Tuesday, March 22, 2011

New Modifier AY: Item/service not for ESRD treatment

2011 New Modifiers - AY Modifier

Modifier AY: Item/service not for ESRD treatment


If an End Stage Renal Disease (ESRD) facility needs to report a lab service (not related to ESRD treatment), they must include modifier AY to indicate item/service was not for treatment of ESRD.

Correct Use

    ESRD facilities reporting Daptomycin revision
        Separate payment available for J0878 Injection (Daptomycin, 1 mg) when furnished to an ESRD patient (not for ESRD treatment)

Incorrect Use

    Inappropriate to bill J0890 with modifier AY
        Consolidated billing requirement –not overridden with AY modifier
    Modifiers CD, CE and CF (also known as 50/50 rule modifiers) no longer valid for use on independent laboratory claims

Correct Claim Coding



Assay of Creatinine

82565 AY

Certain laboratory services and limited drugs and supplies will be subject to Part B consolidated billing and will no longer be separately payable when provided for ESRD beneficiaries by providers other than the renal dialysis facility. Should these lab services, and limited drugs be provided to a beneficiary, but are not related to the treatment for ESRD, the claim lines must be submitted by the laboratory supplier or other provider with the new AY HCPCS modifier to allow for separate payment outside of ESRD PPS. ESRD facilities billing for any labs or drugs will be considered part of the bundled PPS payment unless billed with the HCPCS modifier AY.

When claims are received without the AY modifier for items and services that are not separately payable due to the ESRD PPS consolidated billing process, the claims will be returned with claim adjustment reason code (CARC) 109 (Claim not covered by this payer/contractor. You must send the claim to the correct payer/contractor.), RARC N538 (A facility is responsible for payment to outside providers who furnish these services/supplies/drugs to its patients/residents.), and assign Group code CO.

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