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CGS Administrators, LLC

Serving the states of MN, WI, IL, IN, OH, KY and MI

April 18, 2017

Revised - Use of Upgrade Modifiers

An upgrade is defined as an item that goes beyond what is medically necessary under Medicare's coverage requirements. An item can be considered an upgrade even if the physician has signed an order for it. When suppliers know that an item will not be paid in full because it does not meet the coverage criteria stated in the LCD, the supplier can still obtain partial payment at the time of initial determination if the claim is billed using one of the upgrade modifiers, GK or GL. The descriptions of the modifiers are:

If a supplier wants to collect from the beneficiary for the upgraded item provided, a properly completed ABN must be obtained. If an ABN is obtained, on one claim line the supplier bills with a GA modifier the HCPCS code that describes the item that was provided. On the next claim line, the supplier bills with a GK modifier the HCPCS code that describes the item that is covered based on the LCD. (Note: The codes must be billed in this specific order on the claim.) In this situation, the claim line with the GA modifier will be denied as not medically necessary with a "patient responsibility" (PR) message and the claim line with the GK modifier will continue through the usual claims processing. The beneficiary liability will be the sum of (a) the difference between the submitted charge for the GA claim line and the submitted charge for the GK claim line and (b) the deductible and co-insurance that relate to the allowed charge for the GK claim line. The supplier may charge their "usual and customary" fee for the upgraded item that is provided.

If a supplier wants to provide the upgraded item without any additional charge to the beneficiary, then no ABN is obtained. If it is the supplier's decision to provide the upgraded item at no additional charge to the beneficiary or if physician ordered the upgraded item and the supplier decides to provide it at no additional charge to the beneficiary, the supplier bills with a GL modifier the HCPCS code that describes the item that is covered based on the LCD. In this situation, the supplier does not bill the HCPCS code that describes the item that was provided.

If the request for the upgraded item is from the beneficiary and the supplier decides to provide it at no additional charge, no ABN is obtained. On one claim line the supplier bills with a GZ modifier the HCPCS code that describes the item that was provided. On the next claim line, the supplier bills with a GK modifier the HCPCS code that describes the item that is covered based on the LCD. (Note: The codes must be billed in this specific order on the claim.)

DME Upgrades ABN and Claims Modifiers

DME Upgrades ABN and Claims Modifiers are shown in the following table:
  ABN Required Required Modifier(s) DMAC Payment Beneficiary Pays for Upgrade
1) Physician orders upgrade:
  1. Supplier provides upgrade free of charge to beneficiary
No GL R&N item only (GL line) No
  1. Supplier bills beneficiary for upgrade
Yes GA/GK R&N item only (GK line) Yes
2) Patient requests upgrade:
  1. Supplier provides upgrade free of charge to beneficiary
No GZ/GK R&N item only (GK line) No
  1. Supplier bills beneficiary for upgrade
Yes GA/GK R&N item only (GK line) Yes
3) Supplier provides upgrade for supplier convenience:
  1. Supplier provides upgrade free of charge to beneficiary
NO GL R&N item only (GL line) No

Table Footnotes: GK or GL is added to HCPCS code for item that meets Medicare coverage requirements. When GK is used, GA or GZ is added to HCPCS code for item that is provided. R&N = Reasonable and necessary

Suppliers are reminded that if there is a requirement in a specific policy to use a KX modifier to indicate that an item meets coverage criteria, then it is used in addition to the GK or GL modifier. Codes with a GK or GL modifier will continue through the usual claims processing. Other edits may cause the GK/GL claim line to be denied. However, if no other edits are involved, payment will be made based on the fee schedule for the code with the GK or GL modifier.

Resubmitting Claims with Upgrade Modifiers

For certain items that were previously subject to least costly alternative (LCA) payment policy, suppliers will now receive a not reasonable and necessary denial. For these items only, suppliers have the option of resubmitting the claim using the upgrade modifiers and the code for the covered medically necessary item rather than exercising the option of Appeals. For example, a supplier submits a claim after February 4, 2011 for code E0265 (fully electric hospital bed) and the claim is denied as not reasonable and necessary. That claim may be resubmitted with code E0265 and the appropriate modifiers on Line 1 and code E0260 and the appropriate modifiers on Line 2. Resubmitting the claim in this fashion will not result in a conflict with the original code E0265 claim and subsequent duplicate claim denial.

These resubmission instructions apply only to items previously subject to LCA payment policy that now receive not reasonable and necessary denials. Other items receiving reasonable and necessary denials must follow the usual redeterminations process.

For additional information on LCA elimination, refer to the article entitled Local Coverage Determinations - Elimination of Least Costly Alternative published December 16, 2010.

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