Otolaryngology Coding Alert

HCFA (now the Centers for Medicare and Medicaid Services, or CMS) deleted modifier -GX (service not covered by Medicare) and replaced it with two new modifiers, one of which makes surgeons responsible for deciding if the procedures they perform may not be considered reasonable and necessary by Medicare.

Two new codes, Q3015 (item or service statutorily non-covered, including benefit category exclusion [use only when no specific code is available]) and Q3016 (item or service not reasonable and necessary [use only when no specific code is available]), have also been added to HCPCS.

According to an April 26 Medicare transmittal (B-01-30), modifier -GX has been replaced by modifiers -GY (item or service statutorily non-covered) and -GZ (item or service not reasonable and necessary).

Modifier -GY and code Q3015 perform the same function as did modifier -GX, which was used to obtain a denial for a noncovered service so a third-party carrier or the patient could be billed.

Modifier -GZ and code Q3016 appear to force the surgeon to determine if a procedure he or she considers medically necessary is reasonable and necessary according to HCFA. The memorandum states, The new modifiers, -GY and -GZ, must be used when a specific code is available but the provider or supplier wants to indicate that the item or service is not covered or is not reasonable and necessary [emphasis added].

The transmittal further elaborates:
Medicare may cover certain items and services as reasonable and necessary under certain circumstances. These same items and services may not be covered benefits under other circumstances. When a provider or supplier furnishes either an assigned or unassigned service or item that they believe is not reasonable or necessary according to Medicare policies and regulations, the specific HCPCS code that describes the service or item furnished must be submitted along with the -GZ modifier. If there is no specific code available, the provider or supplier may submit the claim using the Q3016 code. Claims submitted using the -GZ modifier or Q3016 might not be auto-denied simply based on the code. However, the carrier may auto-deny based on other criteria such as diagnosis to procedure coding. These claims should be included in regular medical review procedures.
The memorandum also states, When a service is performed or item supplied that is not reasonable and necessary under the specific circumstances, it is the responsibility of the provider or supplier to notify the beneficiary in writing through the use of the advance beneficiary notice (ABN). Under these circumstances, the provider or supplier is instructed to file the services or items with the -GA modifier (waiver of liability statement on file) and Q3016 or modifier -GZ, not instead or in place of them.