Medicare Payments for Part B Claims with G Modifiers

WHY WE DID THIS STUDY

Providers and suppliers use G modifiers to alert Medicare when they bill for services or items that they expect to be denied as either not "reasonable and necessary" (GA and GZ modifiers) or because they are not covered by Medicare (GY and GX modifiers). They may use these modifiers when they are uncertain about whether a claim should be paid. For example, a provider may not know whether a beneficiary already had a particular laboratory test that Medicare covers only once a year or a supplier may suspect that the beneficiary already has the item it is providing. Providers and suppliers may also use these modifiers when they are certain that the claim should not be paid, for example, when the beneficiary may need Medicare to deny the claim so that it can be submitted to the beneficiary's secondary insurance. In a 2009 report, OIG raised concerns about the use of GA and GZ modifiers and about Medicare inappropriately paying for some claims with these modifiers. The report looked at claims for pressure reducing support surfaces and found that Medicare paid for 72 percent of all pressure reducing support surface claims with GA or GZ modifiers. This amounted to over $4 million in potentially inappropriate payments.

HOW WE DID THIS STUDY

We analyzed all Part B claims with GA, GZ, GX, or GY modifiers from 2011. We also interviewed staff at CMS and selected claims processing contractors about how they process claims with these modifiers.

WHAT WE FOUND

In 2011, Medicare paid nearly $744 million for Part B claims with G modifiers that providers expected to be denied as not reasonable and necessary or as not being covered by Medicare. We found vulnerabilities in how Medicare pays for these claims. When processing claims, contractors often do not consider the modifiers that providers use to indicate that they expect the services or items to be denied as not reasonable and necessary. Contractors also do not always consider the modifiers that providers use to indicate that services or items are not covered by Medicare. Although contractors have checks that affect some of these claims, such as determining whether the services and items met Medicare frequency limitations, they do not specifically check for claims for which providers expect not to be paid. Further, we found that Medicare paid $4.1 million for claims that included inappropriate combinations of G modifiers from 2002 to 2011. This report does not contain recommendations.