Using Modifier – 25 on an E/M Visit

In recent years, there has been an increase in scrutiny regarding the use of modifier -25 to identify separate evaluation and management (E/M) services on the same day as another procedure. Insurers are now demanding documentation of such services both before and after payment, leading to a significant administrative burden for urology practices. The reason for this burden is unclear. It may be due to an actual overuse of such services, or it could be a strategic decision by insurers to eventually discourage practices from reporting E/M services on the same date of service as procedures, potentially resulting in long-term cost savings for the payers.

Regrettably, we have received reports that some groups have opted out of billing E/M services on the same date due to the high level of effort and expenses required to obtain proper reimbursement. Instead, these groups have chosen to provide free care or have patients return on another date for that aspect of their treatment. This is far from ideal as it places a significant burden on both patients and practices, resulting in delayed care and inconvenience for patients. The rules were established to ensure that services are reimbursed properly when billed correctly.

On the payer side, modifier -25 has been a target of focused review for several years. This modifier is defined as a significant, separately identifiable E/M service by the same physician or other qualified health care professional on the same day as the procedure or other service. This scrutiny began after a report by the US Department of Health & Human Services Office of the Inspector General in 2005 revealed that modifier -25 was incorrectly reported in 35% of cases reviewed. Recently, payers have observed a lack of documentation or medical necessity in enough cases to warrant increasing their resources to review charts with modifier -25. Furthermore, it is probable that these reviews are being conducted using computer-assisted coding tools that utilize advanced recognition and processing techniques to expedite chart review, and coding personnel are also being added to enhance the number of charts that can be reviewed. Both of these investments by the payer must yield dividends in the short and long term.

In an environment of stagnant reimbursement and rising costs, is it appropriate to alter your practice methods or provide services for free? Can your office infrastructure accommodate the added workload? Alternatively, are there alternative solutions to tackle this problem?

Before discussing potential solutions, it’s necessary to review the reporting guidelines for modifier -25 as defined in the Current Procedural Terminology (CPT):

“It might be necessary to indicate that, on the day when a CPT-coded service or procedure was performed, the patient’s condition necessitated a significant, separately identifiable E/M service beyond what was provided or the usual preoperative and postoperative care associated with the procedure. Documentation that fulfills the relevant criteria for the corresponding E/M service to be reported (see Evaluation and Management Services Guidelines for directions on determining the level of E/M service) defines or supports a significant, separately identifiable E/M service. The E/M service might be prompted by the symptom or condition for which the procedure and/or service was given. Thus, reporting different diagnoses for the E/M services on the same day is not required. This circumstance may be indicated by appending modifier -25 to the suitable level of E/M service.”

This is an excerpt from the Medicare Claims Processing Manual Chapter 12 – Physicians/Nonphysician Practitioners, regarding the use of CPT Modifier “-25” for a significant evaluation and management service by the same physician on the date of a global procedure.

“According to Medicare regulations, the use of CPT modifier -25 is limited to claims for evaluation and management (E/M) services and only when these services are provided by the same physician or qualified nonphysician practitioner to the same patient on the same day as another procedure or service. Medicare Administrative Contractors (MACs) will pay for an E/M service provided on the day of a procedure with a global fee period if the physician indicates that the service is for a significant, separately identifiable E/M service beyond the usual pre- and post-operative work of the procedure. Different diagnoses are not necessary for reporting the E/M service on the same date as the procedure or service, and modifier -25 should be added to the E/M code on the claim.

The physician or qualified nonphysician practitioner must ensure that both the medically necessary E/M service and the procedure are fully and accurately documented in the patient’s medical record to substantiate the claim for these services. Although the documentation does not need to be submitted with the claim, it must be available upon request for audit purposes.

If a physician submits a claim with the CPT modifier ‘-25’, A/B MACs (B) will cover the service in addition to the global fee without any extra documentation requirements, except in the following cases:

• When billing for inpatient dialysis services;
• When preoperative critical care codes are billed on the date of the procedure, the diagnosis must support that the service is unrelated to the performance of the procedure; or
• When an A/B MAC (B) has conducted a specific medical review process and determined that an individual or a group has a high usage of modifier ‘-25’ compared to other physicians, has conducted a case-by-case review of the records to verify that the use of the modifier was inappropriate, and has provided education to the individual or group.

In this case, A/B MACs (B) may not allow the use of CPT modifier ‘-25’ to generate payment for multiple evaluation and management services provided by the same physician on the same day, regardless of the CPT modifier definition.”

As we know, private insurance companies can establish their own regulations that differ from those set forth by Medicare. As a result of a 2007 class-action lawsuit against various Blue Cross and Blue Shield organizations, private payers must be more open about their CPT and Medicare rules. Several groups that work with these payers have agreed to the regulations outlined in the contract and published by the payer. While this article concentrates on CPT and Medicare, it is recommended that you review the rules of your top-volume payers.

When considering the clinical aspects of a visit, it is important to adhere to the Medicare rules and definitions. Additionally, supporting documentation and the presentation of the reason for the service, the effort, and the findings must be taken into account. The following are the top five basics to keep in mind:

1. For most services, payment includes preservice work, the service itself, postservice care, and explaining results to the patient. If the work is included in these categories and within the “global” period for that payer, you should not bill for an E/M service in addition to the service/procedure.
2. Patients and caregivers must be in a condition to properly receive and understand the services provided and participate in any further management decisions of care. If the patient is not alert enough to participate in an E/M service, it should not be reported.
3. The provision of any service must meet medical necessity thresholds and be supported by documentation that explains the need and appropriateness of the care provided. If a medically necessary E/M service is provided on the same date as the encounter, clearly document the reason for the visit and consider whether the E/M service was medically appropriate and necessary based on what your urology peers would say.
4. E/M services with modifier -25 appended must conform to the CPT definition and the payer’s rules. For Medicare, this means the following:
   1. Append modifier -25 to E/M codes provided on the same date of the procedure/service by the same physician/advanced practice provider.
   2. Documentation must support the E/M service, and a well-designed note that separates the procedure from the E/M service can help with compliance.
   3. A separate diagnosis is not required for the use of modifier -25, but a separate diagnosis is more easily identified as separately identifiable if the service is provided for a different problem represented by a separate diagnosis.
5. Establish an internal review process to ensure that modifier -25 is justified and that any documentation submitted includes the necessary information to pass a chart review. If documentation supports payment for 100% of encounters reviewed, this can be used as evidence when discussing chart reviews with payers. It is important to push provider representatives with any insurance company, but data, a clear plan, and/or market dominance for urology services may be necessary to persuade a payer to change.

We have not included the option of simply discontinuing the billing for E/M work performed on the same day as procedures in our list of top 5 actions. While this may be the only viable option for some smaller practices, we recommend carefully considering both short- and long-term consequences before making this decision. For instance, let’s assume that the group’s average payment for an established patient office visit is $109.63, with an even split between 99213 and 99214 codes. If the group sees 10 patients per week for whom they choose not to bill due to payer requests for -25 E/M service documentation, they would be forfeiting $4,385 in monthly revenue. Furthermore, by foregoing the billing for E/M services, the group is only reducing the follow-up work associated with payment, but the underlying work still needs to be done. Even assuming a generous 10-minute timeframe per chart submission, the group would need to devote 7 hours of labor, with associated costs, to recover the revenue they are already entitled to. This expense cannot be overlooked.

A different strategy is to schedule E/M follow-up appointments for a separate date of service. However, this approach has its own set of implications, such as potential disruptions to continuity of care, additional copays for patients, and the added expense of a second office visit or telehealth consultation. On the bright side, it can create an advocate in the patient who may be willing to assist with policy changes. Nonetheless, we advise you to assess the effects on your practice before deciding to implement this strategy.

If the policies of certain insurance plans create a significant burden for your practice, dropping those plans may be a viable option for some. However, a more far-reaching solution may involve pursuing class action suits or state legislative action to address these issues, with prior authorization reform as a potential “twofer.”

For instance, Cigna has recently sent letters to many urology practices stating that they will need to submit documentation with all established patient E/M visits that have a modifier -25 on the same day as a minor procedure starting in May 2023. It is crucial to consider all available options and your practice’s capacity to handle this level of submission to determine whether a change is necessary, even if patients feel like pawns in the insurers’ game. We should encourage them to voice their complaints to their insurers about their policies. In the long term, we believe that it is worthwhile to fight for the use of modifier -25.