Will Modifier 59 Subsets Decrease Abuse?

By: Nancy Clark, CPC, CPC-H, CPB, CPMA, CPC-I

The Centers for Medicare and Medicaid Services (CMS) will  implement four new Healthcare Common Procedure Coding System (HCPCS) modifiers in January 2015 to describe subsets of modifier 59 Distinct procedural service.

The purpose of modifier 59 is to allow the reporting of services that cannot usually be reported together. Transmittal 1422 indicates that this modifier is frequently misused. The 2013 Comprehensive Error Rate Testing (CERT) data indicates a projected $320 million error rate in physician claims and $450 million error irate for facility claims. CMS explains that not all the errors may have directly resulted from improper use of modifier 59, but it is believed that a substantial portion of these errors are attributable to incorrect modifier usage.

The need for the new modifiers is driven by inappropriate unbundling of procedures considered integral to each other, as identified in the National Correct Coding Initiative (NCCI) edits. The rationale in applying these edits to procedures is that the second code defines a component of the work of the first code and, therefore, it would be inappropriate to report the second code separately. The use of modifier 59 indicates that for a distinct reason, these procedures should be separately reportable. The new modifiers, referred to collectively as -X{EPSU}, provide greater detail about why the procedure is distinct than modifier 59 does:

  • XE indicates a Separate Encounter, A Service That Is Distinct Because It Occurred During A Separate Encounter
  • XP indicates a Separate Practitioner, A Service That Is Distinct Because It Was Performed By A Different Practitioner
  • XS indicates a Separate Structure, A Service That Is Distinct Because It Was Performed On A Separate Organ/Structure
  • XU indicates an Unusual Non-overlapping Service, The Use Of A Service That Is Distinct Because It Does Not Overlap Usual Components Of The Main Service

CMS speculates that by identifying specific reasons to apply modifier 59, it will be easier to filter claims that may be billed inappropriately. For example, when modifier XS Separate structure is appended to a procedure and linked to a diagnosis code representing a different body part, this would clearly indicate the reason for use and the claim would potentially bypass a medical necessity review. However, use of XU an Unusual non-overlapping service, which is more ambiguous, may not be readily understood with information on the claim form and would most likely trigger a manual review.

In practice, XU may become the “default” subset modifier—that which may be used to bypass the NCCI edits when no other subset modifier is appropriate. Keep in mind that CMS will still accept modifier 59, but CPT® directs, “when another already established modifier is appropriate it should be used rather than modifier 59”. Therefore, these newly established modifiers will take precedence over modifier 59.

If claims submitters are adequately educated on the use of these new modifiers, he positive outcomes may include fewer manual audit reviews and greater claims accuracy. Unfortunately, many healthcare professionals may either not understand the correct use of modifiers or choose to ignore correct use in an attempt to increase reimbursement. We need to continue to provide and obtain education in the proper use of modifiers in claims reporting, and emphasize that modifier use is frequently the exception, not the rule. If medical professionals are not well-informed, Transmittal 1422 may have the unintended consequence of additional claims audits, increased confusion, and even more inappropriate use.

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Nancy Clark

Nancy Clark

Nancy Clark, CPC, COC, CPB, CPMA, CPC-I, has over 20 years of experience in medical coding and billing, healthcare consulting, accounting, and business administration. She applies her skills to assist physician and hospital clients with revenue cycle management. Clark focuses on coding and documentation reviews, assistance with payer audits, and providing education for physicians and their staff. She is also an AAPC certified instructor, a contributing author to health care publications, and a presenter at seminars. Clark is a member of the Novitas Medicare Provider Outreach and Education Advisory Group and co-founder of the New Jersey Coders' Day Medical Coding and Billing Conference. She is proud to support the AAPC for recognizing the value of medical coding professionals and enjoys working with its members.
Nancy Clark

About Has 12 Posts

Nancy Clark, CPC, COC, CPB, CPMA, CPC-I, has over 20 years of experience in medical coding and billing, healthcare consulting, accounting, and business administration. She applies her skills to assist physician and hospital clients with revenue cycle management. Clark focuses on coding and documentation reviews, assistance with payer audits, and providing education for physicians and their staff. She is also an AAPC certified instructor, a contributing author to health care publications, and a presenter at seminars. Clark is a member of the Novitas Medicare Provider Outreach and Education Advisory Group and co-founder of the New Jersey Coders' Day Medical Coding and Billing Conference. She is proud to support the AAPC for recognizing the value of medical coding professionals and enjoys working with its members.

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