Modifier 25, the Itch that Keeps Needing a Scratching

May 26, 2023

Within the past few weeks, we have seen at least two of the large payors seek to institute policies that would require providers to submit their medical records when an Evaluation and Management (E&M) is appended with Modifier 25.  While not having a discussion on either E&M code(s) and the use of Modifier 25, it is important to understand from both sides, the implications of such policies.

We know from published reports, CMS has identified an error rate of over 8% for level 4 E&M codes (2017-2018 period).  While for many of us, that is not a significant percentage, in the CMS world, that error rate can amount to very large dollars paid out inappropriately.  We also know that Modifier 25 is often used to circumvent NCCI and MUE edits established by CMS, and adopted by most, if not all, payors.  Why adopt these payment policies?  For a payor, it prevents them from the expense of reinventing the wheel, and more importantly, many payors offer a Medicare Advantage or supplemental insurance plan.  These plans are required to follow CMS guidance on payment, so the use of such edits is in line with what is needed to be compliant with CMS policies. 

That being said, payors are working very hard to limit and create an atmosphere where behavior change will be made one way or another.  Last week, we here at Advize discussed Targeted Probe and Education (TPE) as a behavior modification tool.  The requirement of having providers submit their documentation in what appears to be Draconian ways (fax only, for example) is clearly a behavior modification tool.  Sociologists have studied the use of behavior modification for years, and many of the sociological and criminology theories of behavior modification certainly apply here.  I am sure many out there will discuss, argue, and pontificate that there are better ways to change behavior, and forcing a provider to submit their records via fax (does anyone even have a fax any longer?) is probably the most abrasive way to do that. 

From a provider perspective, provider abrasion is a real thing.  When I was an OIG Agent, I am not sure if I ever heard that phrase; bad providers needed to be adjudicated as bad providers, one way or another.  In my life at Advize, that phrase is a real thing.  Forcing providers who are actually rendering quality care, providing services to their patients, and are otherwise meeting their contractual obligations under the terms and conditions for payment, certainly do not want to spend the added time copying, faxing and accounting for the additional time and effort needed to ensure a payment is made for an item, service or procedure that is documented and properly coded.  Many providers are likely rethinking their participation agreements, and are probably thinking of moving out of network, becoming a VIP or concierge provider, or some hybrid, just to not have to deal with these requirements to ensure payment.  It is surely a slippery slope. 

The real question and challenge is, how does a payor balance the need to appropriately pay for an item, service or procedure, while maintaining a positive relationship with the provider network? While rhetorical in nature, it certainly has sparked a great amount of discussion and controversy.  Two large commercial payors sought to establish policies on this issue, and both either delayed implementation, or retracted the going forward implementation of the policy.  I have absolutely no idea what was behind the decisions to retract or delay the policy, but it is clear from published reports, social media and the like, the provider abrasion was real and would have a resonating effect on the care of patients, which is already in the balance.  Providers are spending less and less time with patients, care is being delayed due to the increasing volume of patients and the additional administrative burdens of having to fax potentially dozens of pages of records for dozens of patients would surely trigger a mutiny. 

We are going to continue to closely monitor these developments, as I am sure all of you in the FWA, auditing and coding world will; always remember that the best course of action is to ensure that you are setting a proper tempo of proactive compliance.  The OIG has many tools available for providers to understand that landscape.  The easiest one in our opinion is to set a cadence of proactive third-party audits to ensure proper compliance with billing and coding requirements.  By doing this, you ensure that when any policy is enacted, or any audit is conducted, you know where you stand, good or bad.

Eric Rubenstein

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