Inspector General Wants CMS to Scrutinize G Modifiers

Within the arcane science that rules Medicare claims, there are the “G modifiers,” which providers use to notify Medicare that a particular bill may not qualify for reimbursement.

But then Medicare pays it anyway. And while the provider has no idea why, they are grateful that they now don’t have to chase secondary insurer or the patient to collect.

In 2011 the Centers for Medicare and Medicaid Services (CMS) paid almost $750 million in claims with G modifiers, and the Office of Inspector General believes that was too much. “We found that vulnerabilities exist in how Medicare pays for these claims,” the report states. “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 providers expect not to be paid.”

The Inspector General has asked CMS to order it’s claims processing contractors to apply greater scrutiny on claims that use G modifiers, writing:

We are aware that CMS developed a GU modifier for providers to use on claims for items and services for which the routine use of ABNs is appropriate, such as for services that are subject to frequency limitations. This is one way to address the problem in that it would allow providers to use the GA modifier solely for other items and services that they expect to be denied. CMS would then need to instruct contractors to automatically deny or review claims with GA modifiers before paying them. To date, however, CMS has not issued any instructions about the GU modifier or how contractors should process these claims. CMS needs to either issue such instructions or develop other methods of addressing these program vulnerabilities.

In addition, CMS needs to ensure that all contractors are following its instructions to automatically deny claims with GZ modifiers. CMS also needs to instruct contractors to automatically deny claims with GY modifiers and ensure that contractors follow these instructions. Further, CMS should decide whether to implement the GX modifier for Part Bclaims, since providers are already using it. Lastly, CMS should ensure that contractors do not pay for claims with inappropriate combinations of G modifiers. OIG will continue to monitor claims with G modifiers and will undertake a review in the future if it appears that CMS has not addressed the problems presented in this report.