Modifiers that affect Revenue

Every patient that walks through the door has a story to tell about what brought them in that day. How a physician tells that story through documentation is crucial to receive reimbursement that aligns with the payment policies set forth by various third-party payers.

One area of reimbursement that can affect payment is the use of modifiers. What is a modifier?

Modifiers indicate that a service or procedure performed has been altered by some specific circumstance, but not changed in its definition or code. They are used to add information or change the description of the service to improve accuracy or specificity.

Novitas, a regional Medicare contractor

Types of Modifiers

There are two classifications of modifiers that will help identify the proper order to place them on a claim.

Informational Modifiers – Provide needed information to justify payment or tell more of the story about the patient.

Examples : Modifiers 25 and 59 indicate the fee for the code will not be altered by appending these modifiers

Payment modifiers– Directly alter the payment of a particular code and cause automated pricing changes as defined by payor policies.

Examples : 22, 26, 50, 52, 53, 54, 55, 78, 79

Importance of using the correct payment modifiers

A very important reason for using payment-affecting modifiers was recently seen in an audit performed by the OIG (Office of Inspector General) and was released in November 2022. In the audit, they reviewed claims from 2017 to 2019 due to data they received showing that two different physicians billed the same procedure code for the same patient on the same day.

The results indicated that 49 of the sampled services were incorrectly billed without the co-surgery modifier, 14 were incorrectly billed without an assistant-at-surgery modifier and 6 that were incorrectly billed as duplicate services.

The proper billing for  co-surgery is for both physicians to add a 62 modifier to the same code, thus earning them both an equal 62.5% for the co-surgery. The purpose of this modifier indicates they both performed distinct parts of the same procedure.

The proper application of modifier 80 for an assistant surgeon is to show that one surgeon performed the entire procedure and that the assistance of another surgeon was needed. The reimbursement for this modifier for the assistant surgeon is 16% of the surgery fee. The primary surgeon of course retains 100% of the service and they append no modifier.

By not applying the correct modifier, a physician is receiving more money than they are entitled to for the work performed as indicated by the third-party payor policy.

As part of the OIG recommendations, they indicated that Medicare should update its requirements and provide educational material to improve a physician’s understanding of the Part B billing requirements for co-surgery procedures.

What Now?

In my opinion, the guidelines found on all MAC carrier websites are sufficient to show the requirements. The problem is unfortunately that many practices are overwhelmed with the volume and are struggling to retain qualified staff that understands these rules.

That is why the OIG recommends practices, as part of their compliance plan, should be performing internal audits to assess any weaknesses in coding and billing practices. There is also an advantage to conducting external audits. How so?

This will bring experienced auditors with a non-biased perspective, that can provide appropriate solutions to the table. These audits are recommended quarterly, biannually, or even annually as a preventative measure to possibly prevent an investigation by the OIG.

Show the effectiveness of your compliance plan, with full transparency and ensure your physicians can keep their hard-earned revenue with the ultimate goal of keeping their doors open to allow patients to continue to receive much-needed services.

Questions? Contact SPARKAdvisory Network at www.sparkadvise.com