Medicare Coding Errors to Avoid: Add-on, Place of Service, and Modifiers

Medicare audits have revealed recurring errors in billing with add-on and place-of-service codes. In addition, Medicare continues to receive claims that appear to be duplicate because they lack an appropriate modifier. Here are some guidelines for correct billing.

Add-on HCPCS/CPT Codes Without Primary Codes. Medicare recovery auditors reports that some physicians are billing only add-on HCPCS/CPT codes without their respective primary codes, resulting in overpayments.

An add-on code is a HCPCS/CPT code that describes a service always performed in conjunction with the primary service (see CPT definition below). An add-on code is eligible for payment only if it is reported with the appropriate primary procedure performed by the same physician.

(And if the primary code is bundled or denied for any other reason, the add-on code will also be denied.)

Example: A physician submitted a claim with add-on CPT Code 26863 for one unit for date of service May 5, 2010, without billing for the primary CPT Code 26862. Overpayment for add-on CPT Code 26863 was retracted as a billing error.

• CPT Code 26862: Fusion/graft of finger — Arthrodesis, interphalangeal joint, without internal fixation; with autograft. This is a parent CPT Code and can be reported with add-on CPT Code 26863.
• CPT Code 26863: Fuse/Graft added joint – Arthrodesis, interphalangeal joint with or without internal fixation; with autograft, each additional joint. List separately in addition to code for primary procedure.

Exception: Medicare requires physicians to report CPT code 99292 (Critical care, evaluation and management of the critically ill or critically injured patient; each additional 30 minutes. [List separately in addition to code for primary service.]), without its primary code CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes) if two or more physicians of the same specialty in a group practice provide critical care services to the same patient on the same date of service.

For the same date of service only one physician of the same specialty in the group practice may report CPT code 99291 with or without CPT code 99292, and the other physician(s) must report their critical care services with CPT code 99292. See the Medicare Claims Processing Manual, Chapter 12 (PDF), Section 30.6.12(I), and the Centers for Medicare & Medicaid Services’ (CMS’) MLN Matters No. SE1320 (PDF).

CPT definition of add-on codes:

Some of the listed procedures are commonly carried out in addition to the primary procedure performed. These additional or supplemental procedures are designated as add-on codes with the symbol “+” and they are listed in Appendix D of the CPT codebook. Add-on codes in CPT 2013 can be readily identified by specific descriptor nomenclature that includes phrases such as “each additional” or “(List separately in addition to primary procedure).”

The add-on code concept in CPT 2013 applies only to add-on procedures or services performed by the same physician. Add-on codes describe additional intra-service work associated with the primary procedure, eg, additional digit(s), lesion(s), neurorrhaphy(s), vertebral segment(s), tendon(s), joint(s).

Add-on codes are always performed in addition to the primary service or procedure and must never be reported as a stand-alone code. All add-on codes found in the CPT codebook are exempt from the multiple procedure concept (see the modifier 51 definition in Appendix A).

For more information regarding add-in codes, see CMS Change Request 7501 (PDF).

Place of Service Coding for Physician Services in an Outpatient Setting: Recovery auditors also found that some physicians were incorrectly reporting place of service as office (11) when they provided services in an outpatient hospital (22) setting, resulting in incorrect payment.

To account for the increased expense that physicians incur by performing surgical procedures in their offices, Medicare Part B pays them at a higher rate than for surgical procedures they perform in facility settings such as an outpatient facility. In the latter case, Medicare pays the overhead expenses to the facility, and the physician receives a lower payment rate.

Example:  An 88-year-old female has an outpatient hospital claim paid for services provided on March 12, 2008. Reported on the outpatient hospital claim is CPT code 11100 (Biopsy of skin; single lesion). A professional claim is identified for the same patient, same date of service, and same surgical CPT code 11100 with place of service office (11). The correct place of service for this date of service is outpatient hospital (22).

The professional claim for CPT code 11100 is adjusted to pay at the facility rate by applying the correct place of service code 22. The allowed amount for CPT code 11100 for the facility rate is $41.86. The new provider paid amount is $33.49. This results in a total recovery amount of $33.14.

For more information, see (CMS’) MLN Matters No. SE1313 (PDF). See also the CMS Place of Service Code Set.

Duplicate Claims — Outpatient. CMS reminds physicians to include the appropriate modifier when billing for multiple diagnostic services on the same day of service for the same beneficiary, with the same codes.

Medicare will audit for duplicate payment all outpatient claims a facility submits for the same service to a particular individual on a specified date of service that the facility included in a previously submitted claim. Exact duplicate data fields submitted for same beneficiary, same provider, same dates of service, same types of services, same place of service, same procedure codes, and same billed amount will be audited.

Example:  A physician received duplicate payments of $64.19 on Feb. 22, 2012, and March 20, 2012, for CPT 77080 (Dual-energy X-ray absorptiometry [DXA], Bone Density axial) with a billed date of service of Jan. 31, 2012. Both claims were billed for the same patient, same physician, and same date of service, same charge, same CPT code, and same units, without a modifier.

Resolution:  The physician should bill using modifier 76 or 77 to report the performance of multiple diagnostic services on the same day if these were not actually duplicate claims.

• Modifier 76: Repeat procedure or service by same physician or other qualified health care professional. It may be necessary to indicate that a procedure or service was repeated by the same physician or other qualified health care professional subsequent to the original procedure or service. This circumstance may be reported by adding modifier 76 to the repeated procedure or service. Note: This modifier should not be appended to an evaluation and management (E&M) service.
• Modifier 77: Repeat procedure by another physician or other qualified health care professional. It may be necessary to indicate that a basic procedure or service was repeated by another physician or other qualified health care professional subsequent to the original procedure or service. This circumstance may be reported by adding modifier 77 to the repeated procedure or service. Note: This modifier should not be appended to an E&M service.

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