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Claim Payment Policy

Title:Modifiers 26 (Professional Component) and TC (Technical Component)

Policy #:03.00.20e


Application of Claim Payment Policy is determined by benefits and contracts. Benefits may vary based on product line, group or contract. Medical necessity determination applies only if the benefit exists and no contract exclusions are applicable. Individual member benefits must be verified.

In products where members are able to self-refer to providers for care and services, members are advised to use participating providers in order to receive the highest level of benefits.When services can be administered in various settings, the Company reserves the right to reimburse only those services that are furnished in the most appropriate and cost-effective setting that is appropriate to the member’s medical needs and condition. This decision is based on the member’s current medical condition and any required monitoring or additional services that may coincide with the delivery of this service.

For more information on how Claim Payment Policy Bulletins are developed, go to the About This Site section of this Medical Policy Web site.


Intent
The intent of this policy is to communicate the Company's professional provider reporting requirements for Modifier 26 (professional component) and Modifier TC (technical component).

For information on policies related to this topic, refer to the Cross References Table in this policy.

Description
Certain procedures involve a combination of a physician component and a technical component. For example, the professional component of a radiology service includes the physician's supervision of the radiology technician and the interpretation by the physician of the radiology service. The technical component of the radiology service includes the work of the radiology technician and the overhead costs associated with the radiology service. Other procedures may consist of either a professional component only (eg, physician office visits) or a technical component only (eg, flow cytometry codes) indicated.

The Centers for Medicare & Medicaid Services (CMS) maintains the Medicare Physician Fee Schedule Database indicators for professional components (PC) and technical components (TC). These indicators establish the appropriate reporting of procedure codes for component services (PC/TC). When it is appropriate to report PC or TC services, the corresponding modifier (Modifier 26 [professional component] or Modifier TC [technical component]) is appended to the procedure code.

The professional component (PC) is the portion of the procedure or service performed by a physician, which includes the interpretation, analysis, and a detailed signed written report of the results of the procedure or service.

The technical component (TC) comprises the portion of the procedure or service performed by a technician or other nonphysician personnel and the equipment used for the procedure or service and, in most cases, the ownership of the equipment used for the procedure or service. The TC does not involve any direct physician care.

Global service refers to procedure codes that include both the professional and technical components. These procedure codes, when reported with neither the modifier for the professional component (26) nor the modifier for the technical component (TC), are considered to be global services. Alternatively, when these procedure codes are reported with either Modifier (26 or TC), they are considered to be reported for the corresponding component, only. Global service codes are never reported with both modifiers to indicate that the global service has been performed. The term global services does not refer to a reimbursement mechanism or to a time period associated with a surgical procedure.

Policy
This policy applies only to professional provider claims.

The Company applies the following Medicare Physician Fee Schedule Database indicators for professional component (PC) and technical component (TC) services to procedure codes, as reported by professional providers, to determine the appropriate reporting of Modifier 26 (professional component) and Modifier TC (technical component):


0 =
Physician Service Codes: This indicator identifies procedure codes that describe physician services (eg, office visits, surgical procedures). The concepts of professional and technical components do not apply to procedure codes with a 0 indicator, as these services cannot be split into professional and technical components.
  • All professional claims received with procedure codes that carry a 0 indicator appended with either Modifier 26 or Modifier TC will be denied as: Invalid procedure code/modifier combination.
1 =
Diagnostic Tests or Radiology Services: This indicator identifies procedure codes that describe diagnostic tests (eg, pulmonary function tests) or therapeutic radiology services (eg, radiation therapy), that have both a professional and a technical component.
    SERVICES PERFORMED IN A FACILITY SETTING:
    • Professional claims received for services performed in facility settings with procedure codes that carry a 1 indicator must be appended with Modifier 26 to identify the service as a professional component of the diagnostic test or radiology service performed. Professional claims received without Modifier 26 appended to the procedure code will be denied as: Modifier 26 required for this place of service. (The technical component of this service is provided by the facility.)
      • Procedure codes that carry a 1 indicator are only eligible for reimbursement consideration to professional providers in facility settings as professional component services.
    • Professional claims received for services performed in facility settings with procedure codes that carry 1 indicator appended with Modifier TC will be denied for reimbursement consideration. Professional claims received with Modifier TC appended to the procedure code will be denied as: Procedure code modifier cannot be reported in this place of service. (The technical component of this service is provided by the facility.)
    SERVICES PERFORMED IN A NONFACILITY SETTING:
    • Professional claims received for services performed in nonfacility settings with procedure codes that carry a 1 indicator appended with Modifier 26 will be processed as professional component services. Professional claims received without either the Modifier 26 or Modifier TC appended to the procedure code will be processed as a global service.
    • Professional claims received for services performed in nonfacility settings with procedure codes that carry a 1 indicator appended with Modifier TC will be processed as technical component services. However:
      • Procedure codes that carry a 1 indicator appended with Modifier TC should only be reported by the billing provider who owns the equipment and when a different professional provider performs the professional component service.
    • When the billing provider performs both the professional and the technical components (ie, the global service) in the nonfacility setting, the procedure code should not be reported with Modifier 26 and/or Modifier TC.
      • Professional claims received without either Modifier 26 or Modifier TC appended to the procedure code will be processed as a global service.
2 =
Professional Component Only: This indicator identifies stand-alone professional component procedure codes that describe only the physician work portion of selected diagnostic tests for which there is also an associated stand-alone technical component procedure code and one that describes the global test. Therefore, procedure codes that carry a 2 indicator do not require and should not be appended with either Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 2 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
3 =
Technical Component Only: This indicator identifies stand-alone technical component procedure codes that describe only the technical component of selected diagnostic tests for which there may or may not also be an associated professional component stand-alone code and one that describes the global test. Therefore, procedure codes that carry 3 indicator do not require and should not be appended with either Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 3 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
4 =
Global Test Only: This indicator identifies global diagnostic stand-alone procedure codes for which there are associated professional component-only and technical component-only stand-alone codes. Therefore, procedure codes that carry 4 indicator do not require and should not be reported with either Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 4 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
5 =
Incident to-Codes: This indicator identifies procedure codes that describe services that are incidental to a physician's service or a service that is provided by auxiliary personnel employed by a physician and performed under the direct supervision of the employing physician. Therefore, procedure codes that carry a 5 indicator do not require and should not be reported with either Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 5 indicator appended with Modifier 26 and/or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
6 =
Laboratory Physician Interpretation Codes: This indicator identifies certain clinical laboratory codes for which separate reimbursement may be considered for the interpretations of the corresponding tests by physicians. Procedure codes with the 6 indicator are eligible to be reported with Modifier 26 to identify the interpretation of these clinical laboratory tests. However, these procedure codes should not be reported with Modifier TC, as the actual performance of the test is the technical component and is considered for reimbursement under the laboratory fee schedule. Procedure codes that carry a 6 indicator do not require and should not be appended with Modifier TC.
    SERVICES PERFORMED IN A FACILITY SETTING:
    • Professional claims received for services performed in facility settings with procedure codes that carry a 6 indicator appended with Modifier 26 will be processed as professional component services.
      • Professional claims received without Modifier 26 appended to the procedure code that carry a 6 indicator will be denied as: Modifier 26 required for this place of service.
      • Procedure codes that carry a 6 indicator are only eligible to be reported by professional providers as a professional service in a facility setting.
    • Professional claims received for technical component services performed in facility settings with procedure codes that carry a 6 indicator appended with Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
    SERVICES PERFORMED IN A NONFACILITY SETTING:
    • Professional claims received for services performed in nonfacility settings with procedure codes that carry a 6 indicator appended with Modifier 26 will be processed as physician interpretation services.
    • Professional claims received for services performed in nonfacility settings with procedure codes that carry a 6 indicator not appended with Modifier 26 will be processed as clinical laboratory tests.
    • Professional claims received for technical component services performed in nonfacility settings with procedure codes that carry a 6 indicator appended with Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
7 =
Physical/Occupational Therapy Service: This indicator identifies procedure codes that are used to report rehabilitation services. The concepts of professional and technical components do not apply to these codes, as these services cannot be split into professional and technical components. Therefore, procedure codes that carry a 7 indicator should not be reported with Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 7 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
8 =
Physician Interpretation Codes: This indicator identifies the professional component of clinical laboratory codes for which separate reimbursement may be considered only if the physician interprets an abnormal smear in a facility setting. Therefore, procedure codes that carry an 8 indicator do not require and should not be reported with Modifier 26 or Modifier TC.
  • Professional claims received with a procedure code that carry an 8 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
9 =
Concept Does Not Apply Codes: This indicator identifies procedure codes for which the concepts of professional and technical components do not apply. Therefore, procedure codes that carry a 9 indicator should not be reported with Modifier 26 or Modifier TC.
  • Professional claims received with procedure codes that carry a 9 indicator appended with either Modifier 26 or Modifier TC will be denied for reimbursement consideration as: Invalid procedure code/modifier combination.
ADDITIONAL INFORMATION AND REQUIREMENTS:

The documentation in the medical record must support the work (ie, professional component-service, technical component-service, or both [global]) reported by the provider. The professional component includes and the medical record must reflect the interpretation, analysis, and a detailed signed written report of the results of the procedure or service.

Inclusion of a code in this policy does not guarantee reimbursement. Eligibility, benefits, limitations, exclusions, precertification/referral requirements, provider contracts, and applicable policies apply.

Guidelines
This policy is consistent with Current Procedural Terminology (CPT®) and Centers for Medicare & Medicaid Services' (CMS) reporting requirements.

This policy is applicable to all products.

ADDITIONAL CLAIMS INFORMATION
  • Medical records, reports, or other documentation should not be appended to the claim unless specifically required and/or requested by the Company.
  • The following claim denials received by participating/network providers in association with the incorrect reporting/nonreporting of Modifiers 26 and/or TC are not billable to members:
    • Modifier 26 required for this place of service
    • Invalid procedure code/modifier combination
    • Procedure code modifier cannot be reported in this place of service
References
Beebe M, ed. Principles of CPT® Coding. 4th ed. Chicago, IL: American Medical Association Press; 2005.

Centers for Medicare & Medicaid Services (CMS). Carriers Manual. Part 3: Claims Process. Chapter 15: Fee Schedule for Physicians’ Service. §15900. [CMS Web site]. 10/01/99. Available at: http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS021921&intNumPerPage=10. (zip folder document: b3_15000_to_15903.doc). Accessed June 14, 2007.

Centers for Medicare & Medicaid Services (CMS). CMS Manual System. Pub 100-04: Medicare Claims Processing. Transmittal 1482, change request 5980. April update to the 2008 Medicare physician fee schedule database. [CMS Web site]. 03/21/08. (Effective: 01/01/08). Available at: http://www.cms.hhs.gov/transmittals/downloads/R1482CP.pdf. Accessed March 28, 2008.

Centers for Medicare & Medicaid Services (CMS). Medicare Claims Processing Manual. Chapter 23: Fee Schedule Administration and Coding Requirements. [CMS Web site]. 07/21/06. Available at: http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912&intNumPerPage=10. Accessed June 14, 2007.

Centers for Medicare & Medicaid Services (CMS). National Physician Fee Schedule Relative Value File. [CMS Web site]. Available at: http://www.cms.hhs.gov/PhysicianFeeSched/PFSRVF/list.asp?intNumPerPage=all&submit.x=18&submit.y=10. Accessed June 7, 2007.

Hall DC, Orme N, eds. 2007 Ingenix University: Understanding Modifiers. Salt Lake City, UT: Ingenix, Inc.; 2006.

Highmark Medicare Services. Medicare Part B Reference Manual. Appendix B: Modifiers. [Highmark Medicare Services Web site]. 07/01/06. Available at:http://www.highmarkmedicareservices.com/partb/refman/pdf/appendix-b.pdf. Accessed June 14, 2007.

Highmark Medicare Services. Medicare Part B Reference Manual. Chapter 13: Medicare Reimbursement. [Highmark Medicare Services Web site]. 01/01/07. Available at:
http://www.highmarkmedicareservices.com/partb/refman/pdf/chapter13.pdf. Accessed June 14, 2007.
Coding Table

Inclusion of a code in this table does not imply reimbursement. Eligibility, benefits, limitations, exclusions, precertification/referral requirements, provider contracts, and Company policies apply.

The codes listed below are updated on a regular basis, in accordance with nationally accepted coding guidelines. Therefore, this policy applies to any and all future applicable coding changes, revisions, or updates.

In order to ensure optimal reimbursement, all health care services, devices, and pharmaceuticals should be reported using the billing codes and modifiers that most accurately represent the services rendered, unless otherwise directed by the Company.

Code SystemCode Number(s) and Narrative(s)
CPTRefer to Medicare's Physician Fee Schedule Search page to perform a search for Current Procedural Terminology (CPT) codes and the corresponding professional component and technical component indicator; Available at:
http://www.cms.gov/PhysicianFeeSched/PFSRVF/list.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=descending&intNumPerPage=10
ICD ProcedureN/A
ICD DiagnosisN/A
HCPCS Level IIRefer to Medicare's Physician Fee Schedule Search page to perform a search for Health Care Common Procedural Coding System (HCPCS) codes and the corresponding professional component and technical component indicator; Available at:http://www.cms.gov/PhysicianFeeSched/PFSRVF/list.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=descending&intNumPerPage=10
Modifiers26: Professional component
TC: Technical component
Revenue CodesN/A
      Cross References
      Version Effective Date: 10/01/2008
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      The Policy Bulletins on this web site were developed to assist AmeriHealth and its subsidiaries ("AmeriHealth") in administering the provisions of the respective benefit programs, and do not constitute a contract. If you are an AmeriHealth member, please refer to your specific benefit program for the terms, conditions, limitations and exclusions of your coverage. AmeriHealth does not provide health care services, medical advice or treatment, or guarantee the outcome or results of any medical services/treatments. The facility and professional providers are responsible for providing medical advice and treatment. Facility and professional providers are independent contractors and are not employees or agents of AmeriHealth. If you have a specific medical condition, please consult with your doctor. AmeriHealth reserves the right at any time to change or update its Policy Bulletins. ©2012 AmeriHealth, Inc. All Rights Reserved.  Current Procedural Terminology ©2012 American Medical Association. All Rights Reserved.
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