The Health and Human Services Office of General Counsel (OGC) has provided guidance that Medicare contractors that process both institutional and professional claims have discretion to automatically deny claims billed with the GZ modifier.
The GZ modifier indicates that an Advance Beneficiary Notice (ABN) was not issued to the beneficiary and signifies that the provider expects denial due to a lack of medical necessity based on an informed knowledge of Medicare policy. Medicare Contractors will automatically deny claim line(s) items submitted with a GZ modifier, effective for dates of service on or after July 1, 2011. Further, your Medicare contractor will not perform complex medical review on any claim line item(s) submitted with the GZ modifier. In addition, line items denied due to the presence of the GZ modifier will reflect a Claim Adjustment Reason Code of 50 (These services are non-covered services because this is not deemed a “medical necessity” by the payer.) and a Group Code of CO (Contractual Obligation) to show provider/supplier liability.