Did you know that the findings of a Market Research Future (MRFR) analysis show that the Behavioral Health Services industry is forecasted to rise from $175.26 billion (2025) to $288.76 billion by 2035? This is because an increasing number of individuals are turning towards these services due to health concerns.
While it is true that the industry is currently experiencing growth thanks to the awareness of mental and behavioral health conditions, there are some persisting challenges. For example, the billing guidelines have undergone changes.
A majority of new billers think that it is enough to use the HO modifier when billing payers for mental health services. However, in many cases, their claims have been rejected due to the misuse of this modifier. So, read through this guide to learn HO’s appropriate usage.
HO Modifier – Description
According to the American Association of Professional Coders (AAPC) code list:
HO is a two-character code attached to a CPT or HCPCS code (on the CMS-1500, Box 24D, or the equivalent 837P Loop) to indicate the level of education a provider has attained. It is an informational modifier and does not have an effect on the reimbursement rate.
Simply Put
HO is a HCPCS Level II modifier indicating the highest level of certification of the rendering provider. The specific modifier is used when the physician has a master’s degree. It may seem like an insignificant modifier, but billing guidelines related to it can change frequently.
In some states, the modifier itself has already been sunsetted for certain codes. Below is the actual information required to use this modifier correctly. The HO modifier sits in a small credential-level family:
| Modifier | Provider Level |
|---|---|
| HN | Bachelor’s degree level |
| HO | Master’s degree level |
| HP | Doctoral level |
Distinguishing Modifier HO from Others
Even though HO indicates the provider’s educational background, it is not similar to other modifiers like AJ (clinical social worker) and AH (clinical psychologist). AJ and AH denote license types, and the HO modifier indicates educational qualifications only.
Billers must understand this difference because some claims may contain a license type modifier as well as an educational qualification modifier. However, the two are not interchangeable, and improperly combining the two can lead to claim denials or delays.
Scenarios Where the HO Modifier is Applicable
The first step to accurate billing of the HO modifier is understanding its billing and usage guidelines. The modifier is typically appended to psychotherapy or crisis intervention HCPCS/CPT codes when the service is performed by master’s level professionals. Thus, it may apply to an:
- Licensed Professional Counselor (LPC)
- Licensed Marriage and Family Therapist (LMFT)
- Licensed Clinical Social Worker (LCSW)
Notably, HO is not a universal requirement. Instead, it depends on the payer and state Medicaid policy, which are subject to frequent updates. The following are some cases that billers need to take into account before appending modifier HO:
Eligible Behavioral Health Service
Consider a scenario where a 35-year-old behavioral health clinician is a Medicaid-approved provider. This clinician qualifies as a master’s level mental health practitioner.
Moreover, the individual resides in a hospital while providing covered psychotherapy services. Once the service is provided, the biller bills the payer using the appropriate CPT code along with the HO modifier.
Telehealth Behavioral Health Service
Consider the case of a master’s level qualified mental health professional who renders a covered behavioral health service via telehealth. As per the guidelines of the relevant Medicaid program, modifier HO is appended to highlight the provider’s master’s level qualification, and a separate modifier and CPT code are reported for telehealth.
Service Under a Medicaid Behavioral Health Program
Imagine a behavioral health program that mandates individual-level identification of the providers on the claim. A 40-year-old provider enrolled in a Medicaid program as a qualifying mental health practitioner with a master’s degree provides services.
According to the program’s billing guidelines, billers should report the HO modifier with the relevant service code when billing the payer.
HO Modifier – Billing Guidelines
The following are some of the main billing guidelines applicable to HO:
Verify Payer Policy Before Billing
Many times, the eligibility for modifier HO may change during the year. Thus, practices and service providers should incorporate a quarterly check into the process to ensure they are following the payer’s latest billing rules and policies.
Avoid Submitting HO for Ineligible Providers
Never submit HO on a claim for a provider whose highest educational degree cannot be documented. Ensure the modifier matches the highest educational level of the rendering provider, not the supervising one.
Additionally, credentialing and provider enrollment documents must match the submitted claims.
Avoid Replacing License-Type Modifiers
Never use the HO modifier to change license-type modifiers (AJ, AH, AF). Avoid replacement even if a payer does not require the latter. Note that some payers may require both educational and licensing modifiers in the same record.
Review Applicable Companion Modifiers
In some cases, payers might require the HO modifier with additional modifiers that apply to certain HCPCS codes. If the required modifiers are missing, it will trigger a CO-4 denial (the procedure code is inconsistent with the modifier used) on the remittance advice.
In a Nutshell
The HO modifier is a HCPCS Level II modifier which indicates the highest credential, i.e., a master’s degree, of the rendering provider. This modifier is often used by billers while billing for mental and behavioral health services rendered by professionals like LPCs and LMFTs.
The dangers of misusing this modifier may be significant because it is state- and payer-specific. In addition, such informational modifiers may become obsolete, or their structure may change without any notice.
In order to bill correctly, the main skill of the biller should not be knowing when to apply HO, but developing a system of checking the payer requirements and understanding the reasons behind claim denials.
If your team does not have enough time to keep track of all the changes in modifiers and codes for your payer mix, MediBillMD’s medical billing services can help you with this task.
