Automatic denial of codes billed with –GA modifier

Judith previously discussed Transmittal R1840CP implementing a new modifier and instructions for voluntary use of Advanced Beneficiary Notices (ABNs).  This week I’d like to highlight another part of that transmittal that could have a big operational impact for hospitals.

CMS is changing how line items billed with the modifier –GA are processed.  The –GA modifier is used to indicate an ABN was given.  Under the new instructions, it is only used for mandatory ABNs.  Effective April 1, 2010, the claims processing system will automatically deny lines with the –GA modifier and assign liability to the beneficiary, who will have a right to appeal.   Currently, the –GA is processed through medical review modules and the line denies only if no covered diagnosis is reported.

The automatic denial of these lines presents a potential problem for certain diagnostic services, particularly radiology services.  In some cases the treating physician might provide a sign or symptom that is not covered under medical necessity policies, but upon completion of diagnostic testing a covered definitive diagnosis is discovered.  At the time the patient presents with a non-covered diagnosis, an ABN should be issued.  However, if a more definitive diagnosis is identified by the physician interpreting the diagnostic test, that diagnosis should be reported on the claim.  In that case, it turns out the ABN was not necessary because Medicare will cover the service.  However, many hospitals do not do a second screening related to the ABN to ensure that it is still necessary and simply continue to report they provided the ABN with the 32 occurrence code and the –GA modifier.

Currently, this does not present a problem because the line item billed with the –GA modifier will pass through medical review and be paid based on the reported covered diagnosis.  However, beginning April 2010 this will no longer be the case because CMS has indicated that the line will automatically deny, rather than going through medical review.  This mean that services that are otherwise covered, and are even reported with a covered diagnosis code, will now automatically deny and be returned as beneficiary liability, rather than being paid by Medicare.

Assuming the –GA need not be reported if a covered diagnosis code is confirmed by the interpreting physician, hospitals will still need to implement a process to find these claims that have a covered diagnosis and strip the –GA modifier off before submission.  This will be no easy task for many providers who have very manual processes for checking medical necessity.  They will need to check the final diagnosis against medical review policies for each service an ABN was given, to determine if the ABN was still necessary after the interpretation of the test.  Because this problem is more likely for radiology services, where a physician interprets the test and reports their impressions, hospitals may wish to focus on their high dollar radiology services.

Note, if the service is covered based on a new diagnosis coded after the ABN was given, presumably the –GA would not need to be reported because the ABN was no longer mandatory, however, this is not entirely clear.  CMS has taken the position in the past that the provider should follow the beneficiary’s choice on the ABN, even if it’s to their detriment, so it is unclear whether they may take the position in this case that if an ABN was given, the –GA must be reported.  If any more information becomes available, we will share it in a future blog post.

Next week should be a light week from CMS.  Not only is Christmas this week, but a couple feet of snow dumped on Baltimore this weekend so CMS should be pretty quiet.  Happy Holidays to all our blog readers out there, I hope you enjoy some treasured time with family and friends in the holiday season.