Thursday, September 6, 2018

APG payment - part 2 , Grouping and use of modifiers


The APG System uses three methods for grouping different services provided into a single payment unit: ancillary packaging, significant procedure consolidation or bundling; and multiple significant procedure and ancillary discounting.

Ancillary Packaging: Ancillary packaging refers to the inclusion of certain ancillary services in the APG payment rate for a significant procedure or a medical visit. When ancillaries are packaged, the costs of the ancillaries are included in the payment amount for the significant procedure or medical visit. Under APGs, ancillary lab and radiology services that are inexpensive or frequently provided are generally packaged into the payment for the significant procedure or medical visit. Other ancillary services, particularly those that are expensive or infrequently ordered such as MRIs are paid as separate ancillary APGs. Uniform packaging of ancillaries is used in the APG payment system. Ancillaries that are uniformly packaged include ancillaries that are performed for a wide range of different visits and which are relatively low cost in comparison with the average cost of the significant procedure and medical visit APGs.

To view the list of ancillaries which are always packaged, called the Uniform Packaged Ancillary List, please visit:

Significant Procedure Consolidation: Significant procedure consolidation refers to the collapsing of multiple related significant procedure APGs into a single APG for the purpose of determining payment. The APG system relies on a significant procedure consolidation list developed on the basis of clinical judgment which identifies for each significant procedure APG, the other significant procedure APGs that are an integral part of the procedure and which can be performed with relatively little additional effort. The APG grouping logic consolidates related significant procedures. (Example: a Level I (primarily diagnostic) lower gastrointestinal endoscopy is consolidated into the Level II (primarily therapeutic) gastrointestinal endoscopy.) Unrelated significant procedures are not consolidated. Multiple unrelated significant procedures on the same date of service also are not consolidated in the APG classification system, but payment for additional unrelated significant procedures will be discounted.

Discounting: Discounting refers to a reduction in the standard payment rate for an APG. The APG payment system applies discounting when multiple unrelated significant procedures are performed or the same ancillary service is performed multiple times during a visit. Discounting recognizes that the marginal cost of providing a second procedure to a patient during a single visit is less than the cost of providing the procedure itself (e.g. the cost of doing two procedures at the same time is less than the cost of doing those same procedures at two different times).

In summary, the APG payment system is a visit-based prospective payment system with uniform ancillary packaging, significant procedure consolidation and multiple unrelated procedure discounting. Packaged ancillaries, incidental procedures, and lower cost drugs, biologicals and supplies are included in the payment amount for a significant procedure and medical visit. Exceptions are identified in Chapter 4. Effective January 1, 2010, medical visits will no longer package with higher intensity significant ancillary procedures (e.g., mammograms, MRIs, CAT scans, etc.) and will pay separately at the line level. Similarly, medical visits will no longer package with dental procedures; physical, speech and occupational therapy; and counseling services. When provided on the same date as an E&M visit, these services will pay at the line level.

Effective January 1, 2010, multiple same APG discounting (rather than consolidation) which currently applies to most dental services (e.g., APG 352 Periodontics) will be expanded to include occupational therapy ( APG 270), physical therapy (APG 271), speech therapy (APG 272) and most mental hygiene APGs (APG 323). For a complete list of APGs that will discount rather than consolidate when combined with other same or similar APGs, visit: Also, effective April 1, 2010, some APGs will discount at rates other than 50%.

For a complete list of “variable discounting’ APGs, please visit:


Use of modifiers provides the means by which providers can indicate that a service or procedure has been altered by some specific circumstances while not changing the definition or the code for the service. The APG system recognizes the following seven billing modifiers.

CPT Modifier 25 (Distinct Service): This modifier is used when there is a significant, separately identifiable evaluation and management service by the same physician on the same date of service as a significant procedure.

The CPT Modifier 25 should be used on an E&M code only when the patient’s condition requires a significant, separately identifiable E&M service above and beyond the significant procedure performed on the same date of service. This modifier should not be used to report an E&M service that resulted in a decision to perform the significant procedure.

** Note: During the initial phase of APGs, Modifier 25 will be disabled and the use of Modifier 25 will have no effect on payment. The EAPG Grouper/Pricer will package the cost of the medical visit flagged with a Modifier 25 in the payment for the significant procedure APG (i.e., the initial APG weights were developed taking into account the disabling of Modifier 25 logic). In the future, Modifier 25 may be activated and the APG weights will be modified accordingly.

CPT Modifier 27 (Multiple E&M visit): This modifier is used when there are multiple outpatient E&M encounters on the same date of service. The CPT Modifier 27 should be used when a patient receives multiple E&M services performed by different physicians in multiple outpatient settings (e.g. hospital emergency department and clinic) on the same date of service. Modifier 27 should be appended to the second E&M code

when reporting more than one E&M service to indicate that the E&M service is a “separate and distinct” encounter provided the same day.

** Note: This Modifier should not be used for reporting of multiple E&M services performed by the same physician on the same date of service.

** Note: Normally, the second E&M will group into APG 449, “additional undifferentiated medical visit,” when Modifier 27 is used. However, during the initial phase of APGs, the weight for APG 449 will be set to zero, which will disable Modifier 27. The initial APG weights for medical visits were developed taking into account the disabling of Modifier 27 (i.e., payment for additional medical visits on the same date of service was packaged in the payment for the primary medical visit). In the future, Modifier 27 may be activated by re-weighting APG 449, with the other medical visit APG weights revised accordingly.

CPT Modifier 50 (Bilateral Procedure): CPT Modifier 50 should be used to report bilateral procedures that are performed during the same operative session.

** Note: This modifier should not be used to report surgical procedures that are identified in code terminology as “bilateral” or to report procedures identified in code terminology as “unilateral or bilateral.” When Modifier 50 is used, both procedures will be reimbursed, but the APG Grouper/Pricer calculates the payment at 100% rate for the first procedure and at 50% of the rate for the second procedure.

CPT Modifier 52 (Reduced Services): CPT Modifier 52 should be used when a service or procedure is partially reduced or eliminated at the physician’s discretion or when an initial bilateral procedure cannot be performed as such. As with CMS, NYSDOH does not allow the use of Modifier 52 when the endoscopic procedure is incomplete and there is a CPT or HCPCS/level II code to describe the actual service performed. If a code is available that fully describes the outpatient procedure performed, this code choice supersedes the reporting of a code describing the intended, albeit not performed, procedure. When Modifier 52 is used, the payment for the procedure will be discounted by 50%.

CPT Modifier 59 (Separate Procedures or Distinct Procedural Service): CPT Modifier 59 should be used to designate instances when distinct and separate multiple services with the same APG are provided to the patient on a single date of service (eg. separate encounters, different surgeries, different sites or organ systems, separate incisions). Modifier 59 may also be used to report those procedures/services considered a component of another procedure, when the service is carried out independently or considered unrelated or distinct from the other procedures/services provided at the same time. Normally when multiple procedures map to the same APG, the additional occurrences (beyond the first) will consolidate (i.e., no payment at the line level). However, when Modifier 59 is used, the additional same APG procedures will pay at 50% of the amount paid for the first procedure.

CPT Modifier 73 (Terminated Procedure): CPT Modifier 73 should be used when a surgical procedure is cancelled subsequent to the patient’s surgical preparation (but prior to the administration of anesthesia) due to extenuating circumstances or those that threaten the well-being of the patient. ** Note: Modifier 73 should not be used for elective cancellation of a procedure before administration of anesthesia. If Modifier 73 is reported and the procedure is an approved Ambulatory Surgery Center service, the payment will be discounted by 50%.

CPT Modifier UD (340B Drugs): Drugs obtained at the 340B price are identified by the UD modifier and it is not required that an NDC code be provided when submitting a claim. However, the actual acquisition cost of the drug should be listed on the claim. See the Medicaid Update (December 2007 and April 2008) articles entitled ‘National Drug Code Required on Medicaid Claims’ and ‘Coming Soon: Easy Identification of 340B Priced Claims’ for details at the following links:


Certain rate codes and claims remain outside of APGs and will continue to be paid under existing Medicaid payment mechanisms. These include:
** Services provided outside of a facility’s licensure under Article 28 of the Public Health Law (e.g. Mental Hygiene and OMRDD specialty services);
** Child rehabilitation;
** Payments made to Medicaid Obstetrical & Maternal Services (MOMS) Programs and Health Supportive Services providers;
** Payments for HIV Counseling/Testing;
** Payments for Tuberculosis/Directly Observed Therapy;
** Payments for Ordered Ambulatory Services;
** Monthly billings of Medicare co-pays and deductibles for dual eligible enrollees;
** Payments for Screening for Orthodontic Treatment;
** Payments for Comprehensive Medicaid Case Management/Targeted Case Management.

Rate codes which have not been subsumed by APG rate codes are referred to as carved out rate codes.

No comments:

Post a Comment

Popular Posts