listed below, may be reported. The –GY modifier should be reported, as applicable.”² Result: The lab would bill CPT 87621-GY on the claim.

GZ Modifier: Item or Service Expected to Be Denied as Not Reasonable and Necessary

CMS says that the GZ modifier must be used by physicians, practitioners, or suppliers to indicate that they expect that Medicare will deny an item or service as not reasonable and necessary and they have not had an ABN signed by the beneficiary.

Previously, the modifier was reported for informational purposes and the claim was adjudicated for medical necessity with MACs having discretion for payment decisions. This discretion officially ended on July 1, 2011.³ MACs now have to deny a service when attached to the GZ modifier. In other words, reporting a GZ modifier results in an automatic denial. This eliminates the need to evaluate a claim and the patient has no payment responsibility.

It seems rational that a provider may doubt that medical necessity is of question and should be able to submit the claim without a modifier and attain routine adjudication. But when reported ICD-10 codes are void from an LCD/NCD, denial will still occur. Thus, a provider may as well report GZ if medical necessity diligence cannot provide “covered coding.” Providers should not submit claims for procedures that aren’t medically necessary. Ordering practitioners may be requested to provide additional diagnostic information that supports medical necessity.

With the most recently updated form implemented by CMS, an ABN may be used for lack of medical necessity and for services that are statutorily exempt. When an ABN is collected for a non-covered procedure, the GX modifier should be attached. If a non-covered procedure is performed in the absence of an ABN, report the GY modifier. The summary notice supplied to the patient will indicate patient responsibility.

Example: A reference lab receives samples for genetic testing from a physician office that aren’t accompanied with diagnostic information or a forwarded ABN. The lab still performs the tests to maintain specimen integrity and timely provision of results. The billing staff doesn’t want to bill for services that may not be medically necessary. So, the testing is billed with the appropriate procedural codes appended with the GY modifier. No reimbursement is received.

Theoretically, the lab could get the missing diagnostic information from the physician and contact the patient to sign the ABN. But all of this must be done prior to billing, which would be nearly impossible at this point. As a result, the lab must take a financial hit and do a better job of educating the physician of the importance of documenting medical necessity and getting patients to sign an ABN when tests are ordered.

References:

1. https://www.g2intelligence.com/getting-paid-how-to-complete-the-abn-form/
2. https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=52379&ver=7&DocID=A52379&bc=gAAAABAAQAAA&
3. https://www.hhs.gov/guidance/document/auto-denial-claims-submitted-gz-modifier

________________________________________________________________________________________________________________________________________

Diana W. Voorhees, M.A., CLS, MT, SH, CLCP, CPCO, is principal in DV & Associates, Inc., Salt Lake City, UT, which makes no representation, guarantee, or warranty, expressed or implied, that the information provided is free of error, and will bear no responsibility or liability for results or consequences of its use.