Pathology/Lab Coding Alert

All new GX and revised GA clarify liability statement.

Ever since CMS rolled the Notice of Exclusion of Medicare Benefits (NEMB) into the Advance Beneficiary Notice of Non-Coverage (ABN), labs have had trouble sorting out optional versus mandatory patient notification.

Here's help: Read on to determine when you may and when you must file an ABN, and how modifiers can help you identify the difference.

Zero In on Mandatory ABNs

"ABNs are mandatory when the provider believes that Medicare may not determine the service to be 'reasonable and medically necessary,'" says Genevieve Tang, reimbursement consultant at Quorum Consulting, a healthcare consulting company in San Francisco. That means you would need to have an ABN on file in the following circumstances, according to Tang:

• The test exceeds the local Medicare contractor's utilization frequency limits
• The Medicare contractor has a Local Coverage Determination (LCD) or article that explicitly establishes noncoverage for the test.

Do this: When the ABN is mandatory, you should report modifier GA (Waiver of liability statement issued as required by payer policy).

Recognize change: That's a new definition for modifier GA, effective April 1. Prior to that date, the definition was the wording you'll still find in your CPT book -- Waiver of liability statement on file.

Until CMS changed modifier GA, you would have used the modifier when you issued an ABN for either required or voluntary reasons, according to Zia Clarkson, a coding, reimbursement, and practice management consultant in Long Island, N.Y.

Based on the new definition, you should only use modifier GA when you have a mandatory ABN due to a non-coverage policy or frequency limit.

Modifier GX Points to Voluntary ABN

Don't miss: "A non-coverage policy for a test does not equate to statutory non-coverage by Medicare," Tang clarifies.

When a test is statutorily non-covered you're not required to issue an ABN. "In general, the only diagnostic tests that are not covered under Medicare statute are screening tests in the absence of disease signs/symptoms," Tang says -- with some exceptions for explicitly authorized screenings such as diabetes screening.

Many labs choose to give an ABN for statutorily non-covered tests, however, to ensure that the patient understands that Medicare won't pay and perhaps to assist with secondary insurance coverage. In those cases, you would issue a voluntary ABN -- what used to be an NEMB.

Cut confusion with modifier: Ever since Medicare abolished the NEMB and allowed providers to use a voluntary ABN in its place, providers -- and payers -- have had trouble distinguishing mandatory and voluntary ABNs. That's why CMS alters the GA definition and provides the new modifier GX (Notice of liability issued, voluntary under payer policy), effective April 1.

Bottom line: Use modifier GX when you're issuing an ABN that would have been an NEMB in the past.

Know What to Expect When Medicare Processes GA/GX Claims

When your lab bills a test with modifier GX, your Medicare payer will automatically deny the claim as a "beneficiary liability," according to Tang.

Issuing the ABN and filing with modifier GX will result in a Medicare denial explanation of benefits (EOB), which a secondary insurer may require for coverage.

GA is different: On the other hand, when your lab bills a test with modifier GA, Medicare's action depends on whether you're using the UB-04 or CMS-1500 claim form, as follows:

• For hospital-based labs using UB-04, Medicare payers will automatically deny the claim as a beneficiary liability, and the right to appeal lies with the patient, not the provider, according to Tang.
• For independent labs filing on CMS-1500, Medicare payers will not automatically deny the claim, but will mark it for medical necessity review. "If denied, the provider may decide to either file an appeal or bill the patient," Tang says.

Resources: You can read more about these modifiers and related changes to the Medicare Claims Processing Manual at www.cms.hhs.gov/MLNMattersArticles/downloads/MM6563.pdf and www.cms.gov/transmittals/downloads/R1921CP.pdf.