The Case of the Missing Modifier: 4 Clues as to Why Medicare is Denying Your Claims

Missing modifiers are the worst—because when these pesky buggers don’t appear correctly on your claim forms, they can cause claim denials, which can back up your billing department and, ultimately, hurt your bottom line. While we usually can’t tell you exactly why Medicare slapped you with a denial notice on a particular claim, we can help you troubleshoot the cause. That way, you can ensure you’re submitting clean claims—with the correct modifiers—going forward. With that in mind, here are four clues as to why you’re not getting paid (plus, a KX modifier definition and clarification about the new X modifiers):

1. You’re providing services to a patient who has exceeded the therapy cap—and those services are either not medically necessary or you forgot to attach the KX modifier.

Before you see a new Medicare patient, you should determine whether that patient has received any other therapy services during the current benefit period so you know where he or she is in relation to the therapy cap. As we explained in this guide, you can use the allowable fee schedule to approximate a patient’s running total toward the cap. If the patient is unable to provide you with his or her history of therapy services, you can request it from your MAC. It’s important to note, though, that the “amount that goes toward the limit reflects the date of claim receipt, not the date of service.”

Going Above the Cap When Your Services Are Medically Necessary

Medicare will cover therapy services above the cap if—and only if—those services are medically necessary. In this case, you’ll need to attach the KX modifier to your claim and ensure your documentation supports your decision to continue treatment. According to this APTA document, by doing so, you’re telling Medicare that the services you’re billing for:

• are appropriate for the cap exception;
• are reasonable and medically necessary;
• require the skills of a licensed therapist; and
• are supported by documentation in the patient's medical record.

This is what’s known as the therapy cap automatic exceptions process. You can use this process to treat—and receive payment for services—beyond the cap until the patient reaches the manual medical review threshold, which is currently $3,700. To learn more about billing for services beyond this threshold—and how the process differs depending on whether you’re in a pre-payment or post-payment review state—check out this guide.

Going Above the Cap When Your Services Aren’t Medically Necessary.

If a patient wants to continue receiving therapy services beyond the cap—and you don’t feel those services are medically necessary—then you can provide treatment on a self-pay basis. In this case, you should issue an Advance Beneficiary Notice of Noncoverage (ABN)—which, as explained in this post, notifies the patient that Medicare may not cover the services he or she is about to receive—before you begin treatment. By signing an ABN, the patient is acknowledging that he or she may be financially responsible for the cost of the services. Even with an ABN on file, you should still submit a claim to Medicare—and, when you do, apply a GA modifier to your claim. As explained in this FAQ, “This should prompt Medicare to deny the claim, at which point you can collect payment directly from the patient. You will need to apply this modifier for every visit (i.e., each time you submit a claim).”

2. You used an ABN-related modifier on a lot of claims, because you’ve issued ABNs to all your patients—just to be safe.

As WebPT’s Zach Colick explains in this post, issuing blanket ABNs is a big “no-no.” That’s because “ABNs are only appropriate if the services you are providing are either noncovered or non-medically necessary.” In other words, reserve them (and their modifiers) for when you really need them. Don’t use ABNs as catch-alls. Otherwise, you may increase your risk for an audit.

3. You billed two services that form a CCI edit pair.

The National Correct Coding Initiative (NCCI) has identified procedures that therapists routinely perform together. These are known as “edit pairs.” (You can find a list of therapy-related CCI edit pairs in this blog post.) If you bill two CPT codes that form one of these pairs, you’ll receive payment for only one of the codes. However, if you provided these services wholly separate and distinct from one another, you can attach modifier 59 to alert Medicare that you should receive payment for both. For more on modifier 59—including guidance on how to apply modifier 59 within WebPT—check out the modifier section of this FAQ post.

A Quick Note About the New X Modifiers

Early last year, CMS introduced a new set of modifiers—known as X modifiers—in order to “define specific subsets” of modifier 59. However, according to the APTA, therapists should still continue using modifier 59 until further notice. For more information about these new modifiers, check out this post.

4. You forgot to identify your patient’s primary functional limitation—and its severity.

Functional limitation reporting is a Medicare initiative that requires therapists to report their patients’ functional limitation data in the form of G-codes and corresponding severity modifiers (i.e., CH, CI, CJ, CK, CL, CM, CN) at the patient’s initial evaluation, at minimum every tenth visit (or progress note), and at discharge. If your claim doesn’t contain two FLR G-codes, each followed by a severity modifier, then Medicare may very well deny your claim—and there won’t be much you can do about it (unless, of course, you actually did identify your patient’s primary functional limitation, complete an outcome measurement tool, and document it all appropriately, but accidentally left the codes off the claim). If you performed the required functional reporting steps but merely forgot to attach the corresponding codes and modifiers, then you may want to reach out to your local MAC or a compliance expert to determine whether it would be appropriate to create an addendum with the missing codes and resubmit the claim. Keep in mind, though, that doing so could throw up a red flag to Medicare and increase your risk of an audit. In any case, don’t go back and change your documentation to meet FLR requirements. The risk simply is not worth the potential reward.

Still stumped as to why Medicare denied your PT, OT, or SLP claim? Give us the specifics in the comment section below—without providing any identifiable patient information—and we’ll help you sleuth the solution.