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Demystify Modifier 25

It’s no secret that the most widely misunderstood and misused modifier in Medical Billing and Coding is Modifier 25. I have worked in the Revenue cycle for 20 years, and even in this day and age with so much education and easy ways to access regulatory guidance, many still misunderstand its use.

Modifier 25: A significant, separately identifiable evaluation and management (E/M) service by the same physician or other qualified health care professional on the same day of the procedure or other service

The definition above is one of the more lengthy Modifier descriptions that exist and the first part of the confusion happens by overlooking the definition alone. The keywords are “Same Physician”, “Same Day”, “Significant”, Separately Identifiable”. The latter is my go-to when explaining the purpose of Modifier 25 at it’s core. It was created because every minor procedure carries an element of Evaluation and Management and would require something Identifiable outside of the procedure performed or “Significant”. CMS (Centers for Medicare and Medicaid Services) has provided very clear Documentation for us to review in order to understand how they interpret this Modifier, which is very important as many commercial payers identify that in their processing manual, they will follow CMS processing guidelines. See the following commercial payer guidelines “Same Day/Same Service Policy, Professional”

Even with these clear processing guidelines we still get many denials due to the difference in how their edits are set up to catch improper submissions. Even the most sophisticated edit systems cannot identify the correct use of Modifier 25 because the documentation tells more of the story than just the codes themselves. It is true that having different diagnosis codes for the Evaluation and Management service will make it easier for the claim to be paid without review but according to the National Correct Coding Initiative NCCI  CMS identifies that a separate diagnosis is not required to support the use of a Modifier 25. This manual also contains several examples to aid in interpreting different scenarios.

“The E&M service and minor surgical procedure do not require different diagnoses. If a minor surgical procedure is performed on a new patient, the same rules for reporting E&M services apply. The fact that the patient is “new” to the provider/supplier is not sufficient alone to justify reporting an E&M service on the same date of service as a minor surgical procedure. NCCI contains many, but not all, possible edits based on these principles.”


Modifier 25 in 2021 and Beyond

I get a lot of questions about Modifier 25 and how to capture an additional Evaluation and Management service with only MDM as your component. In this article, I will attempt to simplify the process and explain using my favorite tool, the AMA® MDM Table. In the simplest terms, our goal is to reconstruct our documentation without the elements that are included in the pre and post-work of a minor procedure. Remember that if the minor procedure carries a 0 or 10-day global that means we have to consider the normal part of providing an Evaluation and Management of that procedure is not separately reportable. Per the Global package by both CMS and AMA

Modifier “-25” indicates that the patient’s condition required a significant, separately identifiable E/M service beyond the usual pre-operative and post-operative care associated with the procedure or service.


“A 65-year-old woman with Left knee pain returns. Her last visit was over 1 year ago when she completed treatment for a torn meniscus. The patient had a recent x-ray performed. She has brought those images and reports. I have reviewed them and compared them to the report. The images show narrowing of the joint space The diagnosis of Osteoarthritis is given.

The patient is counseled about her condition and treatment options. A Prescription for 800mg of Ibuprofen is given and after a discussion of the risks and benefits, the patient agrees to intra-articular injection of local anesthetic and corticosteroid. “

This Represents a Level 4 based on the guidelines being applied

Even though the same diagnosis is given, the provider can “Carve out” an evaluation and Management service by satisfying the Data and Risk areas of MDM in 2021. The provider can review an outside test and interpret it, as well as perform prescription drug management. The same rules will apply when we level based on the two usable components. In this scenario, the Prescription falls under Level 4 and so does the requirement of 1 Category of Data found in the independent interpretation.

Let’s say though that a different scenario was presented for an injury and it requires that an MRI be ordered. In the data section, Category 2 would not suffice because it requires an interpretation, which cannot happen at this time. Category 1 requires more than 1 test, so we would be required to use the data level for minimal or none. We can still of course obtain a lower level, and additional reimbursement even though it’s not as high as level 4 in the last example. It will most likely still be worth it to the Physician to capture what they can in this limited scenario.

This Represents a Level 2 based on the guidelines being applied

Inappropriate and Unnecessary Use

Earlier I explained that the reason to add a 25 modifier was to show that a minor procedure, which carries a global concept is needed to show the separation of the usual pre and post-work of that procedure.

There are still many errors we are seeing in claim reviews that reveal improper use. One inappropriate application is when a service that does not have a global concept is performed such as a laboratory service or X-ray. It’s a misconception that just because two codes are on a claim that a 25 modifier needs to be added. This application has added to the overuse and abuse of Modifier 25, resulting in many audits and requests for previously paid claims be refunded to the payer for improper payment.

It may be necessary for some instances according to payer process rules but the majority of services that do not have a global concept performed at the time of an Evaluation and Management service should not have Modifier 25 attached. We can see this further clarified by reading the guidelines on the Global package detailing what is not included:

“Diagnostic tests and procedures, including diagnostic radiological procedures”

-CMS Global Surgery Booklet

The key to the proper assignment will be driven by your understanding of the Global Service guidelines, how each payer interprets them, and truly taking the time to dissect the documentation to carve out the separate service not included in the global procedure.

Get to know your specialty and the common tests performed as well as the insurance requirements for modifier usage. Good organization and research are required but it’s worth your time to get paid right the first time and decrease unnecessary waste in your organization.

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