State Corner: Anthem Delays, Amends Controversial Modifier-25 Policy
Modifier-25 is used to denote significant, separately identifiable evaluation and management (E&M) services by the same physician on the same day of the procedure or other service. In August 2017, Anthem released a policy that would cut, by 50 percent, evaluation and management (E&M) services billed with modifier-25 when reported with a minor surgical procedure code or a preventive/wellness exam. Since then, many state orthopaedic societies have contacted Anthem to request they reconsider. In December 2017, the California Orthopaedic Association (COA) and the American Medical Association (AMA) received word that Anthem will delay the cut until March 2018 and amend the new policy to a 25-percent reduction when modifier-25 is used.1
By facilitating the provision of unscheduled, medically necessary care, modifier-25 supports prompt diagnosis and streamlined treatment—which in turn promotes efficient, high-quality, and patient-centric care. The proper use of modifier-25 has been raised multiple times in the last decade. In 2005, the HHS Office of the Inspector General (OIG) published an analysis showing that 35 percent of Medicare claims for modifier-25 did not meet Medicare program requirements. Since then, CMS and private payors have increased their scrutiny of codes reported with this modifier, sometimes resulting in significant repayment to Medicare. For example, in 2016, the U.S. Attorney’s Office for the Middle District of Florida reached a settlement with an orthopaedic practice to pay $4.5 million to settle claims that they violated the False Claims Act by billing Medicare for E&M services that were prohibited under Medicare rules.
The COA continues to work with Anthem California to indefinitely delay the implementation of the new policy so that both organizations can study the issue. COA is arguing that the reduction will not ultimately result in savings – that the change could cost Anthem more money in administrative utilization review costs, in providers billing additional E&M visits, unhappy patients and employers, and providers leaving their network due to these onerous billing rules. Anthem leadership is still considering our request. In exchange COA is offering to work with Anthem on an educational effort for orthopaedic surgeons on the proper use of modifier-25.
Understanding the correct use of this modifier and the required documentation is key to avoiding problems and adjudicating inappropriate claim denials or underpayments. The below article reviews the current rules and guidelines and provides clinical scenarios as examples. It is the opinion of the AAOS that the Medicare rules and payment policies regarding modifier-25 should be followed by all third-party sponsors.