Modifier 74 is a facility-only CPT® modifier used by Hospital Outpatient Departments (HOPDs) and Ambulatory Surgical Centers (ASCs) to report a planned surgical or diagnostic procedure that is discontinued after anesthesia has been administered or after the procedure has already begun because of extenuating circumstances or circumstances that threaten the patient’s well-being.

Modifier 74 recognizes that significant facility resources have already been consumed, including operating room time, anesthesia services, equipment, supplies, and recovery resources. Unlike Modifier 73, which applies before anesthesia, Modifier 74 is reported when anesthesia has been induced or the procedure has already been initiated (for example, an incision has been made, intubation has begun, or an endoscope has been inserted). CMS limits Modifier 74 to facility claims submitted by HOPDs and ASCs.

Modifier Number

Modifier Name

Discontinued Outpatient Hospital/Ambulatory Surgery Center (ASC) Procedure After Administration of Anesthesia

Plain English Explanation

Modifier 74 tells the payer:

“The patient received anesthesia or the procedure had already started, but the procedure had to be discontinued because continuing would have endangered the patient’s health or due to other extenuating circumstances.”

Purpose of Modifier 74

Modifier 74 is used to:

Report outpatient procedures discontinued after anesthesia.
Report procedures discontinued after the procedure has already begun.
Recognize facility resources already consumed.
Support reimbursement under Medicare OPPS and ASC payment rules.
Differentiate procedures discontinued after anesthesia from those stopped before anesthesia (Modifier 73).

Understanding Modifier 74

CMS permits Modifier 74 when all of the following apply:

The procedure was scheduled.
The patient was prepared.
The patient entered the operating or procedure room.
Anesthesia was administered, or
The procedure had already started (for example, incision made, intubation begun, or scope inserted).
The procedure was discontinued because of extenuating circumstances or a threat to the patient’s well-being.

For HOPDs, anesthesia includes:

Local anesthesia
Regional block
Moderate (conscious) sedation
Deep sedation
General anesthesia

CMS also allows Modifier 74 when the physician discontinues, partially reduces, or cancels the planned procedure after anesthesia has been administered because continuing would not be in the patient’s best interest.

When to Use Modifier 74

Modifier 74 may be appropriate when:

General anesthesia has already been induced.
Moderate sedation has already been administered.
Local anesthesia has been administered (for HOPD billing).
The surgical incision has been made.
Intubation has started.
An endoscope has been inserted.
The physician discontinues the procedure because of unexpected patient instability.

Common Examples

✔ Colonoscopy discontinued after sedation because the patient develops severe hypoxia.

✔ Cataract surgery discontinued after local anesthesia due to ventricular tachycardia.

✔ Laparoscopic surgery discontinued after abdominal entry because of life-threatening hypotension.

✔ Arthroscopy stopped after the arthroscope is inserted because of equipment failure affecting patient safety.

When NOT to Use Modifier 74

Do not use Modifier 74 when:

The procedure is cancelled before anesthesia (Modifier 73 may apply).
The patient never enters the procedure room.
The cancellation is elective.
No anesthesia was planned.
Billing physician professional services (Modifier 53 may be appropriate).
The patient simply decides not to proceed before anesthesia.

Medicare Rules

CMS guidance provides the following rules:

Modifier 74 is reported only by HOPDs and ASCs.
It applies when anesthesia has been administered or the procedure has already begun.
The discontinuation must result from extenuating circumstances or circumstances threatening the patient’s well-being.
Physicians generally report Modifier 53—not Modifier 74—for professional claims involving discontinued procedures.
Unlike Modifier 73, eligible procedures billed with Modifier 74 are generally reimbursed at 100% of the applicable OPPS or ASC facility payment, subject to Medicare payment rules.

Commercial Insurance Rules

Commercial payer policies vary.

Many insurers:

Follow CMS guidance for Modifier 74.
Restrict Modifier 74 to facility billing.
Require operative reports and nursing documentation.
Require documentation explaining why the procedure was discontinued.
May use different reimbursement methodologies.

Always review payer-specific billing guidelines before claim submission.

Documentation Requirements

Documentation should clearly include:

Planned procedure.
Date of service.
Reason for discontinuation.
Time anesthesia was administered.
Type of anesthesia used.
Confirmation that the procedure had started or anesthesia had been induced.
Physician order to discontinue.
Operative report.
Nursing documentation.

Documentation must clearly demonstrate that patient safety required discontinuation.

Real Billing Examples

Example 1 – Colonoscopy

A patient undergoes conscious sedation for a planned colonoscopy. After the colonoscope is inserted, the patient develops severe oxygen desaturation.

The physician immediately terminates the procedure.

Modifier 74 is appropriate.

Example 2 – Cataract Surgery

Local anesthesia is administered, and surgery begins. During the procedure, the patient develops unstable cardiac arrhythmias.

The ophthalmologist discontinues the surgery.

Modifier 74 is appropriate.

Example 3 – Laparoscopic Cholecystectomy

General anesthesia is induced, and the first incision is made. Shortly afterward, the patient experiences severe hypotension that does not respond adequately to treatment.

The surgeon aborts the procedure.

Modifier 74 is appropriate.

Example 4 – Incorrect Use

A patient is scheduled for surgery but develops uncontrolled hypertension in the preoperative area before entering the operating room.

Modifier 74 should NOT be reported. Modifier 73 may be appropriate if CMS requirements are otherwise satisfied.

CMS-1500 / UB-04 Billing Example

Field	Example
Procedure Code	Planned CPT®/HCPCS procedure
Modifier	74
Diagnosis Pointer	Appropriate ICD-10-CM diagnosis
Units	1
Claim Type	Hospital Outpatient / ASC Facility Claim

Note: Modifier 74 is generally reported on facility (UB-04) claims rather than physician professional claims.

Common Denial Reasons

Procedure stopped before anesthesia (Modifier 73 should have been used).
Procedure cancelled before the patient entered the procedure room.
Elective cancellation.
Insufficient documentation.
Modifier billed on physician professional claim.
No evidence that anesthesia was administered or the procedure had begun.

How to Correct the Denial

Review the EOB or ERA.
Verify anesthesia had been administered or the procedure had begun.
Confirm the discontinuation resulted from extenuating circumstances.
Submit operative reports and anesthesia documentation.
Include nursing records when requested.
Appeal with complete supporting documentation if appropriate.

Coding Tips

Modifier 74 is a facility modifier only.
Verify anesthesia was administered or the procedure had started.
Do not confuse Modifier 74 with Modifier 53.
Do not use Modifier 74 for elective cancellations.
Review payer-specific OPPS and ASC billing rules.

Modifier 74 vs Modifier 73 vs Modifier 53

Modifier	Purpose
73	Facility procedure discontinued before anesthesia.
74	Facility procedure discontinued after anesthesia or after the procedure has begun.
53	Physician discontinued procedure due to patient safety or extenuating circumstances.

Modifier 74 vs Modifier 52

Modifier	Purpose
74	Procedure discontinued after anesthesia because of extenuating circumstances.
52	Reduced services because the procedure was intentionally reduced or partially completed, not necessarily because of patient safety.

Frequently Asked Questions (FAQs)

Q1. What is Modifier 74?

Answer: Modifier 74 is used by HOPDs and ASCs to report a procedure discontinued after anesthesia has been administered or after the procedure has begun because of extenuating circumstances or concerns for patient safety.

Q2. Who reports Modifier 74?

Answer: Modifier 74 is reported by hospital outpatient departments and ambulatory surgery centers. Physicians generally report Modifier 53 instead.

Q3. What qualifies as “procedure started”?

Answer: CMS examples include an incision being made, intubation beginning, or a scope being inserted.

Q4. How does Medicare reimburse Modifier 74?

Answer: Eligible Modifier 74 procedures are generally reimbursed at 100% of the applicable OPPS or ASC payment amount, unlike Modifier 73, which is generally paid at 50%, subject to Medicare payment rules.

AR Caller Tips

When following up on a denied Modifier 74 claim:

Confirm the claim is from an ASC or HOPD.
Verify anesthesia was administered or the procedure had begun.
Request review of anesthesia and operative records.
Confirm the discontinuation resulted from patient safety concerns.
Document the payer representative’s name, reference number, and follow-up instructions.

Interview Questions

Question 1

What is Modifier 74?

Answer: A facility modifier used to report outpatient or ASC procedures discontinued after anesthesia has been administered or after the procedure has begun.

Question 2

What is the difference between Modifier 73 and Modifier 74?

Answer: Modifier 73 is reported before anesthesia, while Modifier 74 is reported after anesthesia has been administered or after the procedure has started.

Question 3

Can physicians report Modifier 74?

Answer: No. Modifier 74 is intended for HOPD and ASC facility billing. Physicians generally use Modifier 53 for discontinued procedures.

Practice Scenario

Scenario

A patient arrives at an ambulatory surgery center for a scheduled arthroscopic knee procedure. General anesthesia is induced, the arthroscope is inserted, and the procedure begins. Shortly afterward, the patient develops severe bronchospasm and unstable oxygen saturation. The surgeon determines it is unsafe to continue and terminates the procedure.

Question

Should Modifier 74 be reported?

Answer

Yes. Because anesthesia had been administered, the procedure had already begun, and the discontinuation occurred due to circumstances threatening the patient’s well-being, Modifier 74 is appropriate for the facility claim.

Related Modifiers

Modifier 53 – Discontinued Procedure
Modifier 52 – Reduced Services
Modifier 73 – Discontinued Procedure Prior to Administration of Anesthesia
Modifier 22 – Increased Procedural Services

Common Billing Mistakes

Reporting Modifier 74 before anesthesia is administered.
Using Modifier 74 on physician professional claims.
Reporting elective cancellations.
Failing to document anesthesia or procedure initiation.
Confusing Modifier 74 with Modifier 53.

Key Takeaways

Modifier 74 is a facility-only modifier used by HOPDs and ASCs.
It applies when anesthesia has been administered or the procedure has already started.
It is reported only when the procedure is discontinued because of extenuating circumstances or threats to the patient’s well-being.
Physicians generally use Modifier 53 instead of Modifier 74.
Eligible Medicare facility claims are generally reimbursed at the full applicable payment amount, subject to Medicare rules.

References

CMS Medicare Claims Processing Manual, Chapter 4, Section 20.6.4 – Modifiers 73 and 74.
CMS Medicare Claims Processing Manual – Historical Payment Guidance.
Noridian Medicare – Modifier 74 Guidance (updated May 2025).
AMA CPT® Professional Edition (licensed codebook).

Conclusion

Modifier 74 is an important facility modifier that recognizes the significant resources consumed when an outpatient hospital or ASC procedure must be discontinued after anesthesia has been administered or after the procedure has begun because of extenuating circumstances or patient safety concerns. Proper use requires complete documentation, confirmation that anesthesia or procedural initiation occurred, and adherence to CMS and payer-specific billing requirements. Correct reporting helps reduce denials, supports compliant billing, and ensures appropriate facility reimbursement.

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 billing resources, and general medical billing principles. It is not an official publication of the American Medical Association (AMA), CMS, or any insurance payer. CPT® is a registered trademark of the American Medical Association. Always consult the latest AMA CPT® codebook, CMS manuals, Medicare Administrative Contractor (MAC) guidance, National Correct Coding Initiative (NCCI) policies, and payer-specific billing policies before coding, billing, or submitting claims.