Demystifying Modifiers

All of us have seen various modifiers used to bill HME equipment. They are on the explanation of benefits and in our software.

Unfortunately, many HME billers and those working aged accounts receivable do not really know what these modifiers are or why they are being used. In their training they may have been told, “Just add the KX or it won’t get paid,” but they never bothered to ask why or what it means. It’s also very possible that the person who did the training did not know the answer to these questions and was just doing what they were told when they were trained.

And often, our software automatically adds in modifiers, such as the capped rental modifiers KH, KI and KJ.

However, as with anything else in life, knowledge is power. Consequently, when you train, you should take the time to educate your billers about why a modifier is being used and the requirements for using it so they will be able to apply it properly in the future.

One of the results of not knowing how to use modifiers properly is the denial code PR/CO-4, which indicates the procedure code is inconsistent with the modifier uses or that a required modifier is missing. Another one you may have seen is PR/CO-B18, which indicates the procedure code/modifier was invalid on the date of service or claim submission.

If employees are not properly trained on modifiers, what they are, why they are used and how to use them properly, then you will most likely see these denials. More important, if employees are not properly trained and apply modifiers without knowing why, you may be getting paid but you could also be setting yourself up for a large overpayment.

Let’s assume you have merely instructed your employees always to attach a KX modifier whenever billing a CPAP. They do so and bill the item for 13 months, then convert it to a sale. You were paid each month but should you have been? By attaching the KX modifier, you are stating to Medicare that you have followed the policy and have all the documentation to back that up.

Now let’s go back and look. Your employees neglected to collect the beneficiary and physician letter after the third month but continued to bill using the KX. This goes against the Medicare policy, and you have now fraudulently billed using the KX modifier. Your employees did not know any better because all they were taught was to add the modifier, not why they had to put it on or the requirements necessary to use it. They did what they were told, but you, the owner, now have a compliance issue to deal with. A little education would have gone a long way in this case.

A list of modifiers can be found in the Medicare manual. (This is Appendix D in the Region C manual.) The modifiers are broken into sections including: oxygen modifiers, durable medical equipment modifiers, dialysis supply modifiers, prosthetic and orthotic modifiers, parental and enteral modifiers and surgical dressing modifiers.

For proper use, consult the appropriate section of the Medicare manual. Each local coverage determination will have instructions on when and how to use the modifiers.

Also remember that DME modifiers will most likely be used in addition to the specific modifiers in the other sections. For example, if a beneficiary is prescribed an oxygen concentrator with a flow rate of greater than 4 lpm and a portable oxygen system is also prescribed, you would need two modifiers: RR (DME modifier) would be used to indicate the item is a rental, and QF (oxygen modifier) to indicate the flow rate of greater than 4 lpm with a portable concentrator also prescribed, giving us E1390RRQF.

The importance in this case is that Medicare will pay one-and-a-half times the allowable due to the high flow rate. So by not adding the proper modifier, you are not only billing incorrectly but you are getting less than you should in reimbursement.

There are many modifiers that are used in HME billing, and more are being added each year. You must keep up with the changes to ensure you are properly applying these modifiers to keep yourself out of trouble. Remember that he who knows the all the rules and applies them correctly will win the game.

Jane Bunch is vice president, HME consulting, for Atlanta-based CareCentric. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans and serves as a consultant for fraud and abuse cases. She can be reached at 678/264-4495 or via e-mail at [email protected].