Use of Modifier 25 Explained

Just the facts, ma'am. It is easy to find both CPT and CMS guidance about the use of modifier 25, and if a group needs "just the facts," the facts are only a few keystrokes away. But if the facts are clear, why does the Office of Inspector General's (OIG) website continue to post notices of physician practices and hospital systems paying back millions of dollars for the use of modifier 25? Do healthcare providers not understand the facts or is there judgment in the interpretation of the guidance in the use of modifier 25?

Let's start with the facts. Modifier 25 is appended to an Evaluation and Management (E&M) service (never to a procedure) to indicate that a significant and separately identifiable E&M service was provided on the same day as a minor surgical procedure. Although I joke that any procedure done on me is a major procedure, a minor procedure is defined as a procedure with zero to ten global days in the CMS Physician Fee Schedule. The catch is the definition of a "significant and separately identifiable." Healthcare professionals often mistakenly believe that assessing the condition and deciding to perform a minor procedure entitles them to an E&M service on the same day as the procedure. This is incorrect.

The National Correct Coding Initiative (NCCI) manual states "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. …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."

And the CMS manual states that "The initial evaluation is always included in the allowance for a minor surgical procedure."

That is, the payment for evaluating the condition and deciding to perform a procedure is considered part of the payment for the procedure, unless there is a significant and separately identifiable service performed. Do not report a separate E&M service for a planned procedure. Many minor procedures on healthy patients do not require a separate E&M, such as lesion destruction or punch biopsy. The clinician is paid for the evaluation of the lesion as part of the destruction or biopsy. It is permissible to report an E&M service for an unrelated problem or when the problem being evaluated wouldn't necessarily result in the procedure. A patient presents with abnormal vaginal bleeding. The physician assesses the problem prior to deciding to perform the endometrial biopsy. Or, a patient presents with multiple non-healing wounds, and the physician addresses the patient's vascular status, compliance with diabetic regimen, and decides to debride an ulcer. Both the procedure and the E&M may be reported.

So, do healthcare providers not understand the facts or is there judgment in the interpretation and guidance? Both are true. On the provider side, we haven't heeded the statement that the decision to perform a minor procedure is included in the payment for the minor procedure. On the payer side, what constitutes significant and separately identifiable work is not clearly defined. Physician practices might remember this mantra: Using modifier 25 is not always or never, but sometimes. CMS, payers, and the OIG have the use of modifier 25 on their watch lists, so stop and consider whether the E&M service is above and beyond evaluating the site and deciding to perform the service.

Betsy Nicoletti is the founder of Codapedia.com. She is the author of "A Field Guide to Physician Coding." She believes all physicians can improve their compliance and increase their revenue through better coding. She may be reached at betsy.nicoletti@gmail.com or 802 885 5641.