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Modifiers - Reimbursement or Informational? Modifier Training
October 14, 2015
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 need to 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 aware of special rules that 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.
These are just a few examples to show the impact of modifiers.
Increased Procedural services
Maximum of 110% of Fee Schedule Allowance/Contracted Rate with supporting documentation
150% of Fee Schedule Allowance/Contracted Rate Submit one line with one unit
50% of Fee Schedule Allowances/Contracted Rate for each additional procedure unless procedure is exempt from multiple procedure logic
Follow up care only
20% of Fee Schedule Allowance/Contracted Rate
Separate encounter, distinct service
Informational /impacts bundling
It pays to understand and get familiar with modifiers and how they are used. Modifiers have different pricing, some pay 10% of the fee schedule and some pay 100%. For more information on how modifiers work, check out the links below from WPS Medicare.