How Using Modifier 95 for Telehealth Makes dollars!

Capture full payment for remote visits during the PHE for COVID-19.

An interim final rule published in April 6, 2020, Federal Register explains how to bill telehealth services during the COVID-19 public health emergency (PHE). The final rule goes into great detail, explaining why the place of service (POS) code 02 is not being used for the PHE telehealth services and why the modifier 95 is needed.

Here is an explanation of the POS codes, how they tie into the Medicare fee schedule, the changes implemented during the PHE, and why they were implemented.

How POS Codes Affect Payment

CMS created the POS 02 for telehealth so that a modifier was not needed. By using POS 02, the MAC knows the service is telehealth and processes the claim as such.

For traditional telehealth (not during the COVID-19 PHE), the patient cannot be at home. They have to be at an “originating site” for the encounter. And the “originating site” bills a G code for the telehealth facility fee at the originating site. And the POS 02 pays the practice providing telehealth the “facility fee.” Each telehealth code has a facility fee and a non-facility, or office, fee. The difference between a facility fee and a non-facility (office) fee is that the facility fee does not pay the provider for practice expenses. So the facility fee is less than the non-facility fee (office fee). The originating site is paid a fee for use of the facility, which makes up for taking the practice expense from the provider. POS 02, 22, 23, 24 all pay facility fees to the provider, and the provider is not paid for practice expense. Whereas POS 11, office, pays the non-facility fee to the provider, which includes the practice expense.

When to Use Modifier 95

Now let’s talk about telehealth under the COVID-19 PHE. The patient does not have to go to an originating site and can take part in telehealth from their home. As a result, CMS does not have to pay a facility fee to an originating site. The provider is incurring practice expenses in delivering the telehealth, so CMS is paying providers for practice expense in the fee schedule when a provider, who usually practices in an office, provides telehealth services during the COVID-19 PHE.

If POS 02 is used, the provider will not be paid for practice expense because the POS 02 triggers the facility provider fee schedule. CMS says in the April 6 IFC that providers who usually provide services in the office should use POS 11 for their telehealth services during the COVID-19 PHE. But the MAC needs to know that the service is telehealth. Without using POS 02 and using POS 11, however, the MAC cannot distinguish between an in-person service and a telehealth encounter. That is why CMS has indicated that modifier 95 has to be added to the CPT/HCPCS Level II codes provided during the telehealth encounter. This will ensure the office, the non-facility provider fee schedule will be paid, including the practice expense, and the MAC will know that the services were provided via telehealth.

Telehealth Costs Add Up

Below shows the difference in the Medicare fees with no geographic adjustment associated with facility and non-facility:

As you can see, reporting the proper POS and modifier on telehealth claims during the PHE for COVID-19 adds up.

Source: https://www.cms.gov/files/document/covid-final-ifc.pdf