Modifier 25: A key focus of Medicare audits

Cracking the Code

Dirk Elston

Dr. Elston, who serves as director of the Ackerman Academy of Dermatopathology in New York, has served on the AMA-CPT Advisory Committee.

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The Office of the Inspector General reported that 35 percent of audited claims using modifier 25 in 2002 were inappropriate, resulting in $538 million in improper payments. Because of this, modifier 25 has become a key focus of audits.

When used appropriately, modifier 25 prevents inappropriate bundling of separately identifiable evaluation and management (E/M) services provided along with a procedure on the same day of service. If the modifier were not appended, the carrier software would prevent separate payment.

It is important to understand that significant cognitive work is already calculated in the value of procedural codes. For example, code 11643 (excision, malignant lesion, face) already includes the following typical pre- and postoperative services:

  • explanation of the benefits, risks, and alternatives;
  • explanation of the procedure and the healing period;
  • a fresh history of medications and allergies and a review of pertinent problems that may have arisen since the last visit;
  • discussion of sun protection, wound care, restrictions, and complications; and
  • prescriptions for pain and antibiotics.[pagebreak]

Medicare specifies that the decision to perform a zero or 10 global day procedure is not sufficient justification for use of modifier 25. The documentation for the E/M service must include the key elements (history, examination, and/or medical decision making) required for the selected code, and none of the components required to document the E/M service may also support the performance of the procedure itself. Note that it is not necessary to have a different diagnosis from the diagnosis that supported the needed procedure, but it is necessary that there be medical necessity to perform the separate E/M service and that the services provided go beyond the normal preoperative work that is a part of every procedure.

Your documentation must clearly demonstrate that:

  • The purpose of the visit was other than evaluating and/or obtaining information needed to perform the procedure.
  • The purpose of the separate E/M service relates to a specific complaint.
  • The complaint or problem justified a separate billable service, and the services were performed.
  • You performed extra work above and beyond the typical work associated with the procedure code.

Appropriate use of modifier 25:

A patient sees you for a changing mole on her leg. During the examination, she also asks about an eczematous rash on her arm. The symptoms have been worsening and she has been unable to sleep at night due to the itching. The lesion on the leg is removed and you evaluate and write a prescription for the rash. Modifier 25 should be appended to prevent inappropriate bundling of the separate E/M services.

Inappropriate use of modifier 25:

An established patient is seen in the office for debridement of mycotic nails. The patient is also given a refill of a topical cream to treat associated tinea. As the tinea was inherently part of the course of the evaluation, it would not constitute a significant and separately identifiable E/M service beyond the usual perioperative care associated with nail debridement. A separate E/M service should not be reported, and modifier 25 should not be appended.