Word to the Wise: the KX Modifier

• By David Kopf
• Feb 01, 2012

One element of HME claims that providers must be particularly attentive to is the KX modifier. While the modifier is applied to many DME claims, many providers could be using it indiscriminately to the worst, or at the least applying it without full consideration of what it entails. Moreover, it could represent a considerable audit threat.

“I have a funny anecdote I like to share about the KX modifier,” says Wayne van Halem, CFE, AHFI, president of The van Halem Group LLC, a firm that helps providers respond to and appeal audits. “We do compliance assessments where we come into an organization and assess how they’re doing operationally compliancewise. We went into the billing operations of a client, and sat there while I watched a biller submit a claim and I noticed that the claim had the KX modifier on it, and I asked her why she put the modifier on the claim, and she looked at me like I was a complete idiot, as though to say, ‘Duh, it won’t pay without it.’”

The KX modifier has become almost a default position for providers, with some HMEs putting the KX modifier on nearly every claim. Getting the claim through is not the purpose of the KX modifier, van Halem says.

“The KX modifiers means something very important,” he says. “It means the provider knows that the patient qualifies for coverage based on the LCD. If providers put a KX modifier on a claim and get audited, and it is determined that the patient is not qualified for coverage, then that provider could be liable for a false claim violation. … And the penalty for a false claim is $11,000.

“Providers who are billing a claim with a KX modifier without requesting or looking at documentation before putting that modifier on a claim are taking a huge, huge gamble,” he warns.

To give an idea of how ingrained the application of the modifier is, some HME billing in claims systems automatically appends the KX modifier to a claim, van Halem notes. The provider doesn’t have the option to decide whether or not to apply it.

“It should be something that the provider puts on the claim once they have the documentation and have reviewed it,” he says.

The situation regarding the KX modifier isn’t as simple as providers trying to simply push claims through, van Halem notes. Medicare is applying the modifier to more and more product categories. That could be bait in that could land unsuspecting providers in an audit trap.

“The OIG has had [the KX modifier] in their OIG work plan and it is in there again this year,” he says. “They keep tweaking the terminology. All of this makes me think that they’re using this KX modifier as a tool to implement false claims violations on providers.

“And it’s not just DME,” he continues. “KX modifiers are in other types of provider services, as well — physical therapy, all sorts of services.”

That said, this move by CMS appears to be a work in progress, van Halem says.

“The government is not there yet,” he explains. “I’ve not seen any false claim violations with a KX modifier, but they are certainly denying claims, and I think they’re moving toward that. I think this is a tool that government is looking to use, and they’re just building up to it. It scares the heck out of me, quite frankly.”

This article originally appeared in the February 2012 issue of HME Business.