Pathology/Lab Coding Alert

Get more specific with 4 new X{EPSU}modifier options.

If your lab or pathology practice has come to depend on modifier 59 (Distinct procedural service), you’ll need to rethink that practice when Jan. 1, 2015 rolls around.

Here’s why: Frequent modifier 59 misuse has driven CMS to create four new, more precise modifier options for reporting your distinct service claims. Read on to make sure you don’t get caught short and miss legitimate pay opportunities for your lab next year.

59: Always the Last Resort

When your pathologist works on specimens from different body sites or operative sessions, you’re probably used to using modifier 59 if Medicare’s Correct Coding Initiative (CCI) bundles the two services. But CMS says that many providers misuse modifier 59 for overriding edit pairs, making modifier 59 the source of a projected one-year error rate of $770 million (Transmittal R1422). 

The problem: You should not use modifier 59 to get around the edits under many circumstances. And even if you meet the criteria to legitimately override an edit pair, you should not look to 59 as your first-choice modifier. 

“Modifier 59 is to be used when there is no better modifier choice,” says Lynn M. Anderanin, CPC,CPC-I, COSC, ICD10, senior director of coding compliance and education for Healthcare Information Services in Park Ridge, Ill.

CMS points out the following three common reasons for why you use modifier 59, along with the associated error odds, according to MLN Matters article MM8863:

• Infrequently used to identify a separate encounter, typically used correctly
• Less commonly utilized to define a separate anatomic site, less often used correctly
• Commonly used to define a distinct service, but frequently done so incorrectly.

Say Hello to “EPSU” Modifiers

Here’s how CMS explains the problem and the solution, according to an MLN Matters article.

Problem: “The 59 modifier often overrides the [CCI] edit in the exact circumstance for which CMS created it in the first place,” CMS states. 

Solution: “CMS believes that more precise coding options coupled with increased education and selective editing is needed to reduce the errors associated with this overpayment.”

To that end, CMS debuts the following new modifiers for 2015, known as the “X{EPSU}” modifiers:

• XE — Separate encounter, A service that is distinct because it occurred during a separate encounter
• XP — Separate practitioner, A service that is distinct because it was performed by a different practitioner
• XS — Separate structure, A service that is distinct because it was performed on a separate organ/structure
• XU — Unusual non-overlapping service, A service that is distinct because it does not overlap usual components of the main service.

Pick the Best-Fitting Modifier

Although the new modifiers will replace modifier 59 in specific instances, CMS won’t cease accepting 59 in 2015. But you should never use 59 and one of the X{EPSU} together for the same claim. That’s because the new modifiers define specific subsets of the 59.

“CMS will continue to recognize the 59 modifier in many instances, but may selectively require a more specific X{EPSU}modifier for billing certain codes at high risk for incorrect billing,” states the MLN Matters article.

Future: CMS eventually plans to institute edits that will allow the XE modifier to separate a specific CCI edit pair, but won’t accept modifier 59 or XU to separate that particular pair. As a way of easing into the new modifiers, CMS will initially accept either modifier 59 or the X{EPSU} modifier for a service. 

Alert: “The rapid migration of providers to the more selective modifier is encouraged,” the MLN Matters article notes. In fact, MACs can start requiring the more specific modifiers in place of modifier 59 at their convenience, so keep an eye out for local requirements.

“I believe these modifiers will be required by the Medicare contractors,” says Suzan Berman (Hauptman), MPM, CPC, CEMC, CEDC, director of coding operations-HIM at Allegheny Health Network in Pittsburgh, Pa. “From a private payer prospective, it will be interesting to see which payers follow suit. It makes sense from several different angles included statistical, patient outcomes based, reimbursement, and clean claims processes.”

Anticipate X{EPSU} Impact for Your Lab

Once the new modifiers go into effect, you can expect to change how your report together certain bundled services, when appropriate.

For instance: The pathologist performs a prepared-slide consultation for a prior simple mastectomy case, and on the same date, performs a surgical pathology exam of a lymph node biopsy from the same patient. 

Do this: You’ll need to use a modifier to report both services together, because CCI bundles 88305 (Surgical pathology, gross and microscopic examination, Lymph node, biopsy) as a column 2 code with 88321 (Consultation and report on referred slides prepared elsewhere). Currently, you’d use modifier 59 to unbundle the services. With the advent of the X{EPSU} modifiers, you might choose XE next year instead of 59, depending on the payer. 

Look for payment impact: “I think [the new modifiers] will affect reimbursement,” says Monica Gourley, CCS, HCS-D, clinic coder at Klickitat Valley Health Services in Goldendale, Wash. 

If your lab was part of the myriad providers that CMS says has been erroneously using modifier 59, reporting the more specific modifiers could help you cut down on errors. And that could mean cleaner claims and audit protection, even if you see a near-term payment downside.

Resources: To read the transmittal, visit www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1422OTN.pdf. To read the MLN Matters article, visit www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM8863.pdf.