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Reimbursement and Practice Management

Get to Know Modifier-25

The American Medical Association (AMA) created and maintains the set of codes used to describe professional services in the U.S. healthcare system. Known as Current Procedural Terminology® (CPT), this data set, a component of the Healthcare Common Procedure Coding System, contains more than 7,500 transaction codes used to bill for and track services in a standard, systemic manner. Occasionally, there are certain circumstances that can't be defined by the CPT® code, but require conveyance to the insurance payer.

 

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The American Medical Association (AMA) created and maintains the set of codes used to describe professional services in the U.S. healthcare system. Known as Current Procedural Terminology® (CPT), this data set, a component of the Healthcare Common Procedure Coding System, contains more than 7,500 transaction codes used to bill for and track services in a standard, systemic manner. Occasionally, there are certain circumstances that can’t be defined by the CPT® code, but require conveyance to the insurance payer.

Additional information can be provided by adding modifiers to CPT codes. Although there are dozens of modifiers, one of the most widely used is modifier -25. This modifier signals a significant, separately identifiable evaluation and management (E/M) service. The modifier is used when there is work that goes above and beyond that which would normally be associated with a service, such as a preventive medicine service or a minor surgical procedure. In other words, the modifier allows physicians to be paid for E/M services that would otherwise be denied as bundled.

This modifier is widely used – and commonly misused. The Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees the Medicare program, recently announced an investigation of Medicare claims data for 2015, discovering that 19% of the codes that described minor procedures were billed more than 50% of the time with an E/M with modifier -25. This has piqued their interest, since the “above and beyond” conditions may not have been reached more than half of the time the procedure is performed.

It is crucial to understand the appropriate use of modifier -25 to ensure that you are paid accurately – while avoiding compliance issues. In the CPT Manual, the AMA defines -25 as:
“Significant, separately identifiable evaluation and management [E/M] service by the same physician or other qualified health care professional on the same day of the procedure or other service.”

The AMA provides the following guidance when using this modifier: “…it may be necessary to indicate that on the day a procedure or service identified by a CPT code was performed, the patient’s conditions required a significant, separately identifiable E/M service above and beyond the other service provided or beyond the usual preoperative and postoperative care associated with the procedure that was performed.” The E/M service, however, must satisfy the “relevant criteria for the respective E/M services to be reported.” Same day equates to services provided on the same day as the other service or procedure.

Clarifying the definition of “same physician,” Medicare regulations states: "Physicians in the same group practice who are in the same specialty must bill and be paid as though they were a single physician." However, other payers disagree, instead sticking only to the rendering physician.

The term “significant,” of course, implies that which is medically necessary, defined as a problem that requires treatment. In other words, the “above and beyond” component is expected to clarify the appropriate usage of the modifier. If the service is performed as a routine part of the procedure, neither the E/M code nor the -25 modifier should be billed.

While a separate diagnosis code may help to support the medical necessity for the distinct services, the AMA points out that a different diagnosis is not required to use modifier 25. Indeed, states the AMA, “the E/M service may be prompted by the symptom or indication for which the procedure and/or service was provided.”

There may, however, be some additional requirements imposed by insurance payers when using modifier -25 in the event that a procedure is performed at the same time. For Medicare, according to CMS in Chapter 11 of the National Correct Coding Initiative, these reimbursement guidelines apply:

If a procedure has a global period of 000 or 010 days, it is defined as a minor surgical procedure….In general E&M services on the same date of service as the minor surgical procedure are included in the payment for the procedure. The decision to perform a minor surgical procedure is included in the payment for the minor surgical procedure and should not be reported separately as an E&M service. However, a significant and separately identifiable E&M service unrelated to the decision to perform the minor surgical procedure is separately reportable with modifier 25. The E&M service and minor surgical procedure do not require different diagnoses. If a minor surgical procedure is performed on a new patient, the same rules for reporting E&M services apply. The fact that the patient is “new” to the provider is not sufficient alone to justify reporting an E&M service on the same date of service as a minor surgical procedure.

Recognize that there are host of payers – for examples, many Medicaid plans - that have never recognized this modifier, and refuse to consider doing so even upon an appeal. However, if you are complying with the appropriate guidelines for the use of modifier -25, don’t eliminate its usage just because a single payer doesn’t recognize it. That said, given the perceived misuse, there are payers that now require documentation of the encounter to determine if payment is appropriate. Alert your business office to these circumstances, because you’ll need to be prepared to submit your notes for the service to be considered for payment.

When an -25 modifier is appropriate to code, consider organizing your record of the visit so that the documentation for the problem-focused E/M service is distinct from the citation related to the preventive service or procedure. The E/M service considered significant and separately identifiable must meet documentation requirements for the code level selected. Although it’s not necessary, you may even want to use a phrase such as “a significant, separately identifiable E/M service was performed to evaluate …” in your note. This is helpful to support any necessary appeal related to a denial of payment. Regardless of the language, the documentation within the patient’s language must support the level of the E/M service you’re reporting.

Modifier -25 is not applicable to every service you provide; however, its usage is important to understand. When it is appropriate, you deserve to use – and get paid – for these distinct services.

Note: CPT® is a registered trademark of the American Medical Association.

Tip 1: Government to Audit Modifier -25 Usage

In 2017, the Centers for Medicare & Medicaid Services (CMS) announced its intention to audit the appropriate use of modifier -25 upon performing and seeking payment for a minor procedure. In the November 2016 release of the Final Rule for the 2017 Medicare Physician Fee Schedule, CMS reveals: “we are finalizing our screen for 0-day global services that are typically billed with an E/M with Modifier 25 as a mechanism for identifying services that are potentially misvalued.” Based on its review of the use of modifier -25, CMS determined that 19% of the codes that described 0-day global services were billed more than 50% of the time with an E/M with Modifier 25 are billed incorrectly. The federal agency provided a list of 19 procedures it is scrutinizing in 2017, including CPT® codes 20551 (injections of tendon attachment to bone) and 29105 (application of long arm splint [shoulder to hand]).

Tip 2: Modify the Right Code

Modifier -25, which signals a service that is provided as a separate, identifiable one, is always used in a situation where two (or more) CPT codes are being billed. The very nature of the modifier is to indicate that one service can be distinguished from the other, thereby deserving of separate payment. The modifier, however, must be added to the correct CPT code. Which one should you choose? The evaluation and management (E/M) service is the appropriate one to select. In the event that you are billing a preventive visit and a problem-focused visit, the modifier should be attached to the problem-focused visit (e.g., 99213).

Tip 3: E/M Plus a Procedure

According to Medicare contractor WPS, “All E/M services provided on the same day as a procedure are part of the procedure and Medicare only makes separate payment if an exception applies.” Modifier 25 indicates that, on the day of a procedure, the patient's condition requires a significant, separately identifiable E/M service, beyond the normal pre- and post-operative care associated with the procedure or service performed.

Tip 4: Double Copayments May be Required

Some insurance payers may require copayments for each service, particularly if you are billing a preventive service with a problem-focused visit. This is an issue related to the plan benefit design of the patient’s insurance coverage; there is little that you can do, since you are contractually obligated to comply with the plan’s requirements if you are a participating provider. In this case, cite the benefit of convenience, noting that both copayments would have otherwise been paid if the patient returned to address the problem related to the significant, separately identifiable E/M service.

United States