What is Modifier GZ in Medical Billing?

Healthcare is a heavily regulated industry, and if you are a Medicare-approved provider, you must be familiar with the repercussions of incorrect billing. Filing Medicare claims is hard enough, but what if you made a mistake or HAD TO render an uncovered service because the patient demanded it? 

Should you accept your error or risk getting stamped as a fraudulent biller? We advise the former, and you can do it by appending modifier GZ to your Medicare claims. 

Learn all the hows, buts and ifs in this detailed guide below. 

Modifier GZ – Description

Modifier GZ is a Healthcare Common Procedure Coding System (HCPCS) modifier. It is typically appended to Medicare insurance claims. The modifier is used when the healthcare provider expects Medicare to deny the claim because the service or product was unreasonable and not medically necessary. 

Unlike the modifier GA, the GZ modifier indicates that a waiver of liability statement, also known as an Advance Beneficiary Notice (ABN), was not issued to the patient or was issued but was not signed by the patient. Therefore, the provider acknowledges that in the case of a Medicare denial, the patient is not financially responsible for the medical expenses of the rendered services or items. 

Since modifier GZ is an informational modifier, its use is elective. Medicare will review the claim like any other, even if modifier GZ is appended. However, its usage ensures that healthcare providers accept their mistake of not issuing an ABN and granting a non-covered service, thereby shielding themselves from any risk of allegation of fraud or abuse. 

When to Use Modifier GZ?

In simple terms, modifier GZ highlights the healthcare provider’s acknowledgment that Medicare does not cover the service or item. So, when should the physician or his billing team append it? Let’s discuss a few of these real-world scenarios in detail. 

Providing Uncovered DME without Issuing an ABN

An advance beneficiary notice is given to the patient to make them understand that in the case of a Medicare denial (for the non-covered service or item), the patient will be responsible for the medical expenses. The patient is required to sign the document, and at the time of claim submission, the healthcare provider must submit this ABN along with the claim. 

But what happens if the healthcare provider knows that Medicare does not cover the service or item and forgets to issue an ABN? In this case, the billing team must use modifier GZ with the appropriate HCPCS code to accept their mistake, trigger an automatic denial, and save themselves from accusations of fraudulent billing. 

Now, imagine that a healthcare provider prescribes surgical/compression leggings (a piece of durable medical equipment – DME) to a patient after varicose vein surgery to reduce post-operative swelling (edema), improve blood circulation, and promote healing. Since surgical leggings are for personal use, Medicare deems them medically unnecessary and not suitable for reimbursement. 

While the non-covered surgical leggings were prescribed to the patient, the provider forgot to obtain the patient’s consent for financial liability through a signed ABN. Hence, the billing team filed the claim to Medicare with modifier GZ to avoid a complex medical review. 

Providing Uncovered Ambulance Transport when the Patient was Unable to Sign an ABN

Before discussing the second example, we must understand that Medicare covers emergency ambulance transportation services (ground and air). However, the coverage is only for transferring the patient to the nearest medical facility that can offer the necessary care. 

Now, consider that a patient suffered cardiac arrest and, upon the family members’ request, was taken to an out-of-network hospital where he receives regular treatment rather than the one nearest to his home. Since the patient was unconscious, he could not sign an ABN even though the paramedics had it on hand. 

After the transfer, the ambulance service staff will bill Medicare for the service with modifier GZ to accept that the transfer to an out-of-network and faraway hospital was medically unnecessary. Moreover, the patient did not sign an ABN for financial liability. 

Performing an Uncovered Lab Test without a Signed ABN

When it comes to diagnostic lab tests, Medicare covers them as long as the patient is symptomatic and the physician orders the test for the suspected disease or condition. However, Medicare does not cover preventive screenings or tests performed for employment or visa purposes. 

So now, assume that a Medicare beneficiary used a specimen drop box to drop off a urine sample for a pre-employment drug test. Since the beneficiary used an after-hours specimen drop box outside the diagnostic lab and did not engage with the staff, he missed the opportunity to receive and sign an ABN. Even when the staff tried to call him, he was unavailable. Hence, the specimen was tested, and the results were emailed to the beneficiary without issuing or signing an ABN. 

As the urinalysis was medically unnecessary and was performed without a signed ABN, the lab staff must append modifier GZ to the urinalysis service code to trigger an automatic claim denial, prevent a complex medical review, and divert financial liability from the patient. 

Accurate Usage Guidelines for Modifier GZ

In the sections above, we described what the GZ modifier indicates and the clinical situations necessitating its use. But is that enough to report this modifier on the claim and expect Medicare to process it without hiccups? 

NO! Certainly NOT! You must know the billing rules and regulations surrounding modifier GZ to submit clean and compliant claims. Who knows, your precision may move Medicare to rethink the service or item’s medical necessity and reimburse a portion of it.  

Below are the Do’s and Don’ts that you must follow for the accurate usage of modifier GZ. 

Append Modifier GZ with the Appropriate HCPCS Code 

GZ is an HCPCS modifier. Therefore, it must be used on Medicare claims with the correct HCPCS code to denote the service or item the provider expects to be denied. 

Append Modifier GZ when the Service or Item is Excluded

You must only append modifier GZ to the HCPCS code when the item or service is listed under Medicare’s “Excluded” list. In other words, you must be sure that Medicare considers the service or DME medically unnecessary and does not reimburse it. 

Append Modifier GZ when an ABN was Not Issued or Signed

Also, modifier GZ is only allowed when the advance beneficiary notice was not issued to the patient or due to some circumstances, the patient could not sign the paperwork. If an ABN was issued and the provider obtained a signed copy, use the modifier GA instead.  

Append GZ to an NOC Code when Specific Procedure Code is Non-Existent

What happens when you deliver a non-covered service or an item but are unable to find an HCPCS code that accurately specifies it? In that case, you will report a “not otherwise classified” (NOC) code and append modifier GZ. 

Do Not Append Modifiers GZ and GA on the Same Claim Line

Modifiers GZ and GA on the same claim line will make your claim invalid, and Medicare may not even process it. This is because GA and GZ indicate opposite facts. Using both together will cancel out each other’s effects. 

We have already explained that modifier GZ highlights a medically unnecessary service without a signed ABN on the file. In contrast, modifier GA explains a medically unnecessary service with a signed ABN on the file. 

Do Not Append Modifier GZ to Bill the Patient

Please note that in the case of a denial, modifier GZ will ensure provider liability. It means that if Medicare declines to reimburse the item or service, the provider cannot transfer the financial responsibility to the patient. Instead, they must write off the expense. 

Do Not Submit Any Charges as Covered

By using the GZ modifier, the provider accepts that the rendered services or supplies are uncovered. So, since reimbursement is unlikely, they cannot add a billed amount to the claim. 

Summary

Information overload, situation lost control? Relax! We will recap the key takeaways for you right here. Let’s start from the beginning. We explained that modifier GZ is used with an HCPCS code on a Medicare claim to acknowledge that the item or service is medically unnecessary and the patient did not sign an advance beneficiary notice. Therefore, in the case of a Medicare denial, the patient is not financially responsible for the uncovered service or supplies.  

Next, we discussed some situations where the GZ modifier can be appended. For example, when the provider forgot to issue an ABN, could not issue an ABN because the patient was not physically present or was not in a state to sign the ABN. 
Lastly, we discussed some crucial billing tips for the accurate usage of modifier GZ. But want to know the BONUS TIP? Outsource medical coding to professionals at MediBillMD and focus on what you do best – Rendering quality patient care!