An easy-to-understand issue brief details the correct use of the AMA’s Current Procedure Terminology (CPT®) code set’s modifier 25, lists payer policies that may impede appropriate payment, and links to resources to help challenge insurance company payment denials.
Modifier 25 is used to signify that when a separate identifiable evaluation-and-management (E/M) service was performed, which can refer to two evaluation-and-management (E/M) services, or a procedure plus an E/M service.
Appending the CPT modifier 25 to an E/M service code on a claim indicates the code is a significant, separately identifiable 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 issue brief (PDF) explains.
“Its use allows two E/M services or a procedure plus an E/M service that are distinctly different but required for the patient’s condition to be appropriately reported and, therefore, appropriately paid,” the issue brief says.
The use of modifiers provides supplementary information for payer policy requirements. Payers, however, may not be aware that this is what the modifier is telling them.
“Unfortunately, there is a disconnect between physicians and payers regarding the feasibility of providing, documenting, reporting, and paying for multiple services,” according to an AMA Council on Medical Service report presented at the 2023 AMA Annual Meeting.
The use of modifier 25 “indicates that documentation is available in the patient’s record to support the reported E/M service as significant and separately identifiable,” the council report (PDF) adds.
Policies support use of modifier 25
The AMA House of Delegates adopted policies based on the report’s recommendations, which included directing the AMA to support:
- Mechanisms to report modifiers appropriately with the least administrative burden possible, including the development of electronic health record tools to facilitate the reporting of multiple, medically necessary services supported by modifier 25.
- Comprehensive education for physicians and insurers on the appropriate use of modifier 25.
According to the issue brief, answering “yes” to the following questions shows whether an E/M service justifies use of modifier 25 according to CPT guidelines:
- Did the physician perform and document the level of medical decision making or total time necessary to report a problem-oriented office or other outpatient E/M service for the complaint or problem?
- Could the work to address the complaint or problem stand alone as a reportable service?
- Did the physician perform extra work that went above and beyond the typical pre- or postoperative work associated with the procedure code?
What to anticipate from payers
The AMA issue brief highlights the Centers for Medicare & Medicaid Services’ policies regarding modifier 25 as well as variations in private-payer interpretations of modifier 25.
It also warns physicians that private payers may try to enforce policies that may add administrative burdens, lower payment or escalate patient cost-sharing. Such policies include:
- Requiring submission of documentation with the claim.
- Automatic reduction in payment for the second code to account for what they perceive to be “overlap” between the two codes—or rejecting the claim altogether.
- Applying the deductible for one of the services or requiring the patient to come back on another date to receive the additional service.
The brief links to a standardized letter that can be used to challenge payers’ denial of payment for claims using modifier 25. It lays out an argument that separate payment is warranted for distinct and separately identifiable E/M services.
“Payment policies that deny or reduce payment for E/M services reported with a modifier 25 serve as a disincentive for physicians to provide unscheduled services, which may force patients to schedule multiple visits (with additional co-payments),” the letter states. “This jeopardizes quality patient care and safety, as well as threatens the patient-physician relationship.”
The AMA’s “Debunking Regulatory Myths” series addresses the modifier 25 question at issue with this explainer: “Can physicians bill for both preventive and E/M services in the same visit?”
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