The Centers for Medicare & Medicaid Services (CMS) has again identified the potential overuse and misuse of Current Procedural Terminology (CPT®) code modifier 25. In the recently published proposed rule for the calendar year (CY) 2017 Medicare Physician Fee Schedule, CMS indicates that its CY 2015 Medicare claims review shows that 19 percent of the codes that describe 0-day global services were billed more than 50 percent of the time, with an evaluation and management (E/M) service with modifier 25 appended. CMS maintains that the routine billing of separate E/M services may indicate a possible problem with the valuation of the procedure codes, which are intended to include all of the routine care associated with the procedure. The agency has identified a number of high-volume codes to review for possible duplication of resources and overvaluation.1
This issue has been raised on multiple occasions since 2005, when the Office of the Inspector General (OIG) published an analysis showing that 35 percent of Medicare claims for modifier 25 did not meet Medicare program requirements.2 Since then, CMS and private payors have increased their scrutiny of codes reported with this modifier, sometimes resulting in significant repayment to Medicare. For example, earlier this year, the U.S. Attorney’s Office for the Northern District of Georgia reached a settlement with a dermatology practice to pay $1.9 million to settle claims that they violated the False Claims Act by billing Medicare for E/M services that were prohibited under Medicare rules.3
To understand why modifier 25 is under this type of scrutiny, surgeons need to understand how its use is defined. Simply put, modifier 25 is appended to an E/M code when a procedure and a separate and significant E/M service is performed by the same physician during the same session or on the same date.4 For example, an established patient comes to your office with a suspicious lesion and, based on your assessment, you decide to excise it. You wonder if you can report an E/M code with modifier 25 appended, as well as the minor procedure code for excising the lesion. The definition of what is “separate and significant” is at the heart of whether both an E/M with modifier 25 and a procedure code may be reported together.
Definition of modifier 25
Medicare requires that modifier 25 be used only on claims for E/M services and only when the E/M service is provided by the same physician on the same day as a global procedure or service. In addition, payment is made only if the physician indicates that the service is for a significant, separately identifiable E/M service that is above and beyond the usual preoperative and postoperative work required on the day of the procedure. The physician must appropriately and sufficiently document both the medically necessary E/M service and the procedure in the patient’s medical record to support the claim for these services, even though the documentation is not required to submit with the claim.5
CPT, on the other hand, defines modifier 25 as a significant, separately identifiable E/M service that the same physician or other qualified health care professional provides on the same day as the procedure or other service. The CPT codebook also states that a significant, separately identifiable E/M service is substantiated by documentation that satisfies the relevant criteria for the respective E/M service to be reported.6
Significant and separately identifiable
What exactly does significant and separately identifiable mean? How do you know when you have performed this service and therefore need to document a significant and separately identifiable E/M service? It is important to note that the relative value unit (RVU) for each minor procedure includes pre-service work that may include pre-evaluation time, patient positioning time, and time to scrub and dress before the procedure (see Table 1 for examples). As shown, the Medicare payment for incising and draining an abscess (10060) in the office includes 16 minutes of pre-service time. Medicare payment for performing a diagnostic colonoscopy (45378) includes 27 minutes of pre-service time. The RVUs for each of these procedures also includes intra-service time (in effect, the time it takes to perform the procedure), as well as post-procedure time. For both services, significant pre-service time is dedicated to evaluation: eight minutes for the abscess and 19 minutes for the colonoscopy.
Table 1. Pre-service time for selected minor surgical procedures (in minutes)
|CPT code||Global period
|10060||10||I&D [incision and drainage] abscess||8||3||5||16|
|11042||0||Debride subcutaneous tissue||9||1||1||11|
|36561||10||Insert CVA [central venous access] with port||20||5||10||35|
|49421||0||Insert intraperitoneal catheter, open||33||3||10||46|
Source: CY 2016 Medicare Physician Fee Schedule Time/Visit Database
Reporting an E/M code and a procedure code when your evaluation is limited to assessing the specific problem (for example, an abscess) is essentially double billing for the pre-service evaluation. Your E/M must significantly exceed the pre-service evaluation already paid as part of the procedure for it to qualify as significant and separately identifiable. If it does not, only the procedure should be billed. A different diagnosis code is not needed, and in most cases the diagnosis code for the E/M code and the procedure code will be the same. What must be documented is the history, exam, and decision-making process (all for a new patient and two of three for an established patient) that includes attention to more than the patient’s targeted chief complaint that is the reason for the minor procedure.
Avoiding misuse of modifier 25
To avoid overuse or misuse of modifier 25 and reduce the risk of an audit and repayment demand by payors, the ACS offers the following recommendations:
- Do not automatically report an E/M code every time you perform a minor procedure in an office or facility.
- Append modifier 25 to the E/M code on the claim, not to the procedure code.
- Recognize that every procedure includes pre-service time as part of the fee.
- If you perform an E/M service above and beyond the pre-service time associated with the procedure, make sure that the extended E/M work is medically necessary; don’t evaluate other body areas or organ systems unless a good clinical rationale for doing so can be provided.
- Both the medically necessary E/M service and the procedure must be appropriately and sufficiently documented in the patient’s medical record to support the need for modifier 25, even though the documentation is not required to be submitted with the claim.
- Modifier 25 may be used in the rare circumstance of an E/M service the day before a major operation and represents a significant, separately identifiable service; it likely would be associated with a different diagnosis (for example, evaluation of a cough that might affect the operation).
- Different diagnoses are not required to report the E/M service on the same date as the procedure or other service. As an example, a patient who has been treated in the past for gastroesophageal reflux disease (GERD) and is scheduled to have an upper endoscopy now complains of exacerbation of known irritable bowel syndrome (IBS) and asks that you review the medications for this condition. The upper endoscopy is performed for the workup of GERD and the medications for IBS are adjusted. The work associated with the E/M related to IBS would be reported with the E/M code and modifier 25 appended to indicate this is a separate service.
Accurate coding is the responsibility of the provider. This summary is intended only to serve as a resource to assist in the billing process.
- Department of Health and Human Services. Centers for Medicare & Medicaid Services; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Pricing Data Release; Medicare Advantage and Part D Medical Low Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model. Federal Register. Available at: www.regulations.gov/docket?D=CMS-2016-0116. Accessed September 28, 2016.
- Department of Health and Human Services. Office of the Inspector General. Use of Modifier 25. Available at: oig.hhs.gov/oei/reports/oei-07-03-00470.pdf. Accessed September 28, 2016.
- Department of Justice. The U.S. Attorney’s Office, Northern District of Georgia. Dermatology physicians and practice to pay $1.9 million to settle False Claims Act investigation for evaluation and management services. Available at: www.justice.gov/usao-ndga/pr/dermatology-physicians-and-practice-pay-19-million-settle-false-claims-act. Accessed September 28, 2016.
- Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual, Chapter 12, Section 40 and 40.1, (Rev. 3476, March 11, 2016). Available at: www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf. Accessed September 9, 2016.
- Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual, Chapter 12, Section 30.6.6, (Rev. 3476, March 11, 2016). Available at: www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf. Accessed September 9, 2016.
- American Medical Association. CPT 2017 Professional Edition (CPT/Current Procedural Terminology Professional Edition). Chicago, IL: American Medical Association; 2016:712.
*All specific references to CPT (Current Procedural Terminology) codes and descriptions are ©2015 American Medical Association. All rights reserved.