Modifiers The Key To Proper Reimbursement. Proper use of modifiers (usually) leads to correct payment. Author: Kenneth F. Malkin, D.P.M.

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1 Modifiers The Key To Proper Reimbursement Proper use of modifiers (usually) leads to correct payment. Author: Kenneth F. Malkin, D.P.M. Dr. Malkin is a diplomate of the American Board of Quality Assurance and Utilization Review Physicians. He is immediate past president of the American College of Podiatric Medical Review and the Medicare Physicians Carrier Advisory Committee representative for New Jersey. In 1992, the Resource Based Relative Value System (RBRVS) began to replace the long established usual and customary methodology for determining reimbursement for physicians by the Medicare program. RBRVS was a radical departure from the previous payment methodology. An integral part of this new system was the introduction of new payment modifiers. Generally, modifiers serve to bypass payment edits designed to deny payments for services. Leaving off a needed modifier will surely result in denial of payment. Proper use of modifiers is important, as a case has been made by government auditors that the act of adding a modifier is willful and is designed to force payment when payment normally would not be made. The Medicare program reimburses physicians only for services which are medically necessary and that are assumed to be properly documented. The Medicare Carrier s Manual describes the proper use of most modifiers, and they are sometimes defined differently there than in the Current Procedural Terminology Manual (CPT) published by the American Medical Association. Most commercial carriers have no published payment policies in regards to modifier usage, nor do they follow the convention of the CPT. Proper payment often requires costly appeals and claims resubmissions, severely eroding the perceived value of their published fee schedules. This article relates the story of a man named Jed, a poor mountaineer who could barely keep his family fed..then one day he discovered modifiers I mean bubbling crude Nah, this is a story about a hypothetical patient, Mrs. Multiple Complaints and her podiatric physician, Dr. Ethical Smart Biller, who is a modifier maven. Day One: July 1, 2002 Mrs. Multiple Complaints presented to Dr. Ethical Smart Biller s office. She had not been seen face-to-face by Dr. Ethical Smart Biller or any his associates within the last three years. She found Dr. Biller s name in her insurance directory from Poorpayer Insurance Company. She presented to the office that day with multiple complaints. Her first concern was painful red and swollen toes 2 and 3 on the right foot and the second complaint was a painful plantar right heel. After an appropriate history and exam was performed, the doctor performed an incision and drainage of toes 2 and 3 without anesthesia, and provided a steroid injection of the right heel with Celestone Soluspan and Marcaine. He properly billed Poorpayer Insurance Company as follows: Diagnosis # 1 Paronychia Diagnosis # 2 Heel spur syndrome Procedure # linked to diagnosis #1 or #2 Procedure # T6-T7 linked to diagnosis #1 Procedure # RT linked to diagnosis #2 Procedure # 4 J0702 linked to diagnosis # 2

2 The -25 modifier is defined as follows by CPT 2003: Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Same Day of the Procedure or Other Service: The physician may need to indicate that on the day a procedure or service identified by a CPT code was performed, the patient s condition required a significant, separately identifiable E/M service above and beyond the other service provided or beyond the usual preoperative and postoperative care associated with the procedure that was performed. The E/M service may be prompted by the symptom or condition for which the procedure and/or service was provided. As such, different diagnoses are not required for reporting of the E/M services on the same date. This circumstance may be reported by adding the modifier - 25 to the appropriate level of E/M service, or the separate five digit modifier may be used. Note: This modifier is not used to report an E/M service that resulted in a decision to perform surgery. See modifier -57. Both CPT and are possible coding choices. A number of Medicare Carrier s Local Medical Review Policies (LMRP s) now require that the injectable steroid be billed on a separate line or that the name of the product and dosage be reported in box 19 on the CMS 1500 claim form. There are no Correct Coding Initiative edits requiring a modifier for the incision and drainage procedure and the injection when billed at the same patient encounter. Day Three: July 4, 2003 Three days later Mrs. Multiple Complaints presented for a scheduled follow-up of the multiple paronychia with Dr. Ethical Smart Biller. Mrs. Multiple Complaints reports that her toes were doing fine, but her heel pain was much worse after the injection; so much so that she can barely walk on it, and that she wanted Dr. Biller to look at it. Dr. Biller addressed both complaints and thoroughly documented his encounter with recommendation for ice, decreased activity, and tincture of time for the right heel. Dr. Smart Biller properly billed Poorpayer Insurance Company as follows: Dx: Heel spur syndrome All services related to the post-op management of the incision and drainage procedures performed three days prior were included (bundled) into the original service, as has a ten-day global period. The injection code, 20550, has a 0 day global period. Therefore, when Dr. Ethical Smart Biller re-evaluated the patient s worsening heel pain and properly documented this service, he appended the -24 modifier to the E/M service. The only reason the patient was rescheduled by Dr. Ethical Smart Biller three days later was for the follow-up of the paronychia, and not for re-evaluation of heel pain. Dr. Biller normally sees a patient back for heel pain in 1-2 weeks following an injection. Therefore, if the patient did not complain of worsening heel pain that required an E/M service, the doctor would not address the heel complaint in his note, except perhaps in passing, and not bill for the E/M service. The take-home point is that documentation of the patient s worsening heel is significant and serves as the trigger for an allowable E/M service. The -24 modifier is defined as follows by CPT 2003 Unrelated Evaluation and Management Service by the Same Physician During a Postoperative Period: The physician may need to indicate that an evaluation and management

3 service was performed during a postoperative period for a reason(s) unrelated to the original procedure. This circumstance may be reported by adding the modifier -24 to the appropriate level of E/M service, or the separate five digit modifier may be used. Day Seven: July 10, 2003 Three days after the last visit for follow up of the paronychia, Mrs. Multiple Complaints called the office and was seen on an urgent basis after stubbing her fifth left toe on her bed frame. Dr. Biller s impression was that this injury represented a possible fracture, as the toes appeared ecchymotic, edematous, and painful. There was also pain reported proximal to the fifth toe as well. Dr. Ethical Smart Biller took an x-ray of the left foot in the office which revealed a fracture of the proximal phalanx in poor alignment and decided a closed reduction of the digit was in order. He anesthetized the digit and closed, reduced, and splinted the digit. He took another x-ray to confirm his reduction was performed properly and then dispensed a post op shoe, and re-appointed the patient for one week later for the heel pain and the fracture. Dr. Biller billed Poorpayer Insurance Company as follows: Dx. Fracture (closed reduction fracture toe except hallux with manipulation) 79-T LT LT - 76 He billed the patient cash for L3218, Women s surgical boot The -57 modifier is appended to because the E/M code resulted in a decision to perform CPT 28515, which has a 90-day global period. The 57 modifier is defined as follows by CPT 2003: Decision for Surgery: An evaluation and management service that resulted in the initial decision to perform the surgery may be identified by adding the modifier -57 to the appropriate level of E/M service, or the separate five digit modifier may be used. The -24 modifier is also appended to the E/M service because today s E/M is unrelated to the I and D (10061) which is still within its 10-day global period. The E/M is appropriate as a distinct and separate service, as this is a new condition, requiring an interim history, exam, and decision making. The -79 modifier is appended to the 28515, as the closed reduction is a procedure unrelated to the I and D (10061), which is still within its global period. The 79 modifier is defined as follows by CPT 2003: Unrelated Procedure or Service by the Same Physician During the Postoperative Period: The physician may need to indicate that the performance of a procedure or service during the postoperative period was unrelated to the original procedure. This circumstance may be reported by using the modifier -79 or by using the separate five digit modifier (For repeat procedures on the same day, see -76 ). The -76 modifier is used because two sets of x-rays were taken by the same physician on the same day a pre-op set and a post-reduction set. It is improper to use a 2 in the unit field in

4 this case, and one should bill the services as described above, using two lines of code as described above. The 76 modifier is defined as follows by CPT 2003: Repeat Procedure by Same Physician: The physician may need to indicate that a procedure or service was repeated subsequent to the original procedure or service. This circumstance may be reported by adding the modifier -76 to the repeated procedure/service or the separate five digit modifier code may be used. One should recognize that the probability of a Medicare computer system properly processing this claim is very slim. One should initially submit either an electronic or paper claim, and if the services are denied, appeal to a post payment review in writing. If appealing, you should supply all medical records with a cover letter describing the time line of the services provided. Six Months Later: January 10, 2004 Mrs. Multiple Complaints presents to Dr. Ethical Smart Biller, who by the way, has still not been paid properly by Poorpayer Insurance for the last series of podiatric care, but is still appealing. Mrs. Complaints is now diabetic and presents with a draining ulceration with abscess and cellulitis. Dr. Ethical Smart Biller performs an interim office history and physical and calls her primary care physician (PCP) to discuss the case. Dr. Biller and the PCP agree on her hospital admission. Dr. Biller arranges the hospitalization for that day, and discusses the seriousness and prognosis of the condition with the patient and her husband (after obtaining HIPAA clearance, of course.) Dr. Ethical Smart Biller goes to the hospital that night and writes up an admit note and history and physical, orders intravenous antibiotics, and decompresses the infection in the operating room (all before midnight). Dr. Ethical Smart Biller must combine all his E/M work for that one day into one E/M code either an initial hospital admission code or an office E/M. The office E/M code that would be appropriate is a CPT based on time. The total visit in the office was 50 minutes and Dr. Smart Ethical Biller spent 30 minutes in face-to-face counseling and coordinating care with Mrs. Multiple Complaints. A CPT is defined as typically a 40 minute visit with more than 20 minutes counseling and coordinating care. What initial hospital visit code might be appropriate? Initial hospital admission codes (CPT ) have three levels of complexity. The two highest levels of codes require a comprehensive exam which a podiatrist would very unlikely provide - not due to scope of practice, but rather by the description of a comprehensive exam in the E/M Guidelines of CMS. Therefore, Dr. Biller is essentially limited to a CPT if using either the 1995 or 1997 CMS Documentation Guidelines unless he bills the visit based on time of counseling and coordinating care. The CMS Guidelines state the encounter is to be billed on time only if the encounter was dominated by counseling and coordinating care. The three levels of initial hospital visit code would require either 30, 50 or 70 minutes at the bedside and on the patient s hospital floor or unit with more than half that time spent counseling and coordinating care. Note that hospital visits include floor time. Which type of code pays better? CPT pays $ in New Jersey and CPT pays $71.59, CPT pays $ and CPT pays $ CPT appears to be the best choice for another reason we will discuss in a moment. If audited for a 99215, one would simply send in hospital and office records.

5 Other Considerations There are a few other considerations when choosing a code. Only one physician may be paid by Medicare for an initial hospital visit on the same patient for the same hospital admission. If the patient s attending MD or DO also bills for an initial hospital visit, the carrier will pay the first claim that it receives, and deny the second one. So if Dr. Biller submits an office code series code he does not risk this type of a denial. The last coding consideration in regards to the E/M code depends on each state s practice act and the hospital bylaws in question. In some states and/or hospitals, patients may only be coadmitted in a hospital by a podiatrist. In these cases, typically the family doctor actually admits the patient to the hospital. He then writes an order for a consult for the podiatrist to participate. In this scenario, the primary care physician uses the initial hospital visit codes while the podiatrist bills using an inpatient consultation code (CPT series). Selecting Procedure Code Now what procedure code should one select for the operation? It is reasonable to assume that this patient will probably require daily dressing changes after the surgery by Dr. Ethical Smart Biller and also may require another surgical procedure or two before leaving the hospital. The doctor should choose the procedure which describes his surgery, but also has the lowest global days attached to it if he would like to bill for daily hospital visits as well. This series of subsequent hospital visit codes is the CPT series, which pay as follows: CPT pays $35.63, pays $58.88, and pays $83.61 in New Jersey. Let us assume the entire hospital stay will be 14 days. One choice would be to bill CPT defined as a complex I and D below the fascia, which pays $ This procedure has a ten day global period, so the total amount billed for the 14 days, excluding the initial E/M code, would be as follows: CPT $ CPT for days = 4 day x $35.63 = $ Total billed= $ Another option would be to bill a lesser service for the initial surgery such as CPT which has a zero day global period and 13 days of hospital visits $ for days 2-14 at $35.63 per day = $ Total = $ Amazing-a $0.12 difference. It would seem that billing CPT and not being obligated to see the patient each and every day - would make sense. The E/M code would require a -25 modifier appended in either case. One additional point. Some might argue that it is appropriate to bill for daily dressing changes using the hospital visit codes appended with a -24 modifier stating they are treating the underlying problem the infection. The Medicare Carrier s Manual does allow payment in the hospital setting using a -24 modifier appended to a hospital visit by the same physician that performs a surgery during the same hospitalization. Five Days Later: January 15 th, 2004 Five days following the procedure the patient develops a fever and sepsis and requires a second procedure. On day 5 the CPT is repeated. Dr. Smart Ethical Biller bills Poorpayer Insurance Company as follows:

6 The -58 modifier is used because at the outset (prospectively), Dr. Biller recognized that an additional procedure (s) might be necessary and dictated that information in his first op-report. CPT pays 100% of the allowed fee and restarts the 10-day global period. The 58 modifier is defined as follows by CPT 2003:Staged or Related Procedure or Service by the Same Physician During the Postoperative Period: The physician may need to indicate that the performance of a procedure or service during the postoperative period was: a) planned prospectively at the time of the original procedure (staged); b) more extensive than the original procedure; or c) for therapy following a diagnostic surgical procedure. This circumstance may be reported by adding the modifier -58 to the staged or related procedure, or the separate five digit modifier may be used. Note: This modifier is not used to report the treatment of a problem that requires a return to the operating room. See modifier -78. Note that -78 modifier was not used in this case, since the second procedure was not performed due to a complication of the first procedure but was anticipated at the time of the initial service. Day 12: January 22, 2003 Mrs. Multiple Complaints is a glutton for punishment and wants Dr. Smith to operate on her right heel while she in the hospital. Dr. Ethical Smart Biller is usually smart, but is under extreme financial pressure as he just got the bill for his kid s college tuition. Dr. Biller performs an endoscopic plantar fasciotomy on the right heel, one week after the Dr. Biller bills Poorpayer Insurance Company as follows: RT RT -79, since it is unrelated to the second Day 17: January 27, 2003 Of course, Mrs. Multiple Complaints develops a post-op infection, and 5 days after the endoscopic procedure returns to the OR for another I and D. Dr Biller bills Poorpayer Insurance Company as follows: RT -78 This third I and D procedure for the post op complication does not reset the global period for the and only the intra-op portion of the third is paid.. The 78 modifier is defined as follows by CPT 2003: Return to the Operating Room for a Related Procedure During the Postoperative Period: The physician may need to indicate that another procedure was performed during the postoperative period of the initial procedure. When this subsequent procedure is related to the first, and requires the use of the operating room, it may be reported by adding the modifier -78 to the related procedure, or by using the separate five digit modifier (For repeat procedures on the same day, see -76 ).

7 The moral of the story is what a famous Medicare carrier medical director taught me in Provide only medically necessary procedures, document them thoroughly, and bill for everything you do!