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Use of modifier -59 replacement still confusing despite new guidance

JustCoding News: Outpatient, February 18, 2015

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By Debbie Mackaman, RHIA, CPCO, CCDS
Providers have been under CMS, Office of Inspector General (OIG), and other contractors’ scrutiny for years regarding the use–and sometimes abuse–of modifier -59 (distinct procedural service) to bypass National Correct Coding Initiative (NCCI) edits for certain CPT®/HCPCS code pairs billed for the same date of service.
In August 2014, CMS introduced four new, more specific modifiers in Transmittal 1422 to replace modifier -59 and clear up the confusion for both providers and auditors on how it's being applied. Unfortunately, due to a lack of examples and guidance, many providers are now more confused than ever on how to report modifier -59 and these new modifiers.
A brief history of modifier -59
In November 2005, the OIG released a report, "Use of Modifier -59 to Bypass Medicare's National Correct Coding Initiative Edits", which found that 40% of code pairs billed with modifier -59 in 2003 did not comply with reporting requirements and led to $59 million in improper payments.
Since most of the errors were due to services that were not distinct from each other or not documented sufficiently, the OIG recommended carriers perform pre- and post-payment audits of modifier -59 use. The OIG also recommended carriers update their claims processing systems to ensure providers bill the modifier with the correct code in the NCCI code pair. 
Based on another study by the OIG, CMS responded in December 2009 stating it would explore a system edit for modifier -59. CMS had issued Transmittal R902CP in 2006, which contained guidance on the matter.
However, it was limited to drug infusions and CMS abandoned further development of a specific edit because the agency thought it would increase appeals volume.
Fast forward to 2014. CMS released Transmittal 1422, which states modifier -59 is:
  • Infrequently (and usually correctly) used to identify a separate encounter
  • Less commonly (and less correctly) used to define a separate anatomic site
  • More commonly (and frequently incorrectly) used to define a distinct service
Using data from the 2013 Comprehensive Error Rate Testing (CERT) report, the transmittal describes:
  • A projected $2.4 billion in Medicare Physician Fee Schedule (MPFS) payments were made on lines with modifier -59, with a $320 million projected error rate. In facility payments, primarily OPPS, a projected $11 billion was billed on lines with a -59 modifier with a projected error of $450 million. This is a projected one year error of $770 million.
  • Note this is not entirely due to incorrect -59 modifier usage as other errors can and do exist on a -59 line. However, it has been observed that incorrect modifier usage was a major contributor although error code definitions do not allow an exact breakdown. If 10% of the errors on -59 lines are attributable to incorrect -59 modifier usage, it still amounts to a $77 million per year overpayment as a result.
CMS’ solution to this ongoing problem was to introduce four new modifiers to replace modifier -59, in most instances:
  • -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; and,
  • -XU, unusual non-overlapping service, the use of a service that is distinct because it does not overlap usual components of the main service.
According to CMS, the new modifiers would be activated January 1, 2015, for providers, but contractors could choose to implement them as soon as they wished.
This announcement appeared to be a bit premature, when CMS stated in an October 2014 MLN Connects Provider eNews that providers would have the option to continue using modifier -59 until CMS issues examples of circumstances in which the new modifiers, collectively known as –X {EPSU}, are or are not appropriate. 
On January 22, 2015, CMS released MLN® Special Edition article SE1503, Continued Use of Modifier 59 after January 1, 2015.  Most providers have been waiting for this guidance since CMS first announced the new –X {EPSU} modifiers in August 2014. Unfortunately, it does little to give physicians, hospitals, and durable medical equipment providers direction on the proper use of the new modifiers, which will continue to be under the same—if not more—scrutiny than modifier -59. 
The guidance states providers may continue to appropriately use modifier -59 after January 1, 2015, and Medicare Administrative Contractors (MACs) should be able to accept the -X {EPSU} modifiers. CMS says additional guidance and education will be forthcoming as it continues to introduce the new modifiers in a “gradual and controlled fashion,” although CMS previously stated that “rapid migration” was encouraged.
The article goes on to state future guidance will include additional descriptive information about the new modifiers and will also identify situations in which a specific -X {EPSU} modifier will be required. 
Available guidance
Providers should check with MACs to see whether they are accepting these new modifiers and whether they've created any guidance for applying them. While it might hopefully provide some clarification, that may not necessarily be the case.
Novitas Solutions, the MAC for two jurisdictions, recently released guidance based on CMS' preexisting modifier -59 example article. The Novitas release looks at each example provided by CMS and which new modifiers may now be more appropriate.
For example, a provider performs the following procedures:
  • 47370, laparoscopy, surgical, ablation of one or more liver tumor(s); radiofrequency
  • 76942, ultrasonic guidance for needle placement (e.g., biopsy, aspiration, injection, localization device), imaging supervision and interpretation
CMS states that modifier -59 should not be appended with 76942 if the ultrasonic guidance is for needle placement for the laparoscopic liver tumor ablation procedure, but may be reported if the guidance is unrelated.
For this situation, Novitas says that beginning January 1, 2015, modifier -XU may be the more appropriate modifier. While CMS does not define what it means by "unusual, non-overlapping" in its description for modifier -XU, this makes sense if the second procedure is unrelated and is not performed during the same session.
In another example, CMS states that treatment of posterior segment structures in the eye constitutes treatment of a single anatomic site. Modifier -59 should not be reported with the following codes if both procedures are performed during the same operative session because the retina and choroid are contiguous structures of the same organ:
  • 67210, destruction of localized lesion of retina (e.g., macular edema, tumors), 1 or more sessions; photocoagulation
  • 67220, destruction of localized lesion of choroid (e.g., choroidal neovascularization); photocoagulation (e.g., laser), 1 or more sessions
However, Novitas suggests that modifier -XU may be more appropriate in this instance. This raises several questions. If the structures are contiguous, and providers cannot report modifier -59 if they perform both procedures during the same session, how would –XU be more appropriate?
Modifier –XE might make sense here if the provider performed the procedures on the same day but during a different encounter, but neither CMS nor Novitas has suggested that.
The next confusing example involves the following two codes:
  • 34833, open iliac artery exposure with creation of conduit for delivery of aortic or iliac endovascular prosthesis, by abdominal or retroperitoneal incision, unilateral
  • 34820, open iliac artery exposure for delivery of endovascular prosthesis or iliac occlusion during endovascular therapy, by abdominal or retroperitoneal incision, unilateral
The CPT guidelines state that despite being different procedures, these codes should not be reported together if done on the same side of the body. CMS says that coders should not append modifier -59 to either code if the both procedures are done on the same side of the body.
However, CMS adds that modifier -59 may be reported if the two procedures are performed at separate anatomic sites or during different patient encounters on the same date of service to indicate they are different procedures. Further, it says that modifiers denoting laterality (-RT for right side of body and -LT for left side) may be used when the procedures are done during the same encounter.
Novitas suggests that modifiers -XE or -XS may be more appropriate to use in this instance, but that again raises questions. CPT guidelines advise coders to use the most appropriate modifier available. If the procedures are performed on different sides of the body, -RT and -LT would appear to be more accurate than using -XS.
The good news in all of this is CMS says it will publish specific guidance before implementing edits or audits. I am not sure this will produce a warm, fuzzy feeling for providers striving to be in compliance with NCCI edits and struggling to train staff on the appropriate use of the new modifiers. Since CMS announced the -X{EPSU} modifiers, providers have been on a never-ending rollercoaster ride and it doesn’t appear they are going to be getting off any time soon.
What do you think is the most appropriate modifier to use for the above scenarios, based on the guidance available? Do you have more examples of confusing or conflicting guidance based on your own charts? Send them to CMS at NCCIPTPMUE@cms.hhs.gov and provide as much information as you can. Hopefully, CMS will be able to take those examples and provide clearer guidance on how and when to use these new modifiers.
Debbie Mackaman, RHIA, CPCO, CCDS is a regulatory specialist for HCPro, a division of BLR, in Danvers, Massachusetts. A former hospital compliance officer and HIM director, Mackaman has more than 24 years of experience in the healthcare industry, including both inpatient and outpatient prospective payment systems and critical access hospital documentation, chargemaster, and reimbursement issues.

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