GZ and GY HCPCS Modifier Use

Published 06/06/2021

The Center for Medicare & Medicaid Services (CMS) created two modifiers that allows you to distinguish between services that are statutorily excluded, or otherwise not a Medicare benefit because Medicare does not consider them “reasonable and necessary.” Statutorily excluded refers to Medicare benefits that are never covered according to law. “Statutory” refers to written law. Medicare does not pay for all health care costs. Certain items or services are program or statutory exclusions and will not be reimbursed by Medicare under any circumstances. Medically necessary services are defined as “health care services or supplies that are needed to diagnose or treat an illness, injury, condition, disease or its symptoms, and that meet accepted standards of medicine.” If the services billed do not meet the criteria, then it is not considered reasonable and necessary.

HCPCS Modifier GY: service provided is statutorily excluded from the Medicare program. The claim will deny whether or not the modifier is present on the claim. 

Adding the GY HCPCS modifier to the CPT code indicates that an “item or service is statutorily excluded or the service does not meet the definition of Medicare Benefit.” This will automatically create a denial and the beneficiary may be liable for all charges whether personally or through other insurance. For example, when a beneficiary wants new eyeglasses and wants to get a denial through Medicare for secondary payer purpose, the claim should be submitted with GY HCPCS modifier. This way the claim may be processed faster than it would be without GY HCPCS modifier. Advanced Beneficiary Notices (ABNs) are not acce[table for statutory exclusions.

Appropriate Usage

  • Services provided under statutory exclusion from the Medicare program, the claim would deny whether or not the modifier is present on the claim
  • It is not necessary to provide the patient with an ABN for these situations
  • Situations excluded based on a section of the Social Security Act
  • Modifier GY will cause the claim to deny with the patient liable for the charges

Inappropriate Usage

  • Do not use on bundled procedures
  • Do not use on add-on codes

HCPCS Modifier GZ: item or service expected to be denied as not reasonable and necessary. 

Medicare will auto-deny services submitted with a GZ HCPCS modifier. The denial message indicates that the patient is not responsible for payment; deny provider liable.

Use this modifier to report when you expect that Medicare will deny payment of the item or service due to a lack of medical necessity and no ABN was issued. 

Use when the provider expects denial due to a lack of medical necessity based on an informed knowledge of Medicare policy.

This modifier is an informational modifier only. An informational modifier is a medical coding modifier not classified as a payment modifier. Another name for informational modifiers is "statistical modifiers." Payment modifiers are modifiers that have an impact on payment of the claim. An example of this is adding the 50 CPT modifier for bilateral services. When the 50 CPT modifier is added, the code billed gets reimbursed at 150 percent of the Medicare allowable amount.

Medicare contractors, including Palmetto GBA, will automatically deny claim line(s) items submitted with HCPCS modifier GZ, using Claim Adjustment Reason Code CO-50. (These services are non-covered services because this is not deemed a "medical necessity" by the payer.)

Do not submit both HCPCS modifier GZ and HCPCS modifier GA or GY on the same claim line.

The GA HCPCS modifier indicates that there is an ABN on file.

The GY HCPCS modifier indicated that an item or service is statutorily non-covered or in not a Medicare benefit.

Do not add the GZ HCPCS modifier to a corrected claim (XX7 UB) if you are correcting a charge and putting it as non-covered. This causes the line to deny because lines with the GZ HCPCS modifier are automatically denied.

Medicare will adjudicate the service just like any other claim. 

If Medicare determines that the service is not payable, denial is under "medical necessity." The denial message will indicate that the patient is not responsible for payment. 

If either the beneficiary or provider requests a redetermination, the modifier indicated that an ABN was not given, and this could aide in completing the review quickly.