Modifier 25 Madness – Disguises Continue

Posted September 7, 2018

Last October, Anthem announced that evaluation and management (E/M) services, historically eligible for separate reimbursement when reported by the same provider on the same day as a minor surgery, would be reduced by 50%.

Anthem believed that physicians were being reimbursed for “duplicative services” relating to fixed/indirect practice expense when an E/M service denoted by use of the modifier 25 and billed on the same day as a minor surgery.

Thanks to organized medicine, led by the AMA, the Anthem policy was not implemented.

Medicare, under the guise of the “Multiple Procedure Payment Reduction,” has since proposed an eerily familiar payment adjustment to rationalize “duplicative resource costs.”  An E/M service denoted by the use of the modifier 25 and billed on the same day as another procedure would be reduced by 50%.

This proposed policy is a significant shift in policy for Medicare. Traditionally, Medicare has been the one insurer that provided a number of resources on the proper use of modifier 25 and reimbursed physicians for the additional work performed.

The appropriate use of modifier 25 is not to pay for “duplicative services relating to fixed/indirect practice expense.” Instead it is used to account and pay for time, technical skill, effort and most importantly, medical judgement by the physician. That is the main purpose of the modifier 25.

KMA will keep members updated of any developments to this issue.