Pathology/Lab Coding Alert

With the Office of Inspector General (OIG) encouraging CMS to institute stricter reviews for modifier 59 (Distinct procedural service) claims, you need to make sure you're using it correctly.

Missteps on modifier 59 claims could mean lost $$ or fraud charges when your pathologist bills services bundled under CMS's Correct Coding Initiative (CCI).

On March 11, the OIG released its 202-page Compendium of Unimplemented OIG Recommendations, which revealed that many OIG suggestions have been ignored.

Case in point: In 2003, the OIG found a 40 percent error rate on claims that contained modifier 59 when used to separate CCI edits, resulting in Medicare paying $59 million in improper payments.

The OIG report suggested that CMS should update carriers' claims processing systems so they pay claims with modifier 59 only when the modifier is billed with the correct code. The OIG now says that CMS has not yet instituted such system edits, and notes that it will continue to monitor CMS's efforts to implement edits to ensure correct coding.

What this means: The OIG lists modifier 59 as a priority nearly every year, and it's possible that the agency feels that CMS should be looking more closely at its use, says Randall Karpf, coding consultant with East Billing in East Hartford, Conn. The bottom line is that if all of these entities are watching modifier 59, make sure you're using it properly.

You can make sure you're using modifier 59 correctly by following these rules:

• Only use 59 when your pathologist performs bundled services on separate specimens from distinct body sites or operative sessions.
• Once you meet the distinct service criteria, you can only override the edits when CCI lists a code pair with a '1' modifier indicator, says Stacey Hall, RHIT, CPC, CCS-P, RCC, director of corporate coding for Medical Management Professionals Inc. in Nashville, Tenn. You can't use modifier 59 when the CCI lists a code pair with a 0 modifier indicator.
• Make sure you append modifier 59 to the column 2 code when you legitimately use the modifier to override aCCI edit pair.