Modifiers –Reimbursement or Informational?

by  Christine Woolstenhulme, QCC, QMCS, CPC, CMRS
November 8th, 2013

Modifiers are used to help describe the encounter, and used to further explain the procedure to the payer.  Modifiers will be used if the procedure does not fit or clearly explain the entire encounter.   

There are two types of modifiers:

• Informational modifiers that do not impact reimbursement
• Pricing or Payment modifiers that always impact reimbursement

Claims processing requires the pricing modifier in the first position to be processed correctly.   

There are two levels of modifiers used to alter a procedure:

• Level I Modifiers – CPT Modifiers are two digits and updated by the AMA (American Medical Association) 
• Level II Modifiers – HCPCS Modifiers are alpha Numeric characters and are updated by CMS.

Modifiers are used to help describe the encounter, and used to further explain the procedure to the payer or if the procedure does not fit or explain the entire visit.  Some of the common reasons for using a Modifier may be:

• The procedure was more complicated than anticipated
• Another procedure was required during the same procedure
• The same diagnostic test had to be re-ran on the same day
• The X-Ray was done in one facility and the results were read in a different facility

Consider this example, while doing surgery for a wrist repair 25607, during the same procedure a carpal tunnel release 64721 is done, you would append modifier 51 to show the secondary procedure was performed.  Payers have what is called reimbursement edits for reporting code combinations.  If using two codes are stand-alone codes they may be subject to multiple procedure payment reduction. You would append modifier 51 to the procedure that has less value than the primary procedure. You need to be sure special rules are applied when using modifiers.

Using the appropriate modifiers can substantially impact reimbursement.  If you do not report a modifier and the procedure allows a modifier you will not be paid for the procedure.

There are industry standards related to the use of modifiers and reimbursement. While some modifiers change the payment rates some are for informational use only or impacts bundling edits. 

Pricing Modifiers must always be in the first position for correct reimbursement and claim processing.  Use the KD modifier in the first position if there are multiple modifiers used for pricing or payment.

Below is a list of payment modifiers.

Below are links to WPS Medicare with some great information on Modifiers

 Introduction to Modifiers

 Ranking Modifiers

 Informational Only Modifier Fact Sheet

 Modifier Fact Sheets

References:

• WPS Medicare
• WPS- Introduction to Modifiers