Are you making a $12.5M mistake?

Apr 03, 2019

Pitfalls of unbundling and Modifier 59 usage:

In December 2018, a Pennsylvania for-profit hospital and health system, and its CEO agreed to pay a total of $12.5 million to settle allegations they submitted false claims to Medicare and other federal health care programs for orthopedic surgeries.

The settlement resolves allegations that top executives exploited a loophole – AKA modifier 59 – that allowed them to double bill federal healthcare payers for surgeries and ignored coding consultants who advised them that they were improperly billing.

This resulted in the hospital being overpaid millions by federal healthcare payers, like Medicare and Medicaid.

“It is improper ‘unbundling’ when a provider submits a claim for a global reimbursement for a surgery and misuses Modifier 59 to separately bill for parts of the same surgery,” according to the news release announcing the settlement.

The settlement sheds light on one of the common misuses of modifier 59 related to the portion of the definition allowing its use to describe a “different procedure or surgery.”

The CPT Manual defines modifier 59 as follows:

“Distinct Procedural Service: Under certain circumstances, it may be necessary to indicate that a procedure or service was distinct or independent from other non-E/M services performed on the same day. Modifier 59 is used to identify procedures/services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances. Documentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual. However, when another already established modifier is appropriate, it should be used rather than modifier 59. Only if no more descriptive modifier is available, and the use of modifier 59 best explains the circumstances, should modifier 59 be used. Note: Modifier 59 should not be appended to an E/M service. To report a separate and distinct E/M service with a non-E/M service performed on the same date, see modifier 25.”


Having an experienced coding audit organization evaluate your current coding practices is imperative to ensuring you are appropriately billing for all services. Learn more about our comprehensive approach.

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