Payment Policy

Policy Num:       PP.002.002
Policy Name:     Discontinued Procedures/Reduced Services – Modifiers 73 & 74
Policy ID:          [PP.002.002][Ac/ /L M P ][0.0.0]

Last Review:      August 26, 2024
Next Review:     August 20, 2025

Related Policies:

Discontinued Procedures/Reduced Services – Modifiers 73 & 74

Summary

The term "Discontinued Procedure" designates a surgical or diagnostic procedure provided by a physician or other health care professional that was less than usually required for the procedure as defined in the Current Procedural Terminology (CPT®) book.
This policy describes the billing instructions and guidelines when billing for a discontinued procedure using modifiers 73 or 74.

Modifier 73:

Description

Discontinued Outpatient Hospital/Ambulatory Surgery Center (ASC) Procedure Prior to the Administration of Anesthesia: Due to extenuating circumstances or those that threaten the well-being of the patient, the physician may cancel a surgical or diagnostic procedure subsequent to the patient's surgical preparation (including sedation when provided, and being taken to the room where the procedure is to be performed), but prior to the administration of anesthesia (local, regional block(s) or general). Under these circumstances, the intended service that is prepared for but cancelled can be reported by its usual procedure number and the addition of modifier 73.
Note: The elective cancellation of a service prior to the administration of anesthesia and/or surgical preparation of the patient should not be reported.
For physician reporting of a discontinued procedure, see modifier 53.

Modifier 74

Description

Discontinued Outpatient Hospital/Ambulatory Surgery Center (ASC) Procedure After Administration of Anesthesia: Due to extenuating circumstances or those that threaten the well-being of the patient, the physician may terminate a surgical or diagnostic procedure after the administration of anesthesia (local, regional block(s), general) or after the procedure was started (incision made, intubation started, scope inserted, etc.). Under these circumstances, the procedure started but terminated can be reported by its usual procedure number and the addition of modifier 74.
Note: The elective cancellation of a service prior to the administration of anesthesia and/or surgical preparation of the patient should not be reported.
For physician reporting of a discontinued procedure, see modifier 53.

Policy Statements

Payment Policy:

Modifiers 73 and 74 provide a way for hospitals to report and be paid for expenses incurred in preparing a patient for a procedure and scheduling a room for performing the procedure where the service is subsequently discontinued. This instruction applies to both hospital outpatient departments (HOPDs) and to ambulatory surgical centers (ASCs).
Discontinued Procedures/Reduced Services – Modifiers  73 & 74

Modifier 73 is used by the facility to indicate that a procedure requiring anesthesia was terminated due to extenuating circumstances or to circumstances that threatened the wellbeing of the patient after the patient had been prepared for the procedure (including procedural pre-medication when provided), and been taken to the room where the procedure was to be performed, but prior to administration of anesthesia. For purposes of billing for services furnished in the hospital outpatient department, anesthesia is defined to include local, regional block(s), moderate sedation/analgesia (“conscious sedation”), deep sedation/analgesia, or general anesthesia. This modifier code was created so that the costs incurred by the hospital to prepare the patient for the procedure and the resources expended in the procedure room and recovery room (if needed) could be recognized for payment even though the procedure was discontinued.

Modifier 74 is used by the facility to indicate that a procedure requiring anesthesia was terminated after the induction of anesthesia or after the procedure was started (e.g., incision made, intubation started, scope inserted) due to extenuating circumstances or circumstances that threatened the well-being of the patient.

Reimbursement of discontinued/reduced procedures with Modifier 73 or 74 is 70% of the allowable amount for the primary unmodified procedure or facility fee contracted.

BILLING/CODING INFORMATION:

Requirements:
1. Anesthesia - For purposes of billing for services furnished in the hospital outpatient department or ASC, anesthesia is defined to include:
     a. Local block(s)
     b. Regional block(s)
     c. Moderate sedation/analgesia (“conscious sedation”)
     d. Deep sedation/analgesia
     e. General anesthesia

2. Reason(s) for cancellation
      a. Elective cancellation:
          1) Patient did not show for the procedure
          2) Patient is non-compliant
          3) Patient changed their mind about having the procedure or having it today
          4) Facility needed to reschedule due to various reasons (e.g. space availability, staffing concerns, supply issues, physician’s schedule changed, etc.)
     b. Cancellation due to medical complications:
         1) Cancellation because the patient’s medical condition suddenly and unexpectedly changed with a risk to the patient’s well-being. Examples include (but are not limited to):
             • The patient develops an allergic reaction to a drug administered at the facility.
             • Upon injection of a retrobulbar block, the patient experiences a retrobulbar hemorrhage which prevents beginning the procedure.
             • After anesthesia has been accomplished and the surgeon has made a preliminary incision, the patient’s blood pressure increases suddenly and the surgery is terminated to avoid  increasing surgical risk to the patient.
   c. Other extenuating circumstances:
       1) Cancellation for other extenuating circumstances not related to complications
       2) The “extenuating circumstances” should be unanticipated, not avoidable, and occurring after the patient is prepared and taken to the procedure room.

3. Documentation for discontinued or terminated procedures
   a. In all cases when facilities report discontinued or terminated procedures with a modifier 73, 74 for reimbursement, the facility needs to keep a copy of the procedure documentation on file and        available to submit for claim review upon request
   b.The facility is responsible to coordinate with the surgeon or physician to ensure the documentation includes the following information:
     1) Reason for termination of surgery;
     2) Services actually performed;
     3) Supplies actually provided;
     4) Services not performed that would have been performed if surgery had not been terminated;
     5) Supplies not provided that would have been provided if the surgery had not been terminated;

    6) Time actually spent in each stage, e.g., pre-operative, operative, and post-operative;
    7) Time that would have been spent in each of these stages if the surgery had not been terminated;
    8) CPT or HCPCS code for procedure had the surgery been performed.
Procedure terminated/discontinued before anesthesia is provided.
  a. Procedures which are discontinued or terminated before planned anesthesia has been provided should be reported with modifier 73.
   1) The patient must be prepared for the procedure and taken to the room where the procedure is to be performed to report modifier 73.
   2) Modifier 73 may not be used if anesthesia was not planned for the procedure.
Modifier 73 provides a way for hospitals and ASCs to report and be paid for expenses incurred. Some supplies and resources are expended, but they are not consumed to the same extent had anesthesia been fully induced, and the surgery completed.
The reimbursement for modifier 73 includes:
• Preparing a patient for a procedure with anesthesia.
• Procedural pre-medication when provided.
• Scheduling a room for performing the procedure.
• Resources expended in the procedure room.
• Resources expended in the recovery room (if needed).
• The member’s usual copayment, coinsurance, and deductible provisions apply.

Multiple Procedures and Modifier 73:
• Modifier 73 is considered valid on a maximum of one procedure code for the patient encounter.
• When one or more of the planned procedures is completed, report the completed procedure as usual. Any others that were planned and not started are not reported.
• When more than one procedure is planned and none of the planned procedures are completed, the first procedure that was planned to be done is reported modifier 73. Any others that were planned and not started are not reported.
• When a bilateral procedure is planned and is discontinued/terminated, only a unilateral procedure (the first side) may be reported with modifier 73. The second side is not reported. Do not report modifier 50 in combination with modifier 73 on the same procedure code.
• Multiple procedure price reduction rules do not apply, since only one procedure code will be reported.

Procedure terminated/discontinued after anesthesia is induced or the procedure is initiated
a. Procedures which are discontinued or terminated after anesthesia is induced or the procedure is initiated should be reported with modifier 74.
1) The patient must be prepared for the procedure and taken to the room where the procedure is to be performed to report modifier 74.
2) Modifier 74 may not be used if anesthesia was not planned for the procedure.

The resource requirements for procedures discontinued or terminated after anesthesia is induced or the procedure is initiated are somewhat less, but similar to, the resources expended if the planned procedures had been completed, therefore procedures reported with modifier 74 appended will be reimbursed at the usual applicable fee schedule rate for the facility
The reimbursement for modifier 74 includes:
• Preparing a patient for a procedure with anesthesia.
• Procedural pre-medication when provided.
• Scheduling a room for performing the procedure.
• Resources expended in the procedure room.
• Resources expended in the recovery room (if needed).
• The member’s usual copayment, coinsurance, and deductible provisions apply.
Procedures for which anesthesia is not planned that are terminated, discontinued, or reduced
• Procedures may be performed in the ASC or outpatient hospital department for which anesthesia is not planned (e.g. discontinued radiology procedures and other procedures that do not require anesthesia).
• When these procedures are terminated, discontinued, or otherwise reduced after the patient is prepared and taken to the room where the procedure is to be performed, report with modifier 73 or 74.

The operative report must state why and when the procedure was discontinued.

Reimbursement of discontinued/reduced procedures with Modifier 73 or 74 is 70% of the allowable amount for the primary unmodified procedure.

Policy Guidelines

Coding Guidelines:
Modifiers provide a way for hospitals to report and be paid for expenses incurred in preparing a patient for a procedure and scheduling a room for performing the procedure where the service is subsequently discontinued. The following is applicable to both outpatient hospital departments and to ambulatory surgical centers (ASC).

Claims submitted for payment for terminated surgery must include an operative report kept on file by the ASC, and made available, if requested. The operative report should specify the following:
• Reason for termination of surgery
• Services actually performed
• Supplies actually provided
• Services not performed that would have been performed if surgery had not been terminated
• Supplies not provided that would have been provided if the surgery had not been terminated
• Time actually spent in each stage, e.g., pre-operative, operative, and post-operative
• Time that would have been spent in each of these stages if the surgery had not been terminated and
• HCPCS code for procedure had the surgery been performed

Reimbursement Guidelines (Modifiers 73/74):
When planned procedures are discontinued in the ASC or outpatient hospital, the facility fee allowance will be reduced, depending upon:
• Whether the discontinuation of the procedure was for elective reasons, medical complications which threatened the patient safety and wellbeing, or other extenuating circumstances.
• Whether anesthesia was or was not planned for the procedure.
• Whether the patient had been taken to the procedure room.
• Whether the planned anesthesia had been administered or not at the time the procedure was discontinued.

Use modifier 73 to report discontinued outpatient or hospital ambulatory surgical center (ASC) procedure prior to the administration of anesthesia.

Appropriate Usage

Inappropriate Usage

BENEFIT APPLICATION

Benefits are determined by the group contract, member benefit booklet, and/or individual subscriber certificate in effect at the time services were rendered. Benefit products or negotiated coverages may have all or some of the services discussed in this medical policy excluded from their coverage.

Medicare National Coverage

20.6.4 - Modifiers 73 and 74 (Rev. 11937; Issued: 03-31-23; Effective: 04-01-23; Implementation: 04-03-23)

References

References
1. American Medical Association, Coding with Modifiers
2. American Medical Association, Current Procedural Terminology (CPT®) and associated publications and services
3. CMS. Medicare Claims Processing Manual (Pub. 100-4). Chapter 4 – Part B Hospital (Including Inpatient Hospital Part B and OPPS, § 20.6.4.
4. CMS. Medicare Claims Processing Manual (Pub. 100-4). Chapter 14 – Ambulatory Surgical Centers, §40.4.5. CMS IOM, Publication 100-04, Medicare Claims Processing Manual, Chapter 4, Section 20.6.4 

Codes

Applicable Modifiers

As per correct coding guidelines

Policy History