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Master modifier -25 use

HIM-HIPAA Insider, March 29, 2005

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Modifier -25 (significant, separately identifiable E/M service) accounted for $1.7 billion of E/M charges billed to Medicare, causing the OIG to include this in its 2005 Work Plan.

Editing software rejects claims that include procedure charges with E/M levels. But modifier -25 bypasses those edits, allowing facilities to receive payment for those claims and overstep the true intent of the modifier-to provide payment for hospitals that legitimately supply a significant, separately identifiable E/M service in addition to the procedure.

Too many hospitals bypass the edit by appending modifier -25 inappropriately, says Keith Siddel, MBA, PhD (c), president and CEO of HRM, a national healthcare financial service organization in Creede, CO.

"Providers are saying, '[Because] most of the time you need it, it becomes easier to add it to every claim and remove it when it's not needed,' " Siddel says. This has become standard practice over time.

Hospitals that report modifier -25 all the time are the most likely targets of an OIG audit, "but everybody should look at the way modifier -25 is being applied," Siddel says. Follow these tips to ensure appropriate use:

• Verify that your coders apply modifier -25 based on the patient's reason for requesting services, not just to process the claim through editing software.
• Revamp and redesign processes that allow the assignment of modifier -25 only to receive a claim payment. Stop automatically hardcoding it to every claim and remove it from your chargemaster.
• Append the modifier just as you would every other modifier, "based on the medical record documentation, which should support the reason the patient requested services," Siddel says.

Don't overreact and stop using modifier -25 altogether, he adds. It is designed for regular use, on perhaps as many as half of all submitted claims.

This excerpt is adapted from Briefings on APCs.

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