Medicare • Non-Covered Services • Modifier Guide

Modifier GY

Statutorily Excluded or Not a Medicare Benefit

Learn what Modifier GY means, when it should be reported, how statutorily excluded services differ from services denied for medical necessity, how GY works with GX, GA and GZ, and how an AR caller should handle GY-related denials.

Start Learning Quick Cheat Sheet

Statutorily Excluded or Does Not Meet the Definition of Any Medicare Benefit

Modifier GY at a Glance

The essential points every biller, coder and AR caller should know.

Non-Covered Service

GY identifies an item or service that Medicare statutorily excludes or that does not meet the definition of a Medicare benefit.

LAW

Statutory Exclusion

The non-coverage is based on Medicare statute or the service does not fall within a Medicare benefit category.

DENY

Automatic Denial

CMS guidance identifies GY lines as non-covered and subject to denial.

ABN

ABN Difference

A statutory exclusion is different from a service expected to be denied as not reasonable and necessary.

What Is Modifier GY?

A simple explanation of GY for medical billing and RCM professionals.

Simple Definition

Modifier GY identifies:

An item or service that is statutorily excluded or does not meet the definition of any Medicare benefit.

In practical billing terms, GY tells Medicare that the provider is submitting a service as non-covered because Medicare statute excludes the service or the service is outside the Medicare benefit category.

CMS’s Medicare Claims Processing Manual states that GY is used for items or services that are statutorily excluded or do not meet the definition of a Medicare benefit.

Easy Way to Remember

Think:

“GY = Medicare says this is not a benefit.”

GY is not simply another way of saying “not medically necessary.” That distinction is extremely important when working Medicare denials.

GY → statutory exclusion / no Medicare benefit

GZ → expected denial because not reasonable and necessary

Two Core Situations for Modifier GY

Understand the two concepts behind the CMS definition.

Statutorily Excluded

Medicare law specifically excludes the item or service from Medicare coverage.

Key idea:

The exclusion is based on statute rather than simply a determination that the particular patient’s service was not medically necessary.

Not a Medicare Benefit

The item or service does not meet the definition of a Medicare benefit.

Key idea:

The service is outside the Medicare benefit structure rather than merely being inappropriate or medically unnecessary for the particular patient.

GY vs GZ — Critical Difference

This is one of the most important concepts for Medicare AR callers.

Modifier	General Meaning	Why Medicare Does Not Pay	ABN Concept
GY	Statutorily excluded or does not meet the definition of a Medicare benefit	Medicare benefit category/statutory exclusion	ABN generally is not required solely because the service is statutorily excluded
GZ	Item/service expected to be denied as not reasonable and necessary	Medical necessity / reasonable-and-necessary requirement	GZ is used when the provider expects denial and did not obtain an ABN
GA	Waiver of liability statement issued as required by payer policy	Expected denial under applicable policy	Mandatory ABN issued and retained when required
GX	Notice of liability issued voluntarily	Service is expected to be non-covered for reasons such as statutory exclusion	Voluntary notice; CMS says GX may be used with GY

AR Tip

Never change GY to GZ just because both ultimately produce a non-payment. First determine why Medicare is not covering the service. If the service is statutorily excluded or does not meet the Medicare benefit definition, GY is the relevant modifier. If the service is a Medicare benefit but is expected to be denied because it is not reasonable and necessary, GZ may apply.

Modifier GY vs Other Related Modifiers

Understand the purpose of each modifier before correcting a claim.

Modifier GY

Statutorily excluded or does not meet the definition of a Medicare benefit.

Modifier GZ

Expected to be denied as not reasonable and necessary when no ABN was obtained.

Modifier GA

Indicates a waiver of liability statement/ABN is on file when required by payer policy.

Modifier GX

Indicates a voluntary notice of liability was issued for a non-covered service.

Modifier GK

Identifies a reasonable and necessary item/service associated with a GA or GZ modifier in applicable circumstances.

Modifier 59

Identifies a distinct procedural service. It has a completely different purpose from GY.

When Is Modifier GY Used?

GY should be used when the service falls into the Medicare non-benefit category described by CMS.

Statutory Exclusion

Medicare statute specifically excludes the item or service.

No Medicare Benefit

The item or service does not meet the definition of a Medicare benefit.

Non-Covered Billing

The provider needs to submit the claim line as non-covered to Medicare.

Specific CMS Guidance

CMS or applicable Medicare guidance identifies the service as statutorily non-covered or outside the Medicare benefit.

Payer Requirement

The applicable Medicare contractor or payer requires GY for the specific non-covered service.

Non-Medicare Benefit

The service is outside the Medicare benefit category rather than simply failing medical-necessity criteria.

Modifier GY Billing Workflow

A simple workflow for identifying and submitting a statutorily non-covered service.

1 Identify the item or service being billed.

2 Determine whether Medicare covers the service as a benefit.

3 Determine whether the non-coverage is statutory or based on medical necessity.

4 If the service is statutorily excluded or outside the Medicare benefit, verify GY requirements.

5 Verify the appropriate CPT/HCPCS code.

6 Determine whether another modifier such as GX is also appropriate.

7 Submit the claim according to Medicare billing instructions.

8 Expect the GY line to process as non-covered when applicable.

Modifier GY Practical Examples

Real-world style examples for billing and AR training.

Example 1 — Statutorily Non-Covered Service

A provider performs a service that Medicare statute excludes from coverage.

The appropriate service code may be reported with GY when applicable Medicare billing instructions require it.

Example 2 — Not a Medicare Benefit

The service does not meet the definition of a Medicare benefit.

GY identifies the line as statutorily non-covered or outside the Medicare benefit.

Example 3 — Medical Necessity Issue

Medicare covers the type of service, but the particular service is expected to be denied because it is not reasonable and necessary.

Do not automatically use GY. The reason for non-payment is different.

Example 4 — ABN and Medical Necessity

A Medicare-covered service is expected to be denied as not reasonable and necessary and the required ABN was issued.

GA addresses the applicable waiver-of-liability/ABN situation, not a statutory exclusion.

Example 5 — Voluntary Notice

A provider gives a voluntary notice of liability for a service that is statutorily excluded.

GX + GY

CMS allows GX to be used with GY for applicable voluntary notice situations.

Example 6 — Incorrect GY Usage

A biller uses GY simply because the claim was denied for lack of medical necessity.

REVIEW

Determine the actual denial basis before changing the modifier.

Example 7 — Payer Requests Documentation

The claim contains GY and the payer requests supporting information about the service.

POLICY

Verify the applicable Medicare contractor instructions and respond according to the payer’s request.

Example 8 — AR Denial

The GY claim processes to a non-covered denial.

DENIED

Review whether the denial is expected based on the statutory exclusion and whether secondary insurance or patient liability rules apply.

Common Modifier GY Denials & Issues

Common problems AR callers may encounter when working GY claims.

Issue 01

Service Is Non-Covered

Medicare processes the line as non-covered because it is statutorily excluded or outside the Medicare benefit.

Issue 02

Incorrect Modifier

The payer indicates that GY does not match the actual reason for the denial.

Issue 03

Medical Necessity Confusion

The service may be a Medicare benefit but was denied because it was not reasonable and necessary.

Issue 04

GY vs GZ

The claim was coded with GY even though the actual issue was medical necessity.

Issue 05

GY vs GA

The service is being treated as a medical-necessity denial with an ABN rather than a statutory exclusion.

Issue 06

GX Relationship

A voluntary notice was issued and the billing team needs to determine whether GX should accompany GY.

Issue 07

Secondary Insurance

Medicare may deny a statutory non-covered service, but the secondary payer’s contract and benefit rules still need review.

Issue 08

Patient Liability

Do not automatically transfer a denied balance to the patient without reviewing the applicable liability rules and payer requirements.

Issue 09

Incorrect CPT/HCPCS

The underlying service code may not correctly describe the service performed.

Issue 10

Payer Policy Conflict

The Medicare contractor’s current billing instructions may differ from assumptions made by the billing team.

Issue 11

Incorrect Secondary Billing

Secondary billing may require review after Medicare processes a statutorily non-covered service.

Issue 12

Incorrect AR Action

An expected statutory denial may be incorrectly treated as a recoverable denial without first reviewing the coverage basis.

Modifier GY Denial Resolution Workflow

Follow this process before rebilling or appealing.

1 Review the ERA/EOB and identify the exact denial reason.

2 Capture the CARC and RARC codes.

3 Confirm whether GY was submitted.

4 Identify the reason Medicare did not pay.

5 Determine whether the issue is statutory exclusion or medical necessity.

6 Verify the applicable CMS or MAC policy.

7 Review the CPT/HCPCS code.

8 Verify whether GY is appropriate.

9 Determine whether GX, GA or GZ is relevant.

10 Review secondary insurance and applicable patient liability rules.

11 Determine whether correction or appeal is actually appropriate.

12 Document the final AR action.

AR Caller Script for Modifier GY

Practical payer questions when researching a GY denial.

“I’m calling regarding a Medicare claim that was submitted with Modifier GY.”

“Could you please provide the exact denial reason for the claim line?”

“Can you provide the applicable CARC and RARC codes?”

“Is the service being denied because it is statutorily excluded from Medicare coverage?”

“Or is the denial related to medical necessity or reasonable and necessary requirements?”

“Can you confirm whether Modifier GY is appropriate for this specific CPT/HCPCS code?”

“Does your policy require any additional modifier with GY?”

“Would GX be applicable if a voluntary notice of liability was issued?”

“Is there any correction required on the claim?”

“If the service is statutorily excluded, is the denial considered final based on Medicare coverage rules?”

“If there is a secondary payer, can you confirm how the Medicare non-covered line should be reported?”

“May I have the call reference number and your name or representative ID for our records?”

Modifier GY and Modifier GX

Understand how the two modifiers can work together.

GY

Identifies the item or service as statutorily excluded or as not meeting the definition of a Medicare benefit.

CMS describes GY as the modifier used to report the non-covered nature of the service.

GX

Indicates that a voluntary notice of liability was issued.

CMS states that GX may be used with GY when a voluntary notice is issued for a service that is not covered because of a statutory exclusion or because it is not a Medicare benefit.

Important

GY and GX are not interchangeable. GY describes the non-covered service. GX addresses the voluntary liability notice.

Modifier GY and ABN — What AR Callers Should Know

Do not confuse statutory non-coverage with medical-necessity non-coverage.

Statutorily Excluded

Medicare does not cover the service because it is statutorily excluded or outside the Medicare benefit.

GY may be applicable.
CMS says an ABN is generally not required solely for a statutory exclusion.
The line is processed as non-covered.

Not Reasonable & Necessary

Medicare covers the service category, but the particular service is expected to be denied because it is not reasonable and necessary.

GZ may apply when no ABN was obtained.
GA may apply when the required ABN was issued.
This is different from statutory exclusion.

Modifier GY Documentation Checklist

Documents and information to review during an AR investigation.

Medical Record

Review the documentation supporting what service was actually performed.

CPT/HCPCS

Confirm that the billed code accurately represents the service.

Medicare Policy

Verify the applicable CMS, MAC or Medicare coverage guidance.

GY Modifier

Confirm that GY matches the actual Medicare non-coverage reason.

ABN Status

Determine whether an ABN was issued and whether it was required for the specific situation.

GX Status

Determine whether a voluntary notice of liability was issued.

Secondary Payer

Review secondary coverage and its contract rules after Medicare processes the claim.

Patient Liability

Review applicable Medicare and payer liability rules before transferring a balance.

AR Notes

Document the denial reason, payer response, reference number and next action.

Common Modifier GY Billing Mistakes

Avoid these common errors in Medicare billing and AR.

Mistake 01

Using GY for Medical Necessity

A medical-necessity denial does not automatically mean the service is statutorily excluded.

Mistake 02

Confusing GY and GZ

The reason for Medicare’s non-payment must be identified before selecting the modifier.

Mistake 03

Assuming GY Means No Patient Liability

Patient liability must be reviewed under the applicable coverage, notice and payer rules.

Mistake 04

Automatically Using GA

GA addresses an applicable ABN/waiver-of-liability situation and should not be used simply because a service is non-covered.

Mistake 05

Ignoring GX

If a voluntary notice was issued, verify whether GX should be reported with GY.

Mistake 06

Not Checking Medicare Policy

Always verify the current CMS/MAC requirements for the service.

Mistake 07

Automatically Appealing

A statutory non-covered service may have no payment pathway under Medicare, so determine whether an appeal can actually change the coverage outcome.

Mistake 08

Ignoring Secondary Coverage

Medicare’s denial does not automatically determine the secondary payer’s coverage.

Mistake 09

Poor AR Documentation

Missing payer reference numbers and denial details can lead to repeated work and incorrect follow-up.

Modifier GY Decision Tree

Ask these questions before taking action on a GY claim.

1 Is the service outside the Medicare benefit category?

2 Is the service specifically excluded by Medicare statute?

3 If yes, verify the applicable GY billing requirement.

4 If no, is Medicare covering the service category but denying it because it is not reasonable and necessary?

5 If medical necessity is the issue, evaluate GZ or GA requirements instead of automatically using GY.

6 Was a voluntary notice of liability issued?

7 If applicable, determine whether GX should accompany GY.

8 Verify the current CMS/MAC policy before billing or correcting.

Modifier GY Claim Audit Checklist

Use this checklist during pre-bill and denial review.

Claim-Level Review

Patient information.
Date of service.
CPT/HCPCS code.
Units.
Modifier GY.
Other modifiers.
Place of service.
Diagnosis codes.
Billing provider.
Rendering provider.

      
        Coverage Review
      
          Is the service a Medicare benefit?
        
          Is it statutorily excluded?
        
          Does it fail the Medicare benefit definition?
        
          Is the issue actually medical necessity?
        
          Should GY be used?
        
          Should GZ be considered?
        
          Was an ABN issued?
        
          Should GA be considered?
        
          Was a voluntary notice issued?
        
          Should GX accompany GY?

      
        Modifier GY Quick Cheat Sheet
      
        GY = item/service statutorily excluded or does not meet the
        definition of a Medicare benefit.
      
        GY identifies the service as non-covered by Medicare.
      
        GY is different from GZ.
      
        GZ = expected denial because the service is not reasonable and
        necessary.
      
        GA relates to an applicable ABN/waiver-of-liability situation.
      
        GX identifies a voluntary notice of liability.
      
        CMS permits GX to be used with GY in applicable situations.
      
        GY lines are processed as non-covered and will be denied.
      
        Do not automatically transfer a GY denial to the patient without
        reviewing liability requirements.
      
        Always identify the actual reason for non-payment.
      
        Verify the current CMS/MAC policy before correcting a claim.
      
        Document all AR follow-up activity.

GY AR Action Matrix

A quick way to decide what to investigate.

Situation	First Check	Likely Direction	AR Action
Statutorily excluded	CMS/MAC coverage rule	GY	Verify non-covered status and liability rules
Not a Medicare benefit	Medicare benefit definition	GY	Confirm correct billing and secondary coverage
Not reasonable and necessary	Medical necessity policy	GZ or GA depending on ABN circumstances	Review documentation and ABN status
Voluntary liability notice	Notice documentation	GX may accompany GY when applicable	Verify notice and claim reporting
Secondary payer exists	Secondary benefit policy	Payer-specific	Verify COB and secondary processing

Modifier GY FAQs

What is Modifier GY?

Modifier GY identifies an item or service that is statutorily excluded or does not meet the definition of any Medicare benefit.

Does GY mean the service is medically unnecessary?

No. GY addresses statutory non-coverage or a service that does not meet the definition of a Medicare benefit. Medical necessity denials are a different concept.

What is the difference between GY and GZ?

GY is used for a statutory exclusion or a service that does not meet the Medicare benefit definition. GZ is used when the provider expects Medicare to deny a service as not reasonable and necessary and no ABN was obtained.

What is the difference between GY and GA?

GY identifies a statutory/non-benefit exclusion. GA indicates that a waiver of liability statement was issued as required by payer policy, generally in connection with an applicable ABN situation.

Can GY be used with GX?

Yes. CMS states that GX may be used in association with GY when a voluntary notice of liability is issued for an applicable non-covered service.

Is an ABN required for every GY service?

No. CMS distinguishes statutory exclusions from services that are expected to be denied because they are not reasonable and necessary. An ABN is generally not required solely because a service is statutorily excluded.

Will Medicare pay a service billed with GY?

GY identifies the line as non-covered. CMS guidance indicates that lines submitted with GY are processed as non-covered and will be denied.

Should an AR caller appeal every GY denial?

No. First determine whether the service is actually excluded by statute or outside the Medicare benefit. If the non-coverage is legally applicable, an appeal may not result in Medicare payment.

Can a secondary insurance pay after Medicare denies a GY service?

It depends on the secondary payer’s benefit and contract rules. Medicare’s non-coverage does not automatically establish the secondary payer’s coverage.

Does GY apply only to Medicare Part B?

CMS claims-processing guidance describes GY for provider claim lines and includes billing use across applicable claim types. Always verify the specific setting and current contractor instructions.

What should I do when a payer says GY is incorrect?

Obtain the exact denial reason, CARC/RARC, identify why the service is not being paid, review the applicable CMS/MAC policy, and determine whether the issue is statutory non-coverage, medical necessity, coding or another claim issue.

Does GY automatically make the patient responsible?

No. Patient liability should be evaluated under the applicable Medicare rules, notice requirements, payer policies and contractual arrangements.

What does CMS say about GY?

CMS defines GY as an item or service that is statutorily excluded or does not meet the definition of any Medicare benefit. CMS also describes GY as a billing modifier for non-covered services.

Can GY be used just because the payer denied a claim?

No. The modifier should reflect the actual reason the service is non-covered. A denial by itself does not establish that GY is appropriate.

Official CMS References

Verify Medicare modifier and non-covered service rules using official CMS resources.

CMS — Medicare Claims Processing Manual, Chapter 1 CMS claims-processing guidance defining GY and explaining its billing use and payment result. CMS — Medicare Advance Written Notices of Non-Coverage CMS MLN guidance explaining GA, GX, GY and GZ and their relationship to ABN reporting. CMS Medicare Coverage Database Official CMS resource for checking Medicare coverage policies, billing articles and contractor guidance. CMS Internet-Only Manuals Official CMS collection of Medicare manuals and program guidance.

Coding & Billing Disclaimer

This page is provided for US medical billing, coding and RCM education. Modifier selection and reimbursement depend on the actual service, Medicare benefit category, statutory exclusions, documentation, CMS guidance, MAC instructions and payer-specific policies. Always verify current official guidance before billing, correcting or appealing a claim.

Master Modifier GY

Learn practical Medicare billing, modifiers, denial management, AR calling and US healthcare RCM with LearnMedicalBilling.in.

Explore LearnMedicalBilling.in