Pathology/Lab Coding Alert

You can get stuck eating the costs of medically unnecessary tests for Medicare patients if you are not using advance beneficiary notice (ABN) modifiers. Even if you don't expect Medicare to pay for a test, you should bill for it. "Labs use modifiers to tell Medicare whether an ABN is on file," says Joyce Ludwick, clinical laboratory compliance consultant with Park City Solutions Laboratory Services Group in Ann Arbor, Mich. "Only then can Medicare inform patients whether they must pay for the service." Use modifiers when submitting claims to carriers on form CMS 1500. When you bill on UB92, certain condition and occurrence codes inform fiscal intermediaries (FI) of the ABN.

Use Modifier -GA for Signed ABN

You've secured a signed ABN because you know that Medicare probably won't cover a test based on medical necessity or frequency constraints. You must tell Medicare on form CMS 1500 using modifier -GA (Waiver of liability statement on file) appended to the CPT code for the test. For services billed to the FI, report occurrence code 32 on the UB92 to inform Medicare that you have a signed ABN. Also report condition code 21, indicating that the service is excluded.

For example, if a physician sends a blood specimen for an iron test (83540, Iron) to "rule out" iron-deficiency anemia but provides no signs or symptoms that indicate medical necessity, then, before conducting the test, the lab should obtain a signed ABN.

To bill for the service, report 83540-GA on form CMS 1500. If Medicare denies the claim, the explanation of benefits (EOB) instructs the patient that he or she must pay the lab for the service. "Without the modifier, Medicare doesn't return the EOB that allows the lab to bill the patient," Ludwick explains. "In fact, Medicare will send the patient an EOB stating that they do not have to pay for the service."

For tests with frequency limits such as Pap smears, labs may routinely acquire signed ABNs. Labs are not responsible for keeping track of how many times a patient has received a specific service. Use modifier -GA in these cases as well.

Use Modifier -GY for Statutorily Noncovered Tests

Labs are not required to get a signed ABN for a statutorily noncovered service, such as most screening tests. But according to Ludwick, it is often in the lab's best interest to present ABNs for noncovered tests to inform patients of their liability. Then report the CPT code with modifier -GY (Item or service statutorily excluded or does not meet the definition of any Medicare benefit).

For example, if a physician orders a lipid panel (80061) for an asymptomatic patient who is "worried about cholesterol," it is considered a screening and is not covered. You may choose to get a signed ABN and use modifier -GY to inform the carrier, or condition code 21 for the FI. "Medicare generates a denial notice that the patient may use to seek payment from secondary insurance," Ludwick says. This is known as a "no-pay" claim.

Use Modifier -GZ Sparingly

"You don't want to be in the position to use modifier -GZ, because it means that you probably won't get paid for the service," Ludwick cautions. Use -GZ (Item or service expected to be denied as not reasonable and necessary) when you expect Medicare to deny the claim but you do not have a signed ABN. Establish a protocol to ensure that you identify ABN needs before the test is run, so you won't find yourself having to report it.

"However, by notifying Medicare using modifier -GZ, you reduce the risk of allegations of fraud or abuse when filing claims that are not medically necessary," Ludwick says.