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Protecting Modifier 25

by Linda Kossoff •

To outsiders, modifier 25 payment might seem a minor issue, something that occurs infrequently with little impact on physicians or their patients. However, they would be wrong, as Kevin Watson, MHA, chief executive officer of Raleigh Capitol Ear, Nose & Throat in N.C., can attest. The practice runs six locations throughout the state, and its staff includes 14 ENTs and nine audiologists. “Currently, one-third of our office visits are appended with the 25 modifier,” he said. “It’s most commonly applied when our physicians perform nasal endoscopy and cerumen removal.”

Ultimately, modifier 25 saves time and money for physicians and patients. “Appropriate reimbursement of modifier 25 allows providers to offer necessary, resource-intensive, and potentially unplanned care to their patients without feeling the need to schedule a separate visit,” said Dr. Manning. “It is imperative that physicians are appropriately reimbursed for providing the medically necessary services and additional costs incurred from the time and care provided in these scenarios.”

Pattern of Pushback

It sounds like a cut-and-dried argument: Modifier 25 is appropriate for instances in which there is additional work performed and additional resources used for a separately identified E/M service with the same physician on the same day of the procedure. However, some payers have asserted an opposing point of view. In the instance of Blue Shield of California, for example, the insurer claims that its 50% payment reduction policy is to avoid reimbursing for the practice expense twice.

When properly applied and submitted, however, modifier 25 billing is not duplicative. Moreover, as explained in a 2023 AMA Council on Medical Service report presented at that year’s annual AMA 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.”

As it stands now, private payers vary in their interpretation of modifier 25. Dr. Manning identifies three “paradigms” that represent the majority of claims:

  1. The carrier recognizes and pays for the proper utilization of the 25 modifier.
  2. The carrier does not accept the use of the modifier in any circumstance. Watson reports that at Raleigh Capitol, although the majority of government-funded and private payers reimburse for the both the visit and procedure when the 25 modifier is appended, “A significant number of these claims are initially denied, either in full or partially, requiring the practice to submit appeals, which consumes resources.”
  3. The carrier acknowledges appropriate use of the modifier but values the respective codes at only 50% of their normal value. An example would be the payer that automatically reduces payment for the second code to account for what it perceives to be overlap of the two codes. “These are the private payers that say, ‘We will accept the 25 modifier, but we’re only going to give you half of what you’re supposed to get,’” said Dr. Manes. “This just raises the same issue. There is no duplication of work. My colleagues and I work on valuation of these codes for not just hours, but days and weeks, to make sure we get these correct. For a private carrier to come in and say, ‘Well, no, it’s only half,’ is really an insult to the rigorous system that we must use to establish valuation. It’s very disrespectful.”