When a procedure is planned, and the patient is taken into an operating room, it is rare that the procedure is discontinued, but it happens. In fact, a study shows that in ambulatory surgical centers (ASCs), these same-day cancellations occur at a rate of about 0.5%. But the question arises: since the procedure was not performed, how can the healthcare providers get reimbursement for all the preparatory services?
The answer is modifier 74. And that’s what this guide is all about. We will explain what this modifier is, how it is used, and more specifically how you can use it correctly in your claims. So, let’s start.
Modifier 74 – Description
Modifier 74 is defined as:
“Discontinued outpatient hospital/ambulatory surgery center (ASC) procedure after administration of anesthesia.”
As evident from the definition, this modifier is used when a patient was prepared for a procedure but the surgical team discontinued it. Simply put, modifier 74 tells the payers that a procedure was planned, the healthcare provider administered the anesthesia, but right after it, the procedure was terminated for some reason.
Please note that if the procedure was discontinued before the administration of anesthesia, then modifier 73 applies instead of 74.
An important thing to mention about this modifier is that it can only be used for facility claims filed by a hospital outpatient department or an ambulatory surgery center. You cannot use this for claims submitted by physicians, surgeons, or other individual practitioners. These individual practitioners can use modifier 53 instead of 74.
Now that we have discussed the descriptor, it is also important to explain what constitutes anesthesia. According to Centers for Medicare & Medicaid Services (CMS) guidelines, anesthesia administration includes local anesthesia, regional block(s), moderate sedation or analgesia (commonly called conscious sedation), deep sedation or analgesia, and general anesthesia.
Appropriate Use Cases for Modifier 74
The description above covers the rules, but to really clarify the concept, here are a couple of real-world scenarios in which modifier 74 can be used:
Scenario 1
Let’s start with our first scenario. Suppose a patient was scheduled to get his routine screening colonoscopy. The colonoscopy was to be performed at an ASC. The patient reached the ASC and was prepared by the staff and taken into the procedure room. He was also given some moderate sedation. However, just when the physician was about to start the procedure, the patient’s oxygen saturation dropped sharply and didn’t stabilize with supplemental oxygen.
This was a complication, so the physician decided to discontinue the procedure. Now, since the sedation was administered, following the payer rules, the facility’s billing department can use modifier 74 on the UB-04 claim form with the appropriate CPT code to bill the services.
Note: Independent or Freestanding ASCs typically use the CMS-1500 professional claim form instead of the UB-04 (CMS-1450) form for institutional claims and report place of service (POS) code 24 to highlight the care setting to the payer. Whereas, hospital-affiliated ASCs generally use the UB-04 claim form.
Scenario 2
Consider another scenario. A patient scheduled for cataract extraction at a hospital outpatient surgery department receives a retrobulbar block. Just before the surgeon begins the incision, the cardiac monitor shows a new arrhythmia. The anesthesiologist and surgeon agree to stop the procedure immediately to stabilize the patient.
Since regional anesthesia had already been administered, the facility reports the intended cataract surgery CPT code with modifier 74 on its claim form, even though the incision was never made.
Accurate Usage Guidelines for Modifier 74
The following guidelines will help your billing team avoid the most common mistakes that billers make with modifier 74:
- Facility Use Only: Modifier 74 belongs on ASC and hospital outpatient claims. Physician and professional claims report a discontinued procedure with modifier 53 instead.
- One Modifier per Date of Service: When multiple procedures were planned for the same day, and none of them were completed, only the CPT code for the first planned procedure is reported with the 74 modifier. The remaining planned procedures are not reported at all.
- Do Not Use it for Elective Cancellations: If the patient or physician cancels the procedure before surgical preparation and anesthesia begins, do not report modifier 74 or any discontinued procedure modifier.
- Confirm Anesthesia Was Actually Given: Do not append the 74 modifier to a procedure that was never started and where anesthesia was never administered, even if the patient was fully prepped. That scenario calls for modifier 73 instead.
- Document the Timeline: Medical records should show when the patient was prepared, when anesthesia was administered, or the procedure was started, and the specific medical reason for the discontinuation.
Modifier 74 vs 73
Here is a quick summary of the differences between modifier 74 and 73:
| Feature | Modifier 74 | Modifier 73 |
|---|---|---|
| Timing | Discontinued after anesthesia administration or after the procedure started. | Discontinued after patient preparation but before anesthesia administration. |
| Patient Location | Taken to the procedure room. | Taken to the procedure room. |
| Setting | ASC or hospital outpatient department only. | ASC or hospital outpatient department only. |
| Physician Equivalent | Not used by physicians (see modifier 53). | Not used by physicians (see modifier 53). |
| Reimbursement Rate | 100% of the applicable fee schedule rate for the facility. | 50% of the applicable fee schedule rate for the facility. |
So, the deciding question for you and your billing team is simple: had anesthesia already been given, or had the procedure already started, when it was called off? If yes, use 74. If no, but the patient was still prepped and in the room, modifier 73 is the correct choice.
Final Thoughts
We discussed several details about modifier 74 in this guide. In case you missed anything, here is a summary of the most important points:
- Modifier 74 is used when a patient is taken to the procedure room, prepared, and the anesthesia is delivered, but after this, the procedure is discontinued.
- It is reported by ASCs and hospital outpatient departments only, never by physicians.
- Only one procedure code per date of service receives the modifier.
- Documentation must show the timeline of preparation, anesthesia, and the reason for stopping.
Even though the usage of this modifier seems simple, in practice it can be quite confusing. So, if your practice needs support in medical billing and coding, try getting professional help. Many companies like NeuraBill specialize in full-suite revenue cycle management (RCM) that gives guaranteed results.
