Don't think the Office of Inspector General (OIG) has lost interest in modifier 25.

Hardly. The OIG plans to continue monitoring claims for use of this particular modifier due to a reputation that raises a red flag. The modifier identifies a separate service for billing so its presence in claims naturally attracts OIG attention, especially when claims in which it was used has resulted in millions of dollars in improper payments.

In 2001, according to the 2006 OIG work plan, Medicare allowed over $23 billion for evaluation and management services. Of that amount, approximately $1.7 billion was for evaluation and management services billed with modifier 25.

Modifier 25 appended to a CPT code distinguishes services provided by the same physician on the same day of service; it shows the evaluation and management work provided and reported separately went above and beyond the work normally associated with a preventive medicine or minor surgical procedure.

The use of the modifier is not confined to the physician's office. The introduction of the outpatient prospective payment system in 2000 brought the use of the modifier to outpatient claims for acute care facilities. Emergency departments in the hospital setting show a high volume use of the code, as do hospital-based clinics, treatment rooms, and other areas in which physicians evaluate patients.

Suspicious Behavior
The use of modifier 25 has raised eyebrows since its inception. The Centers for Medicare and Medicaid Services (CMS) through its carrier and intermediaries has never fully explained - or clarified - the use of the modifier and Medicare has a history of not allowing additional payment when it is reported. Physicians have responded in black or white, and the extreme. They have either used it or not or, in the extreme, asked patients to come back the same day for the service separate from the original reason for the patient encounter.

So, what else was the OIG to do but investigate? Their methods and results have been widely circulated.

The Study
The OIG conducted an audit of modifier 25 in November 2005. The agency randomly selected a sample of 450 claims billed in 2002 - all containing modifier 25 - and asked for the medical records associated with the claims. Certified coding professionals were contracted to review the claims to determine whether the use of modifier 25 met program requirements. The OIG also interviewed CMS central and regional offices and carrier staff to determine their level of understanding, outreach, and oversight of the modifier.

Study Findings
According to their review, 35 percent of the claims Medicare reimbursed for the separately identified service did not meet programs requirements, resulting in $538 million in improper payments. The findings did not necessarily point fingers. The misuse was a matter of medical record documentation failing to support the use of the modifier for the service.

According to the OIG semi-annual report to Congress (October 1, 2005 to March 31, 2006):

• Modifier 25 was used unnecessarily on a large number of claims and although such use may not have led to improper payments, the claims failed to meet program requirements.
• Modifier 25 boiled down to a basic issue of communication: the use of the modifier did not meet program requirements and carriers were not making it a priority.

Study Recommendations
The OIG is made several recommendations to CMS based on their findings, and, as stated in the semi-annual report to Congress:

• OIG recommended that CMS work with Medicare carriers to reduce the number of claims submitted using modifier 25 that do not meet program requirements.
• OIG also recommended that CMS stress to providers that they must maintain appropriate documentation of both the E/M services and procedures and remind them that modifier 25 should be used only on claims for E/M services.

CMS concurred with OIG's recommendations, and their efforts at education include reinforcing the requirements that E/M services billed with modifier 25 are "significant, separately identifiable and "above and beyond the usual preoperative and postoperative care associated with the procedure." CMS is also trying to clarify its use by emphasizing where it's appended (on line items on claims for E/M services, and only when these services are provided on the same day as another procedure). Finally, the CMS is making the modifier a priority among educational efforts. CMS stated it would modify the Medical Claims Processing Manual and clarify that the appropriate documentation must be maintained to support claims reimbursements. 

So... When and How do I Use it?
The physician may need to indicate that on the day a procedure or service identified by a CPT code was performed, the patient's condition required a significant, separately identifiable E/M service above and beyond the other service provided or beyond the usual preoperative and postoperative care associated with the procedure that was performed.  The E/M service may be prompted by the symptom or condition for which the procedure and/or service was provided.  As such, different diagnoses are not required for reporting the E/M services on the same date.  This may be reported by addition modifier 25 to the appropriate level of E/M service.
 
Using the Modifier Correctly

• Use modifier 25 when the E/M service is separate from that required for the procedure and a clearly documented, distinct and significant identifiable service was rendered.  Although CPT does not limit this modifier to use only with a specific type of procedure or service, many third-party payers will not accept modifier 25 on an E/M service when billed with a minor procedure on the same day. 
• When using 25 on an initial hospital visit, an initial inpatient consultation, the E/M service must have the key elements (history, examination, and medical decision making) well-documented. 
• Use modifier 25 when preoperative critical care codes are billed within a global surgical period. 
• Use modifier 25 on an E/M service when performed at the same session as a preventative care visit when a significant, separately identifiable service is performed in addition to preventative care.  The E/M service must be carried out for a nonpreventive clinical reason, and the ICD-9-CM code(s) should clearly indicate the nonpreventive nature of the E/M service.
• Attach modifier 25 to the E/M code representing a significant, separately identifiable service performed on the same day as routine foot care.  The visit must be medically necessary.

Incorrect Use of the Modifier

• Using modifier 25 to report an E/M service that resulted in the decision to perform a major surgery (see modifier 57).
• Billing an E/M service with modifier 25 when a physician performs ventilation management in addition to an E/M service.
• Using modifier 25 on an E/M service performed on a different day than the procedure.  For example, a surgeon sees a patient in his office to followup an abnormal mammogram.  After discussing the findings with the patient, he schedules and performs a breast biopsy the next day.  It would be incorrect to add modifier 25 to the E/M code. 
• Using modifier 25 on a surgical code since this modifier is used to explain the special circumstances of providing the E/M service on the same day as a procedure.
• Using modifier 25 on the office visit E/M level of service code when on the same day a minor procedure (e.g., an endometrial biopsy was performed, when the patient's trip to the office was explicitly for the minor procedure (e.g., biopsy).

Coding Tips

• Use modifier 25 to indicate that on the day of a procedure or other service indentified by a CPT code, the patient's condition required a separate, identifiable E/M service above and beyond the other service provided or beyond the usual preoperative and postoperative care associated with the procedure that was performed.
• Medicare will allow separate payment for two office visits provided on the same date, by the same physician, when each visit is rendered for an unrelated problem.  Both visits must occur at different times of the day and both visits must be medically necessary.  This particular circumstance is considered rate, and requires modifier 25 to be appended to the second visit.
• There is a difference between CPT codebook definition and the instructions from Medicare.  Medicare guidelines instruct coders to use modifier 25 if the decision for surgery is made on the same day as a minor surgery (i.e., in those with a zero to 10-day follow-up period) or diagnostic procedure.  The 57 modifier would be added to the appropriate level of E/M when the initial decision to perform major surgery (i.e., those with a 90-day follow-up period) is made during an E/M service the day before or the day of surgery). 

Clinical Example
Example:
A patient is seen for re-evaluation of chronic refractory hypertension.  The physician performs a detailed history and physical examination and medical decision making of moderate complexity.  During this encounter, the patient states that he is having trouble hearing.  The physician examines the patient's ears and discovers that the right ear is blocked with cerumen.  After irrigation and removal of wax plug, the patient is able to hear better.  The patient's hypertension will be treated with a new medication and a re-evaluation is scheduled for one month. 

In order to ensure payment of all services, the ICD-9-CM codes must be linked to the CPT codes properly.  The hypertension code (401.9) would be linked to the E/M visit and the ear irrigation procedure would be linked to the code for impacted cerumen (380.4).  Submit CPT codes 99214-25 and 69210. 

What's Ahead
CMS plans to continue to scrutinize the use of modifier 25, in addition to any E/M service billed on the same date as a procedure. Their direction will come from the OIG and its keen interest in providing only those services that meet the demands of documentation requirements of medical necessity.

Darlene Boschert, BS, CPC, CPC-H, CMA, CMT
Over 20 years and is a Certified Professional Coder, Certified Procedural Coder - Hospital, Certified Medical Transcriptionist, Certified HIPAA Compliance Officer and Certified in Healthcare Privacy. She can be reached via email at darlenecpc@tampabay.rr.com