To start, knowing which modifier is most appropriate must be driven by documentation, not by what will obtain payment, so without reviewing the medical record it is hard to advise on which one is best for your situation.
That said, Per CMS and NCCI policy, nerve blocks are not to be reported if performed by the same physician who performs the medical or surgical procedure at the same encounter. Use of a 59 modifier in this situation would be inappropriate and considered unbundling unless the nerve block is completely unrelated to the surgical procedure. In many cases, the nerve block are placed pre-operatively by the anesthesiologist, in which case the 59 modifier could be supported, but the XP modifier would be more correct in this situation. I would not use modifier 58 as this is for a staged procedure during the global period, and global periods are a professional reimbursement concept which does not apply to facilities.
Regarding G89.18, I'd also note that whether or not this diagnosis is appropriate would depend on whether or not the physician has documented the presence of 'acute postoperative pain'. If the nerve block was placed during or prior to surgery, I'm not sure how that diagnosis could be supported.
I'd just add too that under CMS OPPS payment methodology, even if unbundled with a modifier, nerve blocks are packaged into the primary procedure done at the encounter in the majority of surgical cases, so you will not see additional payment for these on the facility side for these procedures - if you are already using a modifier 59, then what you are seeing as a denial may actually be the correct payment, and if that is the case, a different modifier would not make any difference in the reimbursement.