Avoiding Risk Using New X Modifiers for Medicare Reimbursement


Modifier 59 is the most commonly used and abused modifier for Medicare reimbursement of CPT codes in acupuncture, breast biopsies, physical therapy, radiology, surgery and other medical practices. It often causes incorrect payments, triggering audits, fraud, waste and abuse (FWA) cases and escalating costs for everyone.

The 2013 Comprehensive Error Rate Testing reports $2.4 billion was paid on claims containing modifier 59 with a projected error rate of $450 million. While modifier 59 is not the sole culprit, if it caused 10% of the errors it would represent $45 million in damages.

Modifiers XE (separate encounter), XP (separate practitioner), XS (separate structure) and XU (unusual non-overlapping service) are to be used, together with National Correct Coding Initiative (NCCI) edits, to identify distinct services in the same encounter warranting separate reimbursement.

While it encourages migration to the new modifiers, CMS currently allows providers to submit either modifier 59 or the appropriate X modifier to override Correct Coding Initiative (CCI) edits and get paid. The new codes were designed to be more descriptive, provide more precise coding options, reduce errors, improve claims processing, make payments more accurate, reduce FWA and save money. But, because CMS has not issued clear guidance to use the new modifiers, as promised, the change, instead of improving the situation, has exacerbated it. This has caused denied claims, frustrated workers and has increased costs even more.  

For further clarification on the new modifiers, I recommend that you follow your Medicare carriers’ payment policies, recognizing they are not all standardized. And if you are a payer and haven’t published clear directions for providers to use the new modifiers, I advise you to do so with alacrity so you do not contribute to the confusion.

Unclear rules and delayed decisions not only build frustration and increase costs, they inadvertently can put providers at grave risk. Some providers who willfully abuse modifier 59 to boost their income may be tempted to use the cloak of confusion around the new modifiers to further scam the system. I contend, however, that billing truthfully and correctly saves rebilling and almost always produces more revenue, plus it keeps you out of prison, and maintains your practice and career.

As I recommended in my last article, Taking a Macro View of MACRA to communicate your concerns about the new modifiers, reach out to your CMS regional office or work closely with your local health plan organization to understand exactly how and when to use them. Speak up to help provide more precise coding, reduce errors, improve claims processing, ensure accurate reimbursement, optimize dollars spent on patient care and maintain a healthy practice and reputation.
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