You know the basics! Incorrect billing can lead to many repercussions. Underpayments might be the least of your concerns when the worst-case scenario could be a potential loss of your license. To stay competitive in a heavily regulated healthcare landscape, you must comply with all the requirements, including Medicare’s policies.
However, we are all humans, and mistakes can happen. So, what should you do if you provided a medically unreasonable service without obtaining a signed Advance Beneficiary Notice (ABN)? Instead of compromising your reputation, accept the oversight by applying modifier GZ to the service code. Let us help you understand everything about this HCPCS modifier in plain language.
What is Modifier GZ?
Modifier GZ indicates provider liability. It simply means that healthcare providers cannot bill the patient for the denied service or item. If we go with the official description, healthcare providers use this HCPCS code when they file a claim for a non-covered service.
In simplest terms, modifier GZ refers to two things:
- The healthcare provider expects Medicare to deny the claim due to medical unnecessity.
- The provider did not issue an advanced notice of non-coverage or obtain a signed ABN from the patient.
In short, the modifier GZ is an informational modifier primarily used on Medicare claims. Healthcare providers use it to save themselves from being labeled as fraud.
Modifier GZ – Usage Examples
Did you gain some clarity with the description? The following examples of modifier GZ’s usage can further clear up your confusion.
Repeat Pap Smear Test without Issuing an ABN
Medicare covers cervical and vaginal cancer screenings once every 2 years in most cases. So, what happens if you repeat the test within a year for a patient who is not at high risk?
Suppose a 31-year-old woman, let’s call her Jane, visits her gynecologist for a Pap test (a screening for cervical cancer). The problem is that she already had a Pap screening 12 months ago. However, upon Jane’s insistence, the OB-GYN agrees to perform the test again but forgets to issue an ABN beforehand.
Since there wasn’t any medically sound reason to repeat this test so soon, the provider expects Medicare to deny the claim. Hence, she appends modifier GZ to Q0091 (HCPCS code used for obtaining the Pap smear specimen).
Unrelated Colorectal Cancer Screening without Symptoms
Medicare covers a wide range of screening services, but only on one condition: if they are medically necessary. So, what happens if you perform an examination for which the patient has no symptoms or diagnoses?
Let’s say John, a 65-year-old man with no visible symptoms or history of colorectal cancer, arrives at an outpatient department. He requests a colonoscopy, and the healthcare provider complies. However, he forgets to obtain a signed ABN before providing the service.
Since Medicare does not cover this particular scan without a relevant diagnosis, he attaches modifier GZ to HCPCS code G0121 (Colorectal cancer screening for low-risk individuals).
Unnecessary Hospitalization without Obtaining a Signed ABN
Medicare also doesn’t pay for hospital services that could be provided in a more cost-effective setting. This includes unnecessary hospitalization when the patient can be treated at home or in a nursing facility.
Let’s assume a 68-year-old Peter experiences mild dehydration after recovering from diarrhea. Instead of advising Peter to increase his fluid intake, the hospital admits him for inpatient observation. Moreover, they put him on an IV treatment despite his stable condition without obtaining a signed ABN.
Upon realizing their mistake, the administration applies modifier GZ to HCPCS code G0378 (hourly hospital observation service).
Accurate Usage Guidelines for Modifier GZ
We know that a description and examples are not enough for you to file an accurate claim. To avoid hiccups, you should comply with all the billing rules and regulations while using modifier GZ.
Feeling overwhelmed? Follow our usage guidelines to report the GZ modifier on Medicare claims accurately.
Use Modifier GZ Correctly
As we emphasized in the description, there are two conditions for using the GZ modifier:
- When you believe Medicare will deny the service due to a lack of medical necessity
- When you did not issue an advance notice of non-coverage (ABN) to the patient before providing the non-covered service or item.
In short, use this modifier only in these specific situations to protect your reputation.
Apply Modifier GZ to the Appropriate HCPCS Code
You might already know this from the examples above, but let us reiterate. Attach modifier GZ to the service or item code you expect Medicare to deny. Keep in mind that you can only use this modifier with the appropriate HCPCS code. Here is how you can do that:
Example: Enter V5010-GZ on the same claim line to bill for an assessment for a hearing aid.
Do Not Bill the Patient
This is the most common mistake. Modifier GZ highlights that a denied service or item is a provider liability. It means it is your responsibility. Hence, you cannot seek payment from the patient.
Maintain Clear & Complete Records
As always, you should maintain complete documentation even if you know Medicare will deny the claim. Keep a clear record of the performed service and be prepared to show evidence that no ABN was issued to the patient.
Final Thoughts
It’s a wrap! Let us repeat the key points so you don’t feel overwhelmed. Modifier GZ, introduced by the Centers for Medicare & Medicaid Services (CMS), is an informational code. Healthcare providers primarily use it on Medicare claims when they expect a denial. The main reason? When Medicare is likely to consider the service or item as medically unreasonable or unnecessary.
As a result, the providers cannot bill the patient, as they didn’t warn them about a potential denial with an ABN. In short, this modifier indicates provider liability. We have tried to simplify modifier GZ as much as we can so you don’t confuse it with similar ones, such as modifier GA or GY. However, if you are still unclear, consider outsourcing medical billing and coding to professionals at cost-effective rates.
