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

Unlike Modifier GA, which is used when Medicare may deny an otherwise covered service for lack of medical necessity, Modifier GY applies when Medicare has no legal authority to cover the item or service, regardless of medical necessity.

Modifier GY helps Medicare process claims correctly and establishes that the item or service falls outside the Medicare benefit.

Modifier

Modifier Name

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

Plain English Explanation

Modifier GY tells Medicare:

“This item or service is not a Medicare benefit or is excluded from Medicare coverage by law.”

Because Medicare does not cover the item or service, payment is not expected.

Purpose of Modifier GY

Modifier GY is used to:

Identify services excluded by Medicare statute.
Identify items that do not meet Medicare’s definition of a covered benefit.
Help Medicare generate an appropriate denial.
Facilitate coordination of benefits when a secondary payer may require a Medicare denial.
Support compliant Medicare billing.

Understanding Modifier GY

Some items are never covered by Medicare because:

Federal law excludes them.
They do not meet Medicare’s benefit definitions.
They are considered personal convenience items.
They fall outside Medicare Part B benefits.

Appending Modifier GY informs Medicare that the supplier understands the item is non-covered and is submitting the claim accordingly.

When to Use Modifier GY

Use Modifier GY when:

The item is statutorily excluded from Medicare.
The item does not meet the definition of durable medical equipment (DME), prosthetics, orthotics, supplies, or another Medicare benefit category.
A Medicare denial is needed for coordination of benefits.
Medicare policy specifically instructs suppliers to report Modifier GY.

Examples include:

Personal comfort or convenience items.
Routine hygiene products not covered by Medicare.
Equipment that does not meet the Medicare definition of DME.
Services specifically excluded under the Medicare statute.

When NOT to Use Modifier GY

Do not use Modifier GY when:

Medicare covers the item if medical necessity requirements are met (consider GA, GZ, or KX as appropriate).
The denial is expected because documentation is incomplete rather than because the item is excluded.
The item qualifies as a Medicare benefit.
Another modifier more accurately describes the billing circumstance.

Medicare Rules

Under Medicare:

Modifier GY identifies statutory exclusions or non-benefit items.
Medicare generally denies the claim as not a covered benefit.
An Advance Beneficiary Notice (ABN) is not required because the item is never covered by Medicare.
If the supplier voluntarily provides a notice of liability, Modifier GX may also be reported when appropriate.
Medicare denial codes generated from a GY claim may be used to bill a secondary payer.

Commercial Insurance Rules

Commercial insurers have their own benefit designs.

Some commercial plans may:

Cover items excluded by Medicare.
Ignore Modifier GY.
Require different modifiers or documentation.

Always verify payer-specific coverage policies.

Documentation Requirements

Documentation should include:

Physician order, if applicable.
Description of the item or service.
Medical record documentation.
HCPCS code.
Modifier GY.
Voluntary Notice of Liability (if Modifier GX is also used).
Supplier records.
Proof of delivery, when applicable.

Real Billing Examples

Example 1 – Comfort Item

A beneficiary requests a comfort cushion that is specifically excluded from Medicare coverage.

Billing

Appropriate HCPCS code
Modifier GY

Example 2 – Equipment Not Meeting DME Definition

A supplier furnishes an item that does not satisfy Medicare’s definition of durable medical equipment.

Billing

Appropriate HCPCS code
Modifier GY

Example 3 – Statutorily Excluded Supply

A beneficiary requests supplies that Medicare excludes by statute.

The supplier voluntarily issues a Notice of Liability.

Billing

Appropriate HCPCS code
Modifiers GX GY

Example 4 – Secondary Insurance Billing

A supplier submits a statutorily excluded claim to Medicare using Modifier GY to obtain a denial before billing the patient’s secondary insurance.

Billing

Appropriate HCPCS code
Modifier GY

Example 5 – Incorrect Use

A supplier bills:

HCPCS code
Modifier GY

However, the item is actually covered by Medicare when medical necessity criteria are met.

This is incorrect because Modifier GY should only be used for items or services that Medicare never covers or that do not meet a Medicare benefit definition.

CMS-1500 Claim Example

Field	Example
HCPCS	Appropriate HCPCS Code
Modifier 1	GY
Modifier 2	GX (if applicable)
Diagnosis Pointer	Appropriate ICD-10-CM diagnosis
Units	1

Common Denial Reasons

Incorrect use of GY for a covered service.
Missing supporting documentation.
Incorrect HCPCS code.
Invalid modifier combination.
GY omitted when required for a statutory exclusion.
Billing a covered item with GY instead of the appropriate modifier.

How to Correct the Denial

Verify Medicare coverage status.
Review CMS guidance and applicable DME MAC policy.
Confirm whether the item is statutorily excluded.
Remove GY if the item is actually covered.
Add GX if a voluntary notice of liability was issued.
Resubmit the corrected claim if appropriate.

Coding Tips

Use GY only for statutory exclusions or non-benefit items.
Do not confuse GY with GA or GZ.
Review Medicare benefit categories before billing.
Use GX with GY when a voluntary notice has been issued.
Maintain documentation supporting the item’s coverage status.

Modifier GY vs Modifier GA

Modifier	Description
GY	Statutorily excluded or not a Medicare benefit
GA	Covered service expected to be denied for medical necessity with a required ABN

Modifier GY vs Modifier GX

Modifier	Description
GY	Identifies the item as non-covered by Medicare
GX	Indicates a voluntary Notice of Liability was issued

Modifier GY vs Modifier GZ

Modifier	Description
GY	Item is excluded from Medicare coverage
GZ	Covered item expected to be denied as not reasonable and necessary, and no ABN was obtained

Modifier GY vs Modifier KX

Modifier	Description
GY	Item is not a Medicare benefit
KX	Medicare coverage requirements have been met

Frequently Asked Questions (FAQs)

Q1. What does Modifier GY mean?

Answer: It indicates that an item or service is excluded from Medicare coverage by law or does not meet the definition of a Medicare benefit.

Q2. Does Modifier GY mean Medicare will pay the claim?

Answer: No. Medicare generally denies claims submitted with Modifier GY because the item is not covered under the Medicare program.

Q3. Is an ABN required when using Modifier GY?

Answer: No. Since the item or service is never covered by Medicare, a mandatory ABN is generally not required. However, a supplier may voluntarily notify the beneficiary, in which case Modifier GX may also be reported.

Q4. Can GY be used with GX?

Answer: Yes. GX and GY are commonly reported together when a voluntary Notice of Liability has been provided for a statutorily excluded item or service.

Q5. Why do suppliers sometimes bill Medicare for non-covered items?

Answer: To obtain an official Medicare denial, which may be required before billing a secondary insurance payer.

AR Caller Tips

When following up on claims billed with Modifier GY:

Confirm that the item is truly statutorily excluded.
Review the applicable Medicare policy.
Verify whether a voluntary notice (GX) was provided.
Obtain the Medicare denial if needed for secondary billing.
Document the payer representative’s name, reference number, and claim status.

Interview Questions

Question 1

What does Modifier GY indicate?

Answer: The item or service is excluded from Medicare coverage by statute or is not a Medicare benefit.

Question 2

Is an ABN required for Modifier GY?

Answer: No. A mandatory ABN is generally not required because the item is never covered by Medicare.

Question 3

Which modifier is commonly billed with GY?

Answer: Modifier GX, when a voluntary Notice of Liability has been issued.

Question 4

Why would a supplier submit a GY claim to Medicare?

Answer: To obtain a Medicare denial for coordination of benefits or secondary insurance processing.

Practice Scenario

Scenario

A Medicare beneficiary requests a personal convenience item that Medicare excludes by statute. The supplier voluntarily provides written notice explaining that Medicare will not cover the item.

Question

Which modifiers should be reported?

Answer

Report the appropriate HCPCS code with Modifiers GY and GX, indicating that the item is statutorily excluded from Medicare coverage and that a voluntary notice of liability was provided.

Related DME Modifiers

GX – Notice of Liability Issued, Voluntary Under Payer Policy
GA – Waiver of Liability Statement Issued as Required by Payer Policy
GZ – Item or Service Expected to Be Denied as Not Reasonable and Necessary; No ABN Obtained
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 GY for items that Medicare may cover with proper documentation.
Confusing GY with GA or GZ.
Forgetting GX when a voluntary notice was issued.
Incorrect HCPCS coding.
Failing to obtain a Medicare denial before billing a secondary payer.
Assuming all non-covered items require an ABN.

Key Takeaways

Modifier GY identifies items or services that are statutorily excluded from Medicare coverage or do not meet the definition of a Medicare benefit.
It is commonly used to obtain a Medicare denial for coordination of benefits.
A mandatory ABN is generally not required with GY.
Modifier GX may be reported when a voluntary Notice of Liability has been issued.
Proper use of GY helps ensure accurate Medicare claim processing and compliance.

References

CMS Medicare Claims Processing Manual, Chapter 30 – Financial Liability Protections.
CMS Medicare Benefit Policy Manual.
CMS Medicare Coverage Database.
HCPCS Level II Code Book.
DME Medicare Administrative Contractor (DME MAC) Supplier Manuals.

Conclusion

Modifier GY is an essential Medicare modifier used when an item or service is excluded from Medicare coverage by statute or does not qualify as a Medicare benefit. It helps Medicare process claims appropriately, supports coordination of benefits with secondary payers, and distinguishes statutory exclusions from medical necessity denials. Understanding the differences between GY, GA, GX, and GZ is critical for accurate DME billing and compliance with Medicare policy.

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 benefit policies, 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 Medicare Benefit Policy Manual, the HCPCS Level II Code Book, DME Medicare Administrative Contractor (DME MAC) guidance, and payer-specific billing policies before coding, billing, or submitting claims.