Modifier GZ is a Medicare HCPCS Level II modifier that indicates an item or service is expected to be denied as not reasonable and necessary, and no valid Advance Beneficiary Notice (ABN) was obtained before the item or service was furnished.

Unlike Modifier GA, which tells Medicare that a valid ABN is on file, Modifier GZ informs Medicare that the supplier expects the claim to be denied for medical necessity and cannot shift financial liability to the beneficiary because a valid ABN was not obtained.

For Durable Medical Equipment (DME) suppliers, correct use of Modifier GZ is important because it affects who is financially responsible when Medicare denies the claim.

Modifier

Modifier Name

Item or Service Expected to Be Denied as Not Reasonable and Necessary, No Advance Beneficiary Notice (ABN) on File

Plain English Explanation

Modifier GZ tells Medicare:

“This item or service is expected to be denied because it is not considered reasonable and necessary, and the supplier did not obtain a valid Advance Beneficiary Notice (ABN) before providing it.”

In most situations, if Medicare denies the claim on this basis, the supplier—not the beneficiary—is financially liable because the required ABN was not obtained.

Purpose of Modifier GZ

Modifier GZ is used to:

Notify Medicare that the supplier expects a denial based on medical necessity.
Indicate that no valid ABN is on file.
Allow Medicare to process the claim appropriately.
Identify supplier liability when Medicare denies the claim.
Support accurate Medicare claims processing.

Understanding Modifier GZ

Modifier GZ applies to covered benefit categories when:

The item or service may not meet Medicare’s reasonable and necessary standard under §1862(a)(1)(A) of the Social Security Act.
A valid ABN was not issued before the item or service was furnished.

It is not used for:

Statutorily excluded items (use GY, and GX if a voluntary notice was issued).
Covered items that meet Medicare requirements (no GZ).
Situations where a valid ABN exists (use GA instead).

When to Use Modifier GZ

Use Modifier GZ when:

Medicare is expected to deny the claim because the item or service is not reasonable and necessary.
The supplier did not obtain a valid ABN before providing the item or service.
The claim is still submitted to Medicare.

Examples include:

DME furnished without meeting LCD medical necessity requirements.
Equipment provided before qualifying clinical criteria are met.
Supplies exceeding Medicare utilization limits when no ABN was obtained.
Services lacking sufficient documentation to support medical necessity.

When NOT to Use Modifier GZ

Do not use Modifier GZ when:

A valid ABN is on file (use GA).
The item is statutorily excluded from Medicare coverage (use GY, with GX if a voluntary notice was issued).
Medicare coverage criteria have been met (consider KX, if required by policy).
The claim is not expected to be denied for medical necessity.

Medicare Rules

Under Medicare:

Modifier GZ indicates that no valid ABN was obtained.
Medicare generally denies the claim if it determines the item or service is not reasonable and necessary.
In most cases, financial liability remains with the supplier because the beneficiary was not properly notified before the item or service was furnished.
Suppliers should not use GZ as a substitute for obtaining a valid ABN when one is required.
Medicare systems may automatically deny claims submitted with Modifier GZ when medical necessity is not established.

Commercial Insurance Rules

Modifier GZ is primarily a Medicare modifier.

Commercial insurers may:

Ignore the modifier.
Have different waiver-of-liability requirements.
Require prior authorization rather than an ABN.
Use payer-specific financial responsibility forms.

Always verify payer-specific billing policies.

Documentation Requirements

Documentation should include:

Physician order.
Medical records supporting (or failing to support) medical necessity.
HCPCS code.
Modifier GZ.
Internal documentation showing that no valid ABN was obtained.
Proof of delivery, if applicable.
Supplier records.
Any correspondence related to the claim.

Real Billing Examples

Example 1 – CPAP Device Without Qualifying Sleep Study

A supplier furnishes a CPAP device before the beneficiary completes a qualifying sleep study. No ABN is obtained.

Billing

HCPCS E0601
Modifiers RR GZ

If Medicare denies the claim for lack of medical necessity, the supplier generally bears financial responsibility.

Example 2 – Wheelchair Without Supporting Documentation

A wheelchair is delivered before the physician completes the required documentation. No ABN is signed.

Billing

Appropriate HCPCS code
Modifier GZ

Example 3 – Oxygen Equipment Without Meeting Coverage Criteria

Oxygen equipment is provided, but the qualifying test results do not meet Medicare’s coverage requirements. No ABN was obtained.

Billing

Appropriate HCPCS code
Modifier GZ

Example 4 – Excess Replacement Supplies

Replacement supplies are dispensed earlier than Medicare allows, and the supplier fails to obtain an ABN before dispensing them.

Billing

Appropriate HCPCS code
Modifier GZ

Example 5 – Incorrect Use

A supplier has a properly completed ABN signed before furnishing the equipment but bills:

HCPCS code
Modifier GZ

This is incorrect. When a valid ABN is on file, Modifier GA should be reported instead.

CMS-1500 Claim Example

Field	Example
HCPCS	E0601
Modifier 1	RR
Modifier 2	GZ
Diagnosis Pointer	Appropriate ICD-10-CM diagnosis
Units	1

Common Denial Reasons

Medical necessity requirements not met.
Missing physician documentation.
No qualifying clinical documentation.
Incorrect use of GZ instead of GA.
Invalid modifier combination.
LCD criteria not satisfied.
Insufficient supporting documentation.

How to Correct the Denial

Determine whether a valid ABN should have been obtained.
Review the applicable LCD or NCD.
Obtain missing documentation if possible.
Correct the modifier if an ABN actually exists.
Submit a corrected claim or appeal if additional medical necessity documentation is available.
Educate staff to obtain ABNs prospectively when required.

Coding Tips

Never use GZ when a valid ABN exists.
Obtain the ABN before furnishing the item whenever Medicare rules require it.
Distinguish medical necessity denials (GA/GZ) from statutory exclusions (GY).
Review LCD requirements before billing.
Maintain complete documentation supporting claim decisions.

Modifier GZ vs Modifier GA

Modifier	Description
GZ	No valid ABN on file; denial expected for medical necessity
GA	Valid ABN obtained before the item or service was furnished

Modifier GZ vs Modifier GY

Modifier	Description
GZ	Covered benefit expected to be denied for lack of medical necessity
GY	Item or service is statutorily excluded or not a Medicare benefit

Modifier GZ vs Modifier GX

Modifier	Description
GZ	No required ABN obtained
GX	Voluntary Notice of Liability issued for a non-covered item or service

Modifier GZ vs Modifier KX

Modifier	Description
GZ	Medical necessity requirements are not expected to be met
KX	Documentation confirms all Medicare coverage requirements have been met

Frequently Asked Questions (FAQs)

Q1. What does Modifier GZ mean?

Answer: It indicates that Medicare is expected to deny the claim as not reasonable and necessary, and no valid ABN was obtained before the item or service was furnished.

Q2. Who is usually financially responsible when GZ is used?

Answer: If Medicare denies the claim for medical necessity, the supplier is generally financially responsible because a required ABN was not obtained.

Q3. Can GZ be used with GA?

Answer: No. GA and GZ represent opposite situations. GA means a valid ABN exists; GZ means it does not.

Q4. Is GZ used for statutorily excluded services?

Answer: No. Statutorily excluded items generally require Modifier GY, and GX may also be reported if a voluntary notice was issued.

Q5. Does Modifier GZ guarantee a denial?

Answer: No. It indicates that the supplier expects a denial based on medical necessity. Medicare makes the final coverage determination.

AR Caller Tips

When working claims billed with Modifier GZ:

Verify whether an ABN should have been obtained.
Review LCD and NCD medical necessity requirements.
Determine whether additional clinical documentation is available.
Confirm whether the denial is due to medical necessity rather than a statutory exclusion.
Document payer conversations, reference numbers, and appeal guidance.
Educate front-end staff to obtain ABNs before furnishing potentially non-covered services.

Interview Questions

Question 1

What does Modifier GZ indicate?

Answer: A claim is expected to be denied as not reasonable and necessary, and no valid ABN was obtained.

Question 2

What is the difference between GA and GZ?

Answer: GA indicates a valid ABN is on file; GZ indicates no valid ABN was obtained.

Question 3

Who is generally financially responsible when GZ is used and Medicare denies the claim?

Answer: The supplier is generally financially responsible because the beneficiary was not properly notified with an ABN.

Question 4

Can GZ be used for statutorily excluded services?

Answer: No. Statutorily excluded services generally require Modifier GY.

Practice Scenario

Scenario

A supplier provides a Medicare-covered wheelchair before the required physician documentation is completed. No Advance Beneficiary Notice (ABN) is obtained. The supplier expects Medicare to deny the claim because the medical necessity requirements are not met.

Question

Which modifier should be reported?

Answer

Report the appropriate HCPCS code with Modifier GZ, indicating that the claim is expected to be denied as not reasonable and necessary and that no valid ABN was obtained before the equipment was furnished.

Related DME Modifiers

GA – Waiver of Liability Statement Issued as Required by Payer Policy
GX – Notice of Liability Issued, Voluntary Under Payer Policy
GY – Item or Service Statutorily Excluded or Does Not Meet the Definition of a Medicare Benefit
KX – Requirements Specified in the Medical Policy Have Been Met
RR – Rental Durable Medical Equipment
NU – New Durable Medical Equipment Purchase
UE – Used Durable Medical Equipment Purchase

Common Billing Mistakes

Using GZ when a valid ABN exists.
Confusing medical necessity denials with statutory exclusions.
Failing to obtain an ABN before providing a potentially non-covered covered service.
Using GZ as a routine modifier.
Inadequate documentation of medical necessity.
Incorrect modifier combinations.

Key Takeaways

Modifier GZ indicates that a covered item or service is expected to be denied as not reasonable and necessary, and no valid ABN was obtained.
Unlike GA, GZ generally leaves the supplier financially liable if Medicare denies the claim.
GZ should not be used for statutory exclusions; those situations generally require Modifier GY.
Proper ABN procedures are essential to reduce financial risk and maintain Medicare compliance.
Understanding the distinctions among GA, GX, GY, and GZ is critical for accurate DME billing.

References

CMS Medicare Claims Processing Manual, Chapter 30 – Financial Liability Protections.
CMS Advance Beneficiary Notice of Noncoverage (ABN) Instructions (Form CMS-R-131).
CMS Medicare Benefit Policy Manual.
HCPCS Level II Code Book.
DME Medicare Administrative Contractor (DME MAC) Supplier Manuals.

Conclusion

Modifier GZ is an important Medicare financial liability modifier used when a covered item or service is expected to be denied because it is not reasonable and necessary, and no valid Advance Beneficiary Notice (ABN) was obtained before furnishing the item or service. Proper use of Modifier GZ helps Medicare identify supplier liability, supports compliant claims processing, and reinforces the importance of obtaining ABNs whenever Medicare policy requires them.

Educational Disclaimer

This article was prepared with the assistance of artificial intelligence (AI) for educational and informational purposes. It is based on publicly available CMS guidance, Medicare financial liability regulations, DMEPOS billing principles, and general medical coding practices. It is not an official publication of CMS or the American Medical Association (AMA). Always consult the latest CMS Medicare Claims Processing Manual, the official CMS ABN instructions (Form CMS-R-131), the HCPCS Level II Code Book, DME Medicare Administrative Contractor (DME MAC) guidance, applicable LCDs/NCDs, and payer-specific billing policies before coding, billing, or submitting claims.