Modifier GY- Statutorily Excluded Service

Identifies an item or service that Medicare excludes by statute or that does not meet the definition of a Medicare benefit, allowing the claim to receive an appropriate noncoverage determination.

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What Is Modifier GY?

Modifier GY is a HCPCS Level II modifier used to identify an item or service that is statutorily excluded from Medicare coverage or does not meet the definition of a Medicare benefit.

CMS's current ABN guidance instructs providers to report GY when Medicare statutorily excludes the item or service or when the item or service does not qualify as a Medicare benefit. GY may be reported by itself or, when a voluntary notice of liability is issued, together with Modifier GX.

GY is different from a service that Medicare could cover but denies because it is not reasonable and necessary. That distinction is important because medical-necessity denials involve different liability modifiers, such as GA or GZ.

Modifier GY essentially tells Medicare: this service falls outside Medicare's covered benefit structure rather than failing medical necessity requirements for an otherwise covered benefit.

When to Use Modifier GY

Statutorily Excluded Service: Medicare law specifically excludes the item or service from coverage.

No Medicare Benefit Category: The service does not meet the definition of any Medicare benefit.

Formal Medicare Denial Needed: A provider or beneficiary needs Medicare to process the claim and issue a denial for an excluded service.

Secondary Insurance Coordination: A Medicare denial may be necessary before another insurer can consider the service, subject to that payer's requirements.

Voluntary Notice Issued: GY may be reported with GX when a voluntary notice of liability was provided for the excluded or non-benefit service.

When NOT to Use Modifier GY

Service May Be Covered but Is Not Medically Necessary: GY is not the appropriate modifier merely because Medicare is expected to deny an otherwise covered service for medical necessity.

Mandatory ABN Issued: GA generally applies when a mandatory ABN was required and properly issued for an applicable service.

No ABN for Expected Medical-Necessity Denial: GZ identifies an item or service expected to be denied as not reasonable and necessary when an ABN was not issued.

Trying to Force a Denial: Do not append GY simply because the provider wants Medicare to deny a claim. The service must actually satisfy the statutory-exclusion or non-benefit criteria.

Ordinarily Covered Medicare Benefit: GY should not be used when the service falls within a Medicare benefit category and the actual coverage issue involves another Medicare requirement.

Billing Example

A beneficiary receives a service that does not qualify as a Medicare benefit.

The provider determines that the service is statutorily excluded rather than potentially covered but failing medical-necessity requirements.

The provider reports the appropriate CPT or HCPCS code with Modifier GY.

Medicare processes the service as noncovered and issues the applicable denial. Current CMS billing articles state that services reported with GY as statutorily noncovered or without a benefit category automatically deny.

Documentation Requirements

Service Provided: Clearly document the item or service furnished to the beneficiary.

Reason for Exclusion: The record should support why the service is statutorily excluded or does not fall within a Medicare benefit category.

Correct Procedure Code: Report the appropriate CPT or HCPCS code representing the item or service.

Supporting Records: Maintain documentation sufficient to demonstrate why GY applies if the claim is reviewed.

Voluntary Notice: If GX is also reported, retain documentation supporting the voluntary notice of liability provided to the beneficiary.

Consistent Claim Information: The procedure, diagnosis, documentation, and modifier should accurately reflect the service and its noncovered status.

Billing and Claim Considerations

Modifier GY communicates a statutory or benefit-category exclusion, not a failure to meet medical necessity.

That distinction affects both claim processing and beneficiary liability.

CMS states that an ABN is not required for statutorily excluded services. A provider may voluntarily issue a notice, in which case GX may be reported along with GY.

Current Medicare coverage articles also state that services submitted with GY automatically deny when the service is statutorily noncovered or lacks a Medicare benefit category.

Providers should therefore determine the actual reason Medicare does not cover the service before selecting GY. A service excluded by statute and a potentially covered service that fails medical necessity are not the same billing situation.

Does Modifier GY Require an ABN?

Generally, no mandatory ABN is required for a statutorily excluded service.

The mandatory ABN process primarily applies when Medicare normally could cover an item or service but payment is expected to be denied under circumstances requiring advance notice.

CMS specifically states that an ABN is not required for statutorily excluded services. A voluntary notice may still be provided, and GX is the modifier used to identify that voluntary notice.

This creates an important distinction:

GY alone: Statutorily excluded or non-Medicare-benefit service.

GX + GY: Statutorily excluded or non-benefit service for which a voluntary notice of liability was issued.

Modifier GY and Beneficiary Liability

GY is also important because statutory exclusions are handled differently from medical-necessity denials.

Current CMS billing guidance states that when a service is statutorily noncovered or lacks a benefit category, it should be submitted with GY; an ABN is not required for these denials, and the limitation-of-liability provisions described for medical-necessity situations do not apply in the same manner.

Providers should still follow applicable Medicare billing, notice, assignment, and beneficiary communication requirements. GY itself should not be viewed as a substitute for correctly determining financial responsibility.

Modifier GY vs. Modifier GX

Modifier GY: Identifies a service that is statutorily excluded or does not meet the definition of a Medicare benefit.

Modifier GX: Indicates that a voluntary notice of liability was issued for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit.

CMS permits GX and GY to be reported together when appropriate.

The key distinction is that GY describes the coverage status, while GX describes the voluntary notice.

Modifier GY vs. Modifier GZ

Modifier GY: The service is statutorily excluded or is not a Medicare benefit.

Modifier GZ: The service could fall within a Medicare benefit but is expected to be denied as not reasonable and necessary, and no ABN was issued.

CMS's current ABN guidance maintains this distinction between GY and GZ.

Using GY instead of GZ simply because a denial is expected can misrepresent the actual reason for noncoverage.

Common Billing Mistakes

Confusing Noncoverage With Medical Necessity: Not every Medicare denial supports GY. The service must be statutorily excluded or outside a Medicare benefit category.

Using GY Instead of GZ: GZ is used for an expected reasonable-and-necessary denial when an ABN was not issued.

Using GY Instead of GA: GA represents a different circumstance in which a mandatory ABN was issued as required.

Assuming an ABN Is Mandatory: CMS does not require an ABN for statutorily excluded services.

Forgetting GX When Applicable: When a voluntary notice of liability is issued, GX may be reported with GY under CMS guidance.

Unsupported Statutory Exclusion: The record does not establish why the service falls outside Medicare coverage.

Common Denial Reasons

Statutory Exclusion: The service is expressly excluded from Medicare coverage.

No Medicare Benefit Category: The item or service does not qualify as a Medicare benefit.

GY-Designated Noncovered Service: Medicare processes the service as noncovered based on its statutory or benefit status.

Incorrect Modifier Selection: The actual circumstances support GA, GX, or GZ rather than GY.

Claim Information Conflict: The procedure, modifier, or supporting documentation does not consistently describe the noncovered service.

Insufficient Documentation: The record does not adequately support the service or circumstances represented on the claim.

Frequently Asked Questions

Does Modifier GY require an Advance Beneficiary Notice?
No mandatory ABN is required merely because a service is statutorily excluded or does not qualify as a Medicare benefit. CMS allows a voluntary notice, however, and GX may be reported with GY when such a notice is issued.

Will Medicare pay a claim reported with Modifier GY?
GY identifies a service as statutorily excluded or outside the Medicare benefit structure. Current CMS billing guidance states that services reported as statutorily noncovered with GY automatically deny.