Focus on modifier 25

By Alexander Miller, MD, September 2, 2019

You may have noticed that insurance companies and Medicare have been persistent in their scrutiny of the use of CPT^® modifier 25, which is defined as “Significant, Separately Identifiable Evaluation and Management Service by the Same Physician or Other Qualified Health Care Professional on the Same Day of the Procedure or Other Service.”

Why is this? After all, if you are providing a legitimate separately identifiable evaluation and management (E/M) service during a patient encounter that also includes a 0- or 10-day global procedure, should they not both be reportable and payable? Well, yes, but let’s look at some billing statistics that may explain why insurers are concerned.

Insurer concern with modifier 25 reporting surged in 2011 when Medicare, in its Part B News, published specialty-stratified claims data on modifier 25 utilization rates. The winner: dermatology, with 57.9% of claims submitted with modifier 25. Dermatology was way ahead of all specialties. Such a distinction will attract the attention of payers and claims adjudicators.

The Centers for Medicare and Medicaid Services (CMS) had a national Comparative Billing Report (CBR) produced to learn more about dermatologist utilization of modifier 25. This report examined billing of CPT 99211-99215 with and without an appended modifier 25 from February 2018 through January 2019 and was released in mid-2019.

The dermatology modifier 25 CBR consists of two parts: general claims data — which is available for public viewing — and individual practitioner data. The general data is available at https://cbr.cbrpepper.org/home.

The dermatology CBR data revealed:

> % of services appended with modifier 25

• National average: 54.90%
• Top state: Wyoming at 68.85%

> Average minutes per visit with and without modifier 25 on claim lines

• National average with modifier 25: 16.76 minutes
• National average without modifier 25: 15.95 minutes

> Average allowed charges per beneficiary

• National average: $123.60
• Range: $143.88 (California) to $79.38 (Vermont)

Individual practitioners whose modifier 25 billing rates are significantly higher (greater than 90th percentile) compared to state or national averages for any of the above three criteria will have received an individual CBR. The individual CBR is not an audit or a precursor to an audit. It is meant to alert the recipient to their individual outlier statistics and points out what criterion or criteria triggered the CBR alert. It is intended to stimulate the recipient to educate themselves on appropriate modifier 25 coding. The underlying message, however, is that you have called attention to yourself as an outlier. If you remain an outlier, then ultimately your Medicare Administrative Contractor (MAC) may focus upon you, as well.

High rates of modifier 25 use in dermatology can be explained by the concept that we treat patients with multiple concurrent problems, one or more of which may require a minor procedure, and others necessitating separate E/M evaluation. However, all of this is costing insurers money, and money gets attention. The result: closer scrutiny of claims with modifier 25 and initiatives aimed at reducing reimbursement for the sum total of services associated with modifier 25. Fortunately, our Academy has taken the lead in clarifying the appropriateness and value of 25 modified services to insurers, including CMS/Medicare. Most attempts at reducing reimbursement have been curtailed for the present. However, the process continues to evolve, and additional insurer initiatives may arise.

A case in point: Anthem Blue Cross of California sent out a “Dear Provider” letter dated June 27, 2019, announcing that a “prepayment clinical validation review process” for modifiers 25, 59, 57, and anatomical modifiers will be initiated for claims dates of service after Oct. 1, 2019.

What is the essence of all of the above? We are being watched! Our reimbursement patterns are being tracked. How should you react? Ensure that modifiers, including modifier 25, are being reported appropriately, and that the medical record justifies both the modifier(s) and the medical necessity of the reported service(s). Stay educated on proper modifier use and supporting documentation.

Fortunately, the Academy offers a variety of educational opportunities on its website (see sidebars for details). Additional information can be found in issues of the Derm Coding Consult. The Coding Resource Center, which has been effectively reconfigured to facilitate learning, reveals the basics as well as the nuances of proper modifier selection and justification.

Example 1: You receive a CBN. Hurray! You feel special, as not just anybody gets one of these! You ignore the report, as it is “educational,” and will not impact your bottom line.

Answer: Bad Move.You have been singled out as an outlier. Your MAC will likely discover that you are an outlier and will then track your performance over time. Staying the same may expose you to a focused Medicare audit, and persistent outlier behavior may result in prepayment audits, or worse. Educate yourself on appropriate use of modifier 25 and ensure medical record documentation supports the separately identifiable E/M service, when reported.

Example 2: Fearing the potential of chart audits, you substantially reduce reporting modifier 25 for separately identifiable E/M services. That should keep you safe from audits.

Answer: Incorrect. One should appropriately report all medically necessary services provided during an encounter. Not doing so would accomplish two things: non-payment for services rendered but not billed, and modifier reporting statistics would skew downward. If eventually you were to realize your folly and start billing modifier 25 when indicated, your modifier utilization statistic would rise. A substantial jump from a previous “norm” just might get you audited. Remember, an audit can be triggered by over- or under-coding.

Example 3: Your established patient complains of multiple rough lesions on the forearms and face. You examine the affected sun-exposed areas, diagnose actinic keratoses and freeze them with liquid nitrogen. You routinely report such encounters with CPT 17000-17004 for the destructions along with 99212.25 or 99213.25 for the examination and identification of the actinic keratoses.

Answer: Incorrect. The above service focuses upon the patient’s individual lesions, which were then treated. No separately identifiable E/M service, beyond that included in the destruction procedure, was rendered. 

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