Neurology & Pain Management Coding Alert

If a physician conducts diagnostic tests or other services using equipment she doesn't own, modifier -26 (Professional component) is appropriate to indicate that she provided only the physician component (the administration or interpretation) of the service. But using modifier -26 in the facility setting is not always so straightforward. By reviewing CPT and CMS guidelines, you can easily append the modifier like a pro, every time.

Appendix A ("Modifiers") of CPT explains that some procedures are a combination of a a technical component and a physician (or professional) component. If the physician provides both components of the service, he or she may report the appropriate CPT code with no modifiers. But "When the physician component is reported separately," CPT specifies, "the service may be identified by adding modifier '-26'to the usual procedure number." In the latter case, the facility providing the equipment may claim the "technical component" of the service (the cost of equipment, supplies, technician salaries, etc.) by reporting the appropriate CPT code with modifier -TC (Technical component) appended.

Many radiologic and diagnostic procedures requiring specialized equipment contain a professional and technical component, but the surest way to tell is to consult the CMS Physician Fee Schedule. Check the far left-hand column that lists each individual CPTcode. If the fee schedule lists separate values for the code with modifiers -26 and -TC, modifier -26 is appropriate for that code if the physician provides only the service's professional component.

For example, the fee schedule lists values for both professional and technical components (0.26 and 0.89 relative value units, or RVUs, respectively) for nerve conduction study code 95903 (Nerve conduction, amplitude and latency/velocity study, each nerve; motor, with F-wave study). In other words, the full value of the code (1.15 RVUs) includes performance of the study, interpretation and report, as well as a fee for equipment, staff, etc. Therefore, if the neurologist performs the test using equipment owned by a hospital or other facility and provides interpretation only, he must append modifier -26 to 95903. The facility will bill separately, appending modifier -TC to 95903 to receive compensation for use of its equipment. If the neurologist fails to append modifier -26 and the facility nonetheless bills with modifier -TC, the technical portion of the service will have been double-billed, which could lead to accusations of fraud or a demand for repayment.

When determining if modifier -26 is appropriate, it's not always as simple as asking, "Does the physician own the equipment?" When billing Medicare, for instance, physicians providing services in a hospital or facility setting cannot claim the technical portion of a procedure regardless of whether he or she owns the equipment, says Neil Busis, MD, chief of the division of neurology and director of the neurodiagnostic laboratory at the University of Pittsburgh Medical Center at Shadyside, and clinical associate professor in the department of neurology, University of Pittsburgh School of Medicine.

For instance, if the neurologist performs electro-myography (EMG) and/or nerve conduction studies (NCS) on a hospital inpatient using his own machine, he must append modifier -26 because the facility receives reimbursement for equipment, etc., under the diagnosis-related group (DRG). The hospital DRG, by law, covers the technical component of Medicare services for inpatients.

Similarly, if the physician's own technician (that is, a technician employed by the physician), or the physician himself, performs the test in a facility setting, the physician nonetheless may claim only the professional component because Medicare rules require that payment for nonphysician services provided to hospital patients be paid only to the hospital. This requirement applies even if the physician performs the service for a hospital patient in his or her office. In fact, for Medicare, the only time that you don't use modifier -26 is for outpatients using your own equipment. This rule does not apply to other payers unless they follow the DRG policy.

A physician can still receive reimbursement for inpatient testing. Although the physician cannot bill the carrier for the technical component under the DRG system, he may either bill the facility or establish a separate contract with it to receive the appropriate reimbursement, Busis suggests. This would apply in cases when the physician:
1. owns the equipment
2. employs the technician who performs the test, or
3. personally performs the test.

Even if the hospital owns the equipment, if either 2 or 3 above is true, the physician can recoup some payment, but this will require some negotiation with the facility for which he is providing the tests.