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Cracking the Code: Qualifying and Quantifying the QZ Modifier

June 10, 2024

It was called the Enigma machine. During WWII, it was Germany’s fail-safe encryption device that would secure all communications between its fleet of U-boats and the naval high command. A coded message would go out and be received. The message could only be deciphered using the Enigma. If the allies could only get their hands on one of those machines (without the Germans knowing it), they could crack the code and surveil its secrets.

One of the enigmas experienced over the years by anesthesia providers and their coding staff has surrounded the meaning and application of the QZ modifier. Medicare loves its modifiers; and, apparently, third-party payers (e.g., Aetna, BCBS, Cigna, UHC, Humana, etc.) like them as well, since many of them have adopted the full array of modifiers that were originally created by Medicare. Of note is the Q-suite of modifiers, including QY, QK, QX, Q6, QS and, of course, QZ. It is this last member of the Q family we want to address in today’s alert.

Defining Our Terms 

If you were to look up the definition of QZ assigned by the entity that created the modifier, i.e., Medicare, you would find the following entry in the Medicare Claims Processing Manual (MCPM): “QZ – CRNA service: Without medical direction by a physician.” (Ch 12, Sec 140.3.3.) So, that raises the question: what does it mean to be “without medical direction”? We know that the MCPM is quite clear that medical direction is abrogated, absent, not achieved unless the anesthesiologist meets all seven requirements, which are:

  • Performs a pre-anesthetic examination and evaluation;
  • Prescribes the anesthesia plan;
  • Personally participates in the most demanding procedures in the anesthesia plan, including, if applicable, induction and emergence;
  • Ensures that any procedures in the anesthesia plan that he or she does not perform are performed by a qualified individual;
  • Monitors the course of anesthesia administration at frequent intervals;
  • Remains physically present and available for immediate diagnosis and treatment of emergencies; and
  • Provides indicated post-anesthesia care

The implication is that if even one of the above requirements is not met, the service cannot be deemed to be medically directed. From a practical perspective, then, one can call such a scenario “incomplete medical direction” or “non-medical direction.” The question then becomes this: since the service cannot be deemed to be medically directed, but a CRNA is present throughout the case, would this not meet Medicare’s definitional threshold of QZ?

Delineating the Parameters

The debate surrounding the above question has raged for years, with the American Society of Anesthesiologists (ASA), early on, urging that such a scenario (where the anesthesiologist met some of the medical direction requirements but not all) fall under the category of “medical supervision”—an anesthesia-specific term of art that the Centers for Medicare and Medicare Services (CMS) describes as a physician service involving “more than 4 concurrent anesthesia procedures.” Medical supervision is reflected by the AD modifier and limits the anesthesiologist’s reimbursement to three base units (in each such case) along with one time unit if there is documentation that he or she was present for induction.

What is important to note in all this is that the creator of these modifier conditions—namely, CMS—does not define the AD modifier as anything other than involvement with 5 or more simultaneous cases. It does not expressly include the idea of incomplete medical direction.

To bolster the notion that incomplete medical direction may be billed using the QZ modifier, a federal district court in California ruled in 2018 that submitting QZ in connection with a case where the anesthesiologist provided some of the elements of medical direction—but not all—does not constitute a false claim. Indeed, the court went on to rule that:

[T]he most natural reading of the [Medicare Claims Processing] Manual is that unless the service was medically directed, the QZ may be employed. That language does not suggest that CRNAs may operate independently in order to use the QZ code – it merely states that the QZ code may not be used if all the requirements for medical direction have been satisfied. Outside of that scenario, use of the QZ code does not appear to be prohibited by any rule or regulation.

It is our understanding that, at the time of this writing, no appellate court has overruled this decision, and thus it stands as an important and uncontested precedent. And while this decision can only be legally enforced in a single jurisdiction within a single state, anesthesia providers throughout the country can reasonably assert that billing QZ for incomplete medical direction has judicial support.

But it’s not just one court case on which American anesthesia groups can rely when deciding whether or not the QZ modifier is appropriate in cases of incomplete medical direction. Over the last few years, virtually all of the Medicare administrative contractors (MACs) throughout the country have added their seal of approval to the use of QZ where the medical direction requirements were not fully met. Here is an example from Novitas in 2019:

Q: In the event that an anesthesiologist is medically directing one to four concurrent cases and due to some intervening factors occurring, the medically directing anesthesiologist is unable to be present at emergence, is not immediately available for some portion of the case or fails to note periodic monitoring on the chart, is it permissible to bill the case as “QZ”?

A: If the medically directing anesthesiologist does not meet the requirements above for medical direction of anesthesia services, the CRNA reports modifier QZ; the anesthesiologist does not bill the service at all.

Based on the above guidance from the MCPM, U.S. District Court for the Eastern District of California and the several MACs, one can conclude that it is appropriate to bill QZ in cases where a CRNA is present in the room throughout the procedure and the anesthesiologist either (a) is not involved in the patient’s care, or (b) fails to meet one or more of the seven medical direction requirements.

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