Skip to main content

Patient Relationship Codes: Why We Need Them and the Unintended Consequences of Using Them

This author takes a closer look at five HCPCS Level II modifier codes developed by CMS, and how complying with the mandate can result in non-payment of claims.

Medicine rarely delves into the realm of governmental regulatory issues. However, social or economic issues in the form of regulations are increasingly guiding how we practice medicine and provide care to our patients. In the social sciences, the law of unintended consequences is explained as the actions of governments or people that have consequences that are unanticipated or unintended. These unintended consequences are grouped into three categories: unexpected benefit, unexpected drawback, and perverse result.  

The Centers for Medicare and Medicaid Services (CMS) have been setting healthcare policy and precedent for decades. As CMS is one of the largest insurance providers in the country, and has the power of the federal government behind it, decisions that are made have far-reaching implications, and many times, unintended—and perverse—consequences.

It is not uncommon to have CMS publish “rules” that are open for public comment and then find themselves in the Federal Register, ready to be implemented nationwide. However, many times, one branch of government does not necessarily communicate with another, and often not with the commercial carriers that provide secondary insurance. Since CMS automatically sends claims for payment to the secondary insurance carriers, this has the potential for perverse outcomes. One instance of recent note was the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) patient relationship categories and codes.1

MACRA ushered in the Quality Payment Program (QPP), a way to encourage clinicians to provide more cost-effective care through financial incentives. To do that, the relationship between clinician and patient needed to be established, as it would be unfair to attribute the cost of an aortic aneurysm repair to the orthopedist who performed a knee replacement in the same calendar year, and definitely not fair to assign all those costs to the primary care provider.

In order to facilitate the appropriate attribution of patients and episodes of care to different providers, CMS developed and finalized five “relationship categories.” These categories are Healthcare Common Procedure Coding System (HCPCS) Level II modifier codes that are to be reported on HCFA 1500 claims forms to identify the relationship of the clinician to the care of the beneficiary. These are outlined in Table 1.

At the moment, this reporting is voluntary; however, it will eventually become mandatory. The opportunity to start relationship reporting began in 2018. So, like good compliant practitioners, our practice started reporting our relationship code. Although everyone needs to pick their own HCPCS relationship code modifier depending upon the services that are provided, we, as hyperbaric and wound care physicians, chose X4—perhaps somewhat optimistically.

The claims started going out, and the claims started being denied for payment by the secondary insurance carriers, especially the MediGap providers. After multiple phone calls, it became clear; the claims were being denied because of the modifier. No one recognized the modifier, and therefore, the claims were being denied for payment. The HCFA 1500 form has box 24D for modifiers. Seemingly, no one at the commercial carriers got the memo that these five relationship HCPCS codes were being implemented and that they would start appearing in that box. Despite years of discussion, when the time came to comply with the CMS request for reporting, doing so resulted in denied claims and a lack of payment.

Since CMS is focusing on reducing administrative burden, this seems a bit like an oxymoron. Complying with the mandate results in non-payment, and then requires substantial administrative time to educate the secondary payer and get the decision reversed. However, it is increasingly vital that we identify ourselves correctly to Medicare, because as the trend toward Value Based Payment accelerates, hyperbaric and wound care clinicians must carve ourselves out of the cost of care of our complex patients, and be seen as a cost-effective resource rather than as a drain on the system. No pain, no gain, and it is early days.

Helen B. Gelly is emeritus medical director of Hyperbaric Physicians of Georgia and chief executive officer of HyperbaRXs, Marietta, GA.


Helen Gelly, MD

1. Centers for Medicare and Medicaid Services. MACRA Patient Relationship Categories and Codes: Frequently Asked Questions (FAQ). Available at Published May 2018.

Back to Top