CMS Establishes New Modifiers to Define Subsets of -59 Modifier

CMS announced last month that it is establishing four new HCPCS modifiers to define subsets of the -59 modifier.  To review, providers may currently use the -59 modifier to indicate that a code represents a service that is separate and distinct from another service with which it would usually be considered to be bundled.  According to CMS, because of its broad application, the -59 modifier is the most widely used modifier and has become associated with abuse and high levels of manual audit activity.  CMS has asserted that some providers incorrectly consider it to be the “modifier to use to bypass National Correct Coding Initiative (NCCI)”.

In its transmittal announcing the new modifiers, CMS referenced 2013 CERT Report data which stated a projected $2.4 billion in MPFS payments were made on lines with modifier -59 with a projected 13.3% error rate.  In facility payments, primarily OPPS, a projected $11 billion was billed on lines with modifier -59 with a projected 4.1% error rate.  That equates to a one-year projected error rate of $770 million.  (CMS acknowledges that other errors can and do exist on lines with -59 modifiers and that while the projected errors are not entirely due to incorrect -59 modifier usage, even if 10% of the errors on -59 lines are attributable to incorrect usage, that still amounts to a $77 million overpayment per year.)

CMS states that the primary issue associated wth the -59 modifier is that it is defined for use in a wide variety of circumstances, such as to identify different encounters, different anatomic sites, and distinct services.  According to CMS, usage to identify separate encounters is infrequent and usually correct; usage to define a separate anatomic site is less common and “problematic”; and usage to define a separate service is common and not infrequently overrides the edit in the exact circumstance for which the edit was created in the first place.

As a result, CMS has defined four new HCPCS modifiers to selectively identify subsets of Distinct Procedural Services (-59 modifier):

XE Separate Encounter:  A service that is distinct because it occurred during a separate encounter
XS Separate Structure:  A service that is distinct because it was performed on a separate organ/structure
XP Separate Practitioner:  A service that is distinct because it was performed by a different practitioner
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 modifiers will be collectively referred to as –X{EPSU} modifiers.  CMS will continue to recognize the -59 modifier but notes that CPT instructions state that the -59 modifier should not be used when a more descriptive modifier is available.  CMS may selectively require a more specific –X{EPSU} modifier for billing certain codes, e.g. a particular NCCI PTP code pair may be identified as payable only with a specific –X{EPSU} modifier but not the -59 modifier.  CMS has also indicated that because the –X{EPSU} modifiers are more selective versions of the -59 modifier, it would be incorrect to include both modifiers on the same line item.

Now, for those of you familiar with the NCCI edits for physical and occupational therapy, you will no doubt appreciate the fact that some of the current edits do not make a lot of sense, such as 97140 with 97530.  These codes are often billed together in therapy and are certainly separate and distinct services with components that do not overlap when performed and documented appropriately as per their code descriptions.  Generally speaking, it is not that therapists are looking to inappropriately circumvent problematic NCCI edits, but rather the fact that some of the edits are not “problematic” at all.  Nonetheless, therapists are required to use the -59 modifier for these separate and distinct services in order for these services to be reimbursed.

As we prepare for the January 1^, 2015 effective date for these new modifiers, we will be looking to CMS for additional guidance on the appropriate use of the modifiers for therapy scenarios.  It remains to be seen at this point if CMS will direct therapists to still use the -59 modifier for NCCI edits or if they will be encouraged to use the XU modifier when distinct services do not overlap.  Stay tuned for more information.

(Transmittal 1422 can be accessed by clicking HERE.  MLN Matters article MM8863 can be accessed by clicking HERE.)