Payers should pay particular attention to physician claims utilizing modifier 25 because this modifier is commonly misused and results in a high claim denial rate. The technical definition for modifier 25 is a 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. This modifier is used on the Evaluation and Management (E/M) code when there are other services performed on the same day that are unrelated. The other services may be a preventive medicine service or a minor surgical procedure (a procedure that has zero to ten global days in the CMS Physician Fee Schedule).

The reason for the 25 modifier is to report E/M care that is unrelated to another service, because minor procedures include pre-procedure, intra-procedure, and post-procedure work inherent in the procedure. When a separate E/M is warranted, the diagnosis code is usually, but not always, different than the diagnosis code for the other service. When supported by the documentation, a 25 modifier is present on the E/M code only, not on the minor procedure or the preventive service.

Medicare has analyzed the significant denial rate of claims with modifier 25, and, according to Part B News in their analysis of the Medicare claims data, the 15 most denied CPT/HCPCS codes then reported with modifier 25 are:

Payers can use this information, as well as their own statistical data to isolate those E/M codes that are most likely to be inaccurate, and use this information to avoid potential reimbursement issues. Supporting documentation can be requested on a pre-adjudication basis so that suspicious claims can be investigated and denied, if necessary, prior to payment being made.

Read another FWA Brief about modifiers: Tips to Modify Your Modifier Usage: Bundling & Unbundling Compliance