Modifier 25 abuse proves costly

Many medical practices are now receiving letters from Cigna on their intent to review all claims with Evaluation and Management services reported with 99212-99215 for established patient services.

This will create unnecessary burden on practices and delay payments. Could this action have been avoided? In a word yes. Since the induction of Modifier 25 it has been abused, overused and generally applied incorrectly.

In 2005 the OIG performed an audit of services performed in 2002 where modifier 25 was attached. Thirty-five percent of claims with modifier 25 appended that were paid by Medicare did not meet the requirements, which resulted in $538 million in incorrect payments.

In this audit it was advised that physicians receive education to avoid these errors. Nothing had changed in these practices and since many payers follow CMS they are responding to that advice.

While these actions are seen as extreme by many in the healthcare business offices, those of us who have performed external audits and have been advising physicians since the OIG audit are not surprised that insurance companies are resorting to these tactics. These tactics are not in the best interest of the patients. There are better ways to ensure accuracy and holding hostage payments that ethical and honest practitioners need is very concerning.

While they perform these reviews, Cigna will need to ensure qualified, reviewers are involved who understand the specialty they are reviewing and documentation standards, guidelines and additional factors needed to justify modifier 25.

Modifier 25 and Established Visits

In order to appeal and stay on top of these reviews in your practice, it is recommended that you be aware of the reason a modifier 25 might be needed with codes 99211-99215.

When you review the PTP edit files, you will identify that only established patient visits require a 25 modifier, while new patients do not. If you happen to review the audit performed in the OIG audit mentioned previously, you will find that it identified instances where modifier 25 was used incorrectly such as with new patient visits or services such as pathology, laboratory, and diagnostic services. These services do not require the use of modifier 25 as they do not include elements of evaluation and management that other services do.

By using modifier 25 every time a procedure or service is done, practices indicate that they do not understand how to use it and insurance companies need to investigate all services to identify when it’s warranted to pay. We should all be concerned and awakened to the need for internal and external audits that will ensure we are above reproach and have appeal rights.

Every practice should do all they can to fight this policy. As you identify how this will impact your practice, please contact for assistance for a full financial review and impact.

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