Medical coding is complex. Medical coders follow guidelines created by the American Medical Association (AMA) and the Centers for Medicare and Medicaid Services (CMS) to assign codes to the services and procedures performed by healthcare providers. Insurance companies and the government agencies that administer Medicare and Medicaid payments rely on those codes to determine the payment that should be made for each procedure or service. Incorrect codes lead to incorrect payments.
The AMA’s standardized coding system assigns a 5-digit code to each medical service or procedure. Sometimes, however, the 5-digit code doesn’t tell the whole story. It may be necessary to add another code to provide additional information about the procedure. Those additions to the code are called code modifiers.
Some code modifiers affect billings. Others do not. Using the correct modifier assures that billing records are accurate and is often an essential assurance that a patient is not being overbilled.
The AMA’s coding system is known as the Current Procedural Terminology (CPT) system. The AMA’s CPT codes are incorporated into the Healthcare Common Procedure Coding System (HCPCS) that the CMS requires providers to use when billing for services that are covered by Medicare or Medicaid.
Five-digit CPT codes are divided into six categories: Evaluation and Management Services (such as office visits), Anesthesiology, Surgery, Radiology, Pathology/Laboratory Services, and a catchall Medical Services category that covers ophthalmology, vaccinations, and other services that aren’t included in the Evaluation and Management Services category.
Codes play a vital role in billing, but they are also used for other purposes. While thousands of Category I codes describe medical procedures and services, Category II codes are used to track information about patients. Researchers also use billing codes to analyze trends in the delivery of medical services in various regions of the country.
While CPT codes provide the information that insurers need to understand the services for which they are being billed, the code alone might not provide all the information that a person reading the billing might need. When a CPT code doesn’t tell the whole story, billers add clarity by attaching a CPT code modifier.
CPT Code Modifiers
Code modifiers help healthcare providers create accurate and detailed billings. While not all modifiers translate into charges for services, they all provide useful information. The correct use of modifiers helps healthcare providers comply with regulations and avoid accusations of fraud.
A CPT code may be followed by more than one modifier. For example, a “functional” modifier might be added that affects billing, while an “informational” modifier might simply provide additional information about the procedure. Billers place functional modifiers before informational modifiers because payers might only look at the first one or two modifiers when deciding how much to pay for a service or procedure.
One in ten billing errors involve the use of code modifiers. Understanding how modifiers work is essential to the preparation of accurate billings.
Modifiers consist of two digits. They can be letters or numbers or one of each. The modifier is appended to the 5-digit CPT code. The modifier does not change the CPT code but calls attention to special circumstances associated with the service or procedure that the patient received.
The most common examples of circumstances that require a modifier are:
1. A service or procedure has both a professional and technical component, but only one component is applicable.
2. A service or procedure was performed by more than one physician or in more than one location.
3. The time spent to perform a service or procedure was longer or shorter than the CPT code would otherwise indicate.
4. Only part of a service was performed.
5. An adjunctive service was performed.
6. A bilateral procedure was performed.
7. A service or procedure was performed more than once.
8. Unusual events occurred during a procedure or service.
Modifiers are based on medical records or other medical documentation. A modifier should not be appended to a CPT code unless facts that support the modifier can be located in the medical documentation. Adding a modifier that is not supported by medical records can be a sign of fraud or overbilling.
Common Examples of CPT Code Modifiers
Certain Evaluation and Management (E/M) CPT codes are assigned according to the level of service provided. The highest level service generally takes the most amount of time. When the highest level CPT code does not reflect the full time that the provider spent to deliver the service, the code modifier 21 may be added to indicate that services were prolonged. In some cases, it may be more appropriate to use a 5-digit “prolonged services” CPT code rather than adding a modifier.
The 21 modifier should not be routinely added to E/M codes and should only be added to the highest level codes. The frequent addition of a 21 modifier to a billing or series of billings may be a red flag that will alert auditors or medical billing experts to the possibility of fraud.
Billers add 25 as a modifier when the patient received an additional service that was separate or distinct from another procedure that is being billed. For example, when a patient comes in for an in-person dialysis but receives a separate examination and diagnosis of an unrelated problem, the 25 modifier might be appropriate to make clear that the separate examination was unrelated to the dialysis.
The modifier 22 is added to CPT codes when a procedure took longer than usual to perform and when no other CPT code addresses the prolonged nature of the service. Unusual blood loss, hemorrhage, or unexpected complications during surgery might justify use of the 22 modifier, assuming that the medical records reflect the unusual circumstances.
The modifier 52 is used to reflect reduced services. For example, the CPT code for a comprehensive x-ray might be modified when only a limited comparative x-ray is performed. When a surgeon decides to discontinue surgery based on unexpected findings that suggest a threat to the patient, the modifier 52 will indicate that the procedure took less time than a completed surgery would have taken.
Payers may or may not take modifiers into account when they pay for services. Accurate billings nevertheless depend upon the accurate use of modifiers. While the rules governing modifiers are complex, medical billing experts understand the importance of following those rules with precision.