Inpatient Facility Coding & Compliance Alert

Precision is the key to using the “X” modifiers.

Watch out for the new coding requirements related to Healthcare Common Procedure Coding System (HCPCS) modifier -59 – you won’t turn to the modifier as often, plus the changes could impact your reimbursement. Here’s what you need to know.

Background: CMS is establishing four new HCPCS modifiers to define subsets of the -59 modifier, which is used to define a “Distinct Procedural Service,” effective Jan. 1, 2015. This comes with the notification Change Request (CR) 8863 from CMS.

CR8863 discusses the 2015 changes to the our regular NCCI associated HCPCS modifier -59 which indicates that a code represents a service that is separate and distinct from another service with which it would usually be considered to be bundled. The -59 modifier is so versatile that it is defined for use in a wide variety of circumstances, such as to identify:

• Different encounters;
• Different anatomic sites; and
• Distinct services.

What the rules say: Modifier-59 and other NCCI-associated modifiers should NOT be used to bypass a Procedure to Procedure (PTP) edit unless the proper criteria for use of the modifier are met. Documentation in the medical record must satisfy the criteria required by any NCCI-associated modifier that is used.

The Medicare National Correct Coding Initiative (NCCI) has PTP edits to define bundling when two HCPCS or CPT® codes should not be reported in all or most situations. The underlying principle is that the second code defines a part of the work already included in the first code. Reporting the codes separately is inappropriate. Separate reporting would trigger a separate payment. This would constitute double billing with consequent overpayment to physicians and the outpatient facilities.

The irony: Unfortunately, this modifier is often used incorrectly to bypass NCCI. This modifier is associated with considerable abuse and high levels of appeals and audits, even leading to civil fraud cases. According to the 2013 CERT Report data, a projected $2.4 billion in MPFS payments were made on lines with modifier-59, with a $320 million projected error rate.

The road ahead: The modifier-59 should only be used to identify clearly independent services that represent significant departures from the usual situations described by the NCCI edit. For this purpose, CMS has come up with more precise coding options with the following four new HCPCS modifiers (referred to collectively as -X{EPSU} modifiers) to define specific subsets of the -59 modifier:

• XE - Separate Encounter (A service that is distinct because it occurred during a separate encounter)
• XP - Separate Practitioner (A service that is distinct because it was performed by a different practitioner)
• XS - Separate Structure (A service that is distinct because it was performed on a separate organ/structure)
• XU - Unusual Non-Overlapping Service (The use of a service that is distinct because it does not overlap usual components of the main service).

“The major issue raised with these new modifiers, is when, exactly, to use them. Even knowing that one of these new modifiers should be used, there are significant operational challenges in the process for developing and attaching the modifiers to claims,” opines Duane C. Abbey, PhD, president of Abbey and Abbey Consultants Inc., in Ames, IA. “A simple example is when a Medicare beneficiary receives both physical therapy and occupational therapy on the same date of service. Most likely, two different practitioners will provide services and thus the XP modifier would be appropriate to separate the services,” explains Abbey.

“Watch for further guidance concerning separate encounters to carefully define what constitutes an encounter or separate encounter is. It is much more difficult than you may think,” cautions Abbey.

The good news: CMS will continue to recognize the -59 modifier in many instances, though it may selectively require a more specific - X{EPSU} modifier for billing certain codes at high risk for incorrect billing.

Your strategy for now:

1) Make sure your billing staff is aware of the coding modifier changes.

2) “Review your systems for determining when a modifier is needed and the process for attaching the modifier(s) to the claim,” suggests Abbey.

3) Watch for what the big private payers in your area have to say about this. Some private payers have already disclosed their intention to move to the new modifier -59 replacements. Plus, these modifiers are valid even before national edits are in place, so contractors are not prohibited from requiring you to report them instead of -59 when they meet compliance needs.

Recommended reading: CMS has uploaded some good reading material to offer help on correct modifier -59 use: www.cms.gov/Medicare/Coding/NationalCorrectCodInitEd/downloads/modifier59.pdf

To learn more about the changes, visit http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8863.pdf