CPT Update: Modifier 25 Holds Hidden Traps for Coders in 2019

Modifier 25 used to be your friend, but it may soon become your biggest foe when reporting 2019 CPT codes. Now, government and private payers alike are flagging claims involving modifier 25 for denials and severe payment cuts.

Get the guidance you need on modifier 25 and so many other 2019 CPT coding-survival topics in ProfEdOnDemand’s CPT coding update webinars.

For instance, in our expert sessions, you’ll learn how billing Evaluation and Management (E/M) codes and appending modifier 25 (significant, separately identifiable E/M service), may lead to drastic cuts to your reimbursement.  Note: This is especially true if you have patients who have insurance with a Medicare Advantage carrier that operates in 25 states.

Exspect Your Pay to Be Cut in Half

Pay attention: On Aug. 1, 2018, Independence Health Group announced that it would apply a 50-percent payment reduction to an E/M service when it’s billed with a modifier 25 on the same date as a minor procedure. The insurer also said it would cut payments by 50 percent for E/M services billed with modifier 25 when one of 17 preventative service codes is also billed.

“This revised payment policy will significantly impact reimbursement for many practices around the country,” notes coding expert and ProfEdOnDemand instructor Terry Fletcher. “I fear this could have physicians bringing patients back on a different day to get paid for both services at 100 percent.”

What’s more: The Centers for Medicare & Medicaid Services (CMS) also proposed this reimbursement change in August 2018, in part to reduce multiple payments, according to ICD-10 Monitor. CMS compared an E/M with a procedure to a surgical encounter in which multiple payment reductions would apply.

Also, CMS stated that there are “efficiencies” associated with an E/M encounter and procedures on the same visit, and that it should apply multiple payment rules to these instances. The 50-percent payment reduction, coupled with the new flat-rate reimbursement model for office/outpatient E/M services, “could be catastrophic for many practices and healthcare organizations servicing Medicare beneficiaries,” ICD-10 Monitor warned.

Watch Out for Changing Automated Pay Policy Rules

Heads up: In November 2018, providers also began reporting payment denials from Health Care Services Corporation (HCSC) for claims that included modifiers 25 and 59, according to the American Osteopathic Association (AOA). HCSC operates Blue Cross Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma, and Texas.

HCSC made changes to its automated payment policy rules regarding claims using modifiers 25 and 59, which initiated significantly increased scrutiny of documentation for such claims and led to payment denials for part of the services provided. The broadening scrutiny of claims involving modifier codes appeared to affect a wide variety of specialties, including osteopathy, dermatology, and pain management.

Other large payers may adopt similar edits regarding modifier 25 usage, “which means that physicians will have to spend more time on clinical documentation if they want to win appeals,” the AOA cautioned. Auditors will want to see more detailed documentation of the E/M services as well as the procedure for a successful physician appeal.

Worse: And on top of the CPT code changes for 2019, CMS is proposing a simplified E/M payment model, which would offer a flat rate of $93 for established office visit codes (99212-99215) and $135 for new patient visits (99202-99205). The proposal would eliminate the need to re-document redundant patient information from prior visits and instead focus on medical decision-making, Fletcher notes.

CMS would also blend E/M encounters into one specific relative value unit (RVU) because CMS believes documentation is based on providers’ ability to get into their electronic medical records (EMRs) to find additional information other than what was noted.

Downside: But this proposed payment model would effectively penalize physicians who are caring for sicker patients who require more time, effort, and higher care levels to manage their complex issues, Fletcher said. For example, specialties like oncology, neurology, and rheumatology would suffer a 7-percent pay cut for E/M services. Cardiology, pulmonary, and nephrology practices would experience a 3-percent reimbursement reduction.

Don’t Be Afraid to Speak Up

Bottom line: Instead of serving as protection for your E/M encounters, modifier 25 may soon effectively become a reduction edit. If you’re participating with a Medicare Advantage plan, particularly through Independence Health Group, you should fight it with the provider relations department.

And gain the confidence for these kinds of fights—that is, to know when you’re right and to understand the rules to prove it—by attending ProfEdOnDemand’s 2019 CPT coding sessions!