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How to use Modifier 25 Accurately for Medicare

Modifier 25 is used when a minor procedure (one with a 0- or 10-day global period) and a significant and separately identifiable evaluation and management (E/M) service are performed during the same session or day. Modifier 25 (significant, separately identifiable evaluation and management [E/M] service by the same physician on the same day of the procedure or other services) is the most important modifier in CPT.  It creates the opportunity to capture physician work done when separate E/M services are provided at the time of another E/M visit or procedural service. This allows for more efficient use of your time and may save the patient another visit. However, use of this modifier has been associated with frustration because many payers, including Medicaid, do not recognize it.

The Office of the Inspector General (OIG) and Medicare have identified the use of modifier 25 as an area of potential overuse and misuse. This is not a new issue; problems with the use of modifier 25 have been known since 2005 when the OIG published an analysis showing that 35 percent of Medicare claims with modifier 25 did not meet program requirements.

Understanding the correct use of this modifier and the required documentation is key to avoiding problems and adjudicating inappropriate claim denials or underpayments. We have shared current rules and guidelines and provide clinical scenarios as examples.

Key Points:

  • Physicians and qualified non-physician practitioners (NPP) should use CPT modifier -25 to designate a significant, separately identifiable E/M service provided by the same physician/qualified NPP to the same patient on the same day as another procedure or other service with a global fee period.
  • Common Procedural Terminology (CPT) modifier -25 identifies a significant, separately identifiable evaluation and management (E/M) service. It should be used when the E/M service is above and beyond the usual pre- and post- operative work of a procedure with a global fee period performed on the same day as the E/M service.
  • Different diagnoses are not required for reporting the E/M service on the same date as the procedure or other services with a global fee period. Modifier -25 is added to the E/M code on the claim.
  • Both the medically necessary E/M service and the procedure must be appropriately and sufficiently documented by the physician or qualified NPP in the patient’s medical record to support the need for Modifier -25 on the claim for these services, even though the documentation is not required to be submitted with the claim.
  • Your carrier will not retract payment for claims already paid or retroactively pay claims processed prior to the implementation of CR5025. But, they will adjust claims brought to their attention.
  • Carriers will not pay for an E/M service reported with a procedure having a global fee period unless CPT modifier -25 is appended to the E/M service to designate it as a significant and separately identifiable E/M service from the procedure. Such payment will be denied with the reason codes 97 (Payment is included in the allowance for another service/procedure) or remittance advice remark code M144 (Pre-/post-operative care payment is included in the allowance for the surgery/procedure)

Clinical scenarios:

The following clinical scenarios provide examples of when it is or is not appropriate to bill an E/M service with a minor procedure.

Example 1:
A 45-year-old male new patient is seen for assessment and management of shoulder pain. The physician completes an evaluation consisting of a detailed history and detailed examination. Radiographs of the shoulder are ordered and personally viewed. A working diagnosis of rotator cuff tendinitis is formulated.

The E/M service meets the criteria of a level 3 new patient (99203). Because the E/M work of the office visit is above and beyond that included in the procedure, the visit is considered separately reportable. The same diagnosis can be used for both the office visit and the procedure. It is strongly recommended that the documentation have a separate “procedure” report or paragraph for the injection. The procedure note should routinely include the specific elements of pre- and post-service detailed above.

Example 2:
A 52-year-old woman with knee pain returns to her surgeon 2 years following arthroscopic medial meniscetomy. The physician completes a detailed history and examination. The operative report and photographs are reviewed. The images from a recently performed MRI are viewed and compared to the official report. Plain radiographs of the knee are ordered and personally viewed. The diagnosis of knee arthritis is formulated.

The E/M service meets the criteria of a level 4 established patient (99214). Because the E/M work of the office visit is above and beyond that included in the procedure, the visit is considered separately reportable. Again, the same diagnosis can be used for both the office visit and the procedure; a separate “procedure” report or paragraph for the injection is recommended.

Example 3:
A 56-year-old female is seen for evaluation of knee and shoulder pain 18 months after the most recent visit. The physician completes an expanded, problem-focused history and examination. Radiographs of the knee and shoulder are ordered and viewed. The assessment and diagnoses are rotator cuff tendinitis and knee osteoarthritis.

The E/M service meets the criteria of a level 3 established patient (99213). The procedure is for the rotator cuff tendinitis, whereas the E/M visit is for both the rotator cuff tendinitis and knee arthritis. Because the E/M service is for a different diagnosis than the procedure, the office visit is considered separately reportable. The diagnosis for the E/M visit should be only knee osteoarthritis and the diagnosis for the injection procedure is rotator cuff tendinitis.

Understanding the correct use of modifier 25 and the required documentation is critical to avoiding problems and adjudicating inappropriate claim denials or underpayments. The key requirement of a “significant and separately identifiable” E/M service is that the work for the E/M service is substantially more and different than the typical preoperative and postoperative E/M work included in the minor procedure.

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