Medicare Report: Modifier -51 Misuse Leading to Underpayments

Medicare has identified frequent misuse of modifier -51 that is leading to underpayments.

This is according to a recent issue of Medicare Quarterly Provider Compliance Newsletter (pdf), a newsletter from CMS developed to help providers understand the major findings identified by Medicare administrative contractors, recovery auditors and other governmental organizations, such as the Office of Inspector General.

As the newsletter notes, when multiple surgical procedures are performed (multiple surgeries are defined as separate procedures performed on the same patient at the same operative session or on the same day for which separate payment may be allowed), Medicare Physician Fee Schedule (MPFS) rules state that the second and any subsequent procedures are subject to reduced reimbursement. Providers are instructed to report modifier -51 (multiple procedures) to identify such services. When only one surgical procedure is performed and modifier -51 is claimed, the reimbursement is inappropriately reduced by 50%.

CMS provides the following as two examples of erroneous billing:

1. Erroneous coding leads to billing error. Physician billed one procedure with HCPCS code 36475 (Endovenous ablation therapy of incompetent vein, extremity), and modifier -51 (multiple procedures) for date of service August 3, 2010. No other physician services were billed for this date of service.

Finding: The billing error resulted in an underpayment of $669.25.

2. Erroneous coding leads to billing error. Physician billed one procedure with HCPCS code 47120 (partial removal of liver) and modifier -51 (multiple procedures) for date of service June 25, 2012. No other physician services were billed for this date of service.

Finding: The billing error resulted in an underpayment of $1,230.47.

Guidance

To avoid these problems, CMS advises providers and their billing representatives to use caution when using modifier -51. It is inappropriate to use multiple procedure modifiers when there is no second procedure performed.

CMS advises providers to review the "Medicare Claims Processing Manual," Chapter 12, Section 40.6, and Chapter 23, section 30, available at www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS018912.html to better understand the billing regulations.

If your organization is struggling with modifier and other coding and billing rules, consider outsourcing your billing to a company like PGM Billing, one of the leading outsourcing medical billing vendors. PGM has more than 30 years of experience providing clinical billing services. Contact PGM today to find out how outsourcing your billing can improve your compliance with coding and billing rules and increase your bottom line.


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