Modifier 59 and the Office of Inspector General

Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CHCC, CRN

When used appropriately, modifier 59 tells a payer that, due to special circumstances, two codes that are normally “bundled” (by either National Correct Coding Initiative, NCCI, edits or CPT guidelines) should be paid separately. But because modifier 59 is such a powerful tool — and because providers may apply it to increase payments inappropriately — payers watch modifier 59 claims closely. For example, in November 2005 the Office of Inspector General (OIG) published a study based on claims data from October to December 2004 (http://oig.hhs.gov/oei/reports/oei-03-02-00771.pdf). The OIG concluded that Centers for Medicare and Medicaid Services (CMS) carriers were not adequately auditing abuse of the 59 modifier, that Medicare was paying for claims it should not and, finally, that closer scrutiny of modifier 59 claims represented a large opportunity to reduce waste in the Medicare program. Although the OIG found deficient use of modifier 59 across all specialties, claims forchemotherapy, podiatry, cytopathology and physical therapy service, as well as for bone marrow aspiration and biopsies, showed the most consistent patterns of abuse.

Evaluation and Management – CEMC

Therefore, practices providing these services can expect especially increased attention from OIG and CMS auditors when applying modifier 59. What’s the lesson? Like any strong medicine, modifier 59 can be incredibly effective, but you must prescribe it judiciously, and only when supported by medical necessity and documentation. Following publication of the OIG’s 2005 study, CMS developed a multi-prong approach to battle inappropriate modifier 59 claims that included:

  • Distribution of the OIG report to the CMS contractors responsible for identifying improper payments and potential for fraud, waste, and abuse
  • Sharing the OIG report with the Recovery Audit Contractors (RAC) that was implemented on a pilot basis under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
  • Publication of a “MedLearn Matters” article to provide continuing education to physicians on how to bill modifier 59 appropriately

CMS has not, to date, delivered on the promise of a “Medlearn Matters” article to educate physicians on the appropriate use of modifier 59. That leaves it to us, as professional and informed coders, to provide physicians with the information they need to apply this powerful modifier correctly. Know the Conditions for Use CPT guidelines specify several circumstances under which you may apply modifier 59 to bill separately for two normally bundled procedures.

These include:

  • Procedures performed during different sessions
  • A different procedure or surgery
  • Procedures performed on anatomically different sites or organ systems
  • Procedures performed via separate incision or excision
  • Separate lesions, or
  • Separate injuries (or area of injury in extensive injuries)

These circumstances boil down to two basic conditions: You can probably apply modifier 59 if the physician performs the procedures:

  • During different sessions, or
  • At different anatomical sites (as in body area, organ system, incision or excision, injury, etc).

The physician must provide sufficient documentation to show that the special circumstances merited separate payment for the two normally bundled procedures. Keep in mind, CPT instructs you not to apply modifier 59 if another, more appropriate modifier such as LT, RT or 76, is available: Modifier 59 is the “modifier of last resort.” In addition, you should never use modifier 59 with E/M services (99210-99499) or radiation treatment management services (77427). You should never use modifier 59 in the absence of supporting documentation, or because you or your provider do not approve of a bundling edit or simply wish to “override” an edit to gain payment. This is inappropriate coding and grounds for negative action on audit. For example, the OIG found that physicians were frequently misusing modifier 59 to gain separate payment for bone marrow biopsy and bone marrow aspiration (38221 and 38220). These procedures are normally bundled, but many oncologists disagreed with the bundle and strongly believed that the two procedures were separate and distinct and, therefore, should be paid separately. Only when the biopsy and the aspiration take place at two separate operative sites through two separate incisions, however, are you justified in applying modifier 59 to break the edit bundling 38221 and 38220. Routine use of modifier 59 simply to “protest” the edit constitutes fraud.

The OIG report also found that many providers appended modifier 59 to the wrong code. According to OIG instructions, you should attach modifier 59 “to the secondary, additional, or lesser service in the code pair” (http://www.cms.hhs.gov/manuals/104_claims/clm104c23.pdf) to indicate that the procedure or service was independent from other services performed on the same day. This is the column two code of the NCCI edits, and the column does not always represent the lower-paying procedure. For example, 31575 (Laryngoscopy, flexible fiberoptic; diagnostic) is a column one code and 31231 (Nasal endoscopy, diagnostic, unilateral or bilateral [separate procedure]) is a column two code. CMS’s guidance instructs the coder to place the 59 on the column two code. Therefore, if the physician performs a nasal endoscopy in the morning and a flexible laryngoscopy later that evening for a separate reason, CMS instructions would have you report 31575, 31231-59.

A quick glance at the physician fee schedule will reveal that code 31231 carries more relative value units (RVUs) and a higher fee than code 31575. But, the status of 31231 as a “column two” code — not its value relative to 31575 — determines the correct placement of the 59 modifier. The placement in the NCCI columns, rather payment dollars, is key for CMS. Although CMS is looking at overuse of the 59 modifier, you needn’t fear if you are applying the modifier correctly. Just remember: If the surgeon sees the patient twice in the same day for separate procedures, or performs a procedure at separate body areas, organ systems, incisions, excisions, injuries or lesions — and those circumstances are documented in the medical record — you are justified in applying modifier 59.

Modifier 59 At A Glance

Modifier 59 (Distinct procedural service) Under certain circumstances, the physician may need to indicate that a procedure or service was distinct or independent from other services performed on the same day. Modifier ‘59’ is used to identify procedures/services that are not normally reported together, but are appropriate under the circumstances. This may represent a different session or patient encounter, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury [or area of injury in extensive injuries] not ordinarily encountered or performed on the same day by the same physician. However, when another already established modifier is appropriate it should be used rather than modifier ‘59.’ Only if no more descriptive modifier is available, and the use of modifier ‘59’ best explains the circumstances, should modifier ‘59’ be used.

—     Source: CPT 2007

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