Journal of Dermatology for Physician Assistants

The official journal of the Society of Dermatology Physician Assistants

The Saga of the Modifier 25

By Jaci J. Kipreos, CPC, CPMA, CDEO, CEMC, COC, CPCI

Jaci J. Kipreos, CPC, CPMA, CDEO, CEMC, COC, CPCI, has been working in the field of medical coding and auditing for over 30 years. She has been a Certified Professional Coder (CPC) since 1994, attained her Certified Outpatient Coder (COC) for facility-based coding in 2005, and is a Certified Professional Medical Auditor specializing in Evaluation and Management (E/M) Coding. She has expertise in coding for family practice, urgent care, obstetrics and gynecology, general surgery, and Medicare’s Teaching Physician Guidelines, with a particular emphasis on E/M guideline compliance. She has served on the American Academy of Professional Coders (AAPC) National Advisory Board and is past president of AAPC’s Richmond and Charlottesville, Virginia, local chapters. Kipreos is president of Practice Integrity, LLC, where she manages a national client list and provides compliance monitoring for provider documentation. She currently resides in San Diego, California.

Disclosures: The author has disclosed no potential conflicts of interest, financial or otherwise, relating to the content of this article.

Welcome to Compliance Corner, a new department dedicated to providing information and tools to help keep your healthcare documentation for coding and billing compliant. This new resource aims to help you navigate recent changes to Current Procedural Terminology® (CPT®) Evaluation and Management (E/M) guidelines for office visits, which became effective January 1, 2021. Written by the American Medical Association (AMA), these guidelines contain new methodology and new definitions, both of which affect the way you as providers document the account of the patient visit.

As is often the case with significant change, attempts to comprehend and adapt to new guidelines has set off a chain reaction of follow-up questions. Here, we will provide clinical examples to assist in the explanation of these new requirements to support the different levels of service of CPT office visit codes. We will also feature YOUR questions on all compliance-related topics along with answers that walk you through the rationale for each response. Compliance Corner will contain a selection Q&As from you, the readership. If you have a scenario or question, we encourage you to send it to for review.

I’m excited to bring you the second installment of Compliance Corner in which we will discuss what I believe to be one of the hottest topics surrounding coding—the Modifier 25.

There has been so much hype around this one single modifier that one would think it is associated with high-dollar scenarios, however it is often not associated with big ticket items. So, why all the hype? Why all this attention placed on one little modifier?

To explain the hype, we need to look at this topic from some different perspectives. First, we need to consider what the AMA had in mind when the modifier was created. We must also consider what payers expect from this modifier and what it means to potential payments. Then, we have to consider regulations and policy and documentation.

The Intent of the Modifier – The AMA Perspective
Let’s begin with defining the purpose of the CPT manual. The AMA created CPT as a way to conveniently relay information to insurance carriers. The CPT manual is just a description of work. The code descriptions and information do not guarantee payment. The intent is to just describe work.

Modifiers were created by the AMA to assist in describing situations where there is a possibility of nonpayment because the coding would appear to describe a scenario that would not fall into the “typical” scenario. Realistically speaking, once a claim for services reflects more than one CPT code, there is a consideration of whether a modifier is needed. An office visit reported with a lab or an x-ray would not normally necessitate the need for a modifier; however, try to report an office visit and a minor procedure together without a modifier and chances are the claim may be denied or one of those charges will not be paid. The Modifier 25 was created to address this exact scenario. The CPT manual describes the Modifier 25 as a way to convey to a payer that the work involved in the office visit was separate from the work performed in the procedure. Here is an excerpt from the CPT manual on Modifier 25:

Modifier 25
Significant, Separately Identifiable Evaluation and Management Service by the Same Physician or Other Qualified Health Care Professional on the Same Day of the Procedure or Other Service. It may be necessary 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. A significant separately identifiable E/M service is defined or substantiated by documentation that satisfies the relevant criteria for the respective E/M service to be reported. The 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 of the E/M services on the same date. This circumstance may be reported by adding modifier 25 to the appropriate level of E/M service.

Note: this modifier is not used to report a service that resulted in a decision to perform surgery. See modifier 57.

This description by the AMA provides an overview, yet it does still leave some openings based on interpretation. Phrasing such as “significant separately identifiable” leaves some room for interpretation. For example, one might question what is meant by “usual preoperative and postoperative.” Every surgical CPT code that is reported includes in its value the work of the associated preoperative and postoperative services.

Pre-work is considered site assessment, decision to perform the procedure, informed consent, obtaining information about allergies, obtaining information about immunization status, if relevant.

Post-work includes post procedural instructions.

Note that the separate evaluation of a condition is NOT included. The definition of the modifier indicates that the medical documentation should clearly show that the E/M service performed was unique and distinct from the usual preoperative and postoperative care associated with the primary procedure performed on the same date of service. The definition indicates that the patient’s condition required this additional work beyond the typical pre- and post-operative care provided.

What Do Payers Want?
This is where the definition begins to get a bit confusing. Various commercial payers may have their own policies based on their interpretation of the modifier. Always check in with your billing department to understand the policies of commercial plans.

For the purposes of this article, it is best to address how Medicare interprets this modifier and what the documentation should reflect. The Centers for Medicare and Medicaid Services (CMS) provides manuals that describe how to use the modifiers and instructs their contracted payers how to reimburse if the modifier is submitted appended to an E/M code.

The Medicare Claims Processing Manual Chapter 12 indicates the following instructions concerning payment for minor procedures when reported with an E/M service:

40.1.C. Minor Surgeries and Endoscopies.
Visits by the same physician on the same day as a minor surgery or endoscopy are included in the payment for the procedure, unless a significant, separately identifiable service is also performed. For example, a visit on the same day could be properly billed in addition to suturing a scalp wound if a full neurological examination is made for a patient with head trauma. Billing for a visit would not be appropriate if the physician only identified the need for sutures and confirmed allergy and immunization status.

Medicare contracts with other payers to handle the Medicare claims submitted in various geographical regions. These contractors, known as Medicare Administrative Contractors or MACs, also provide instructions for payment. See Table 2 for examples of MACs and their guidelines on billing with Modifier 25.

Who Else Cares?
This modifier has caused so much attention from payers and providers that the Office of Inspector General (OIG) has decided to get involved. The OIG has as one of its goals to fight fraud, waste, and abuse. The OIG establishes and publishes a Work Plan that outlines areas of interest that will be under investigation to determine if services rendered were actually performed and if payment should have been made. The Work Plan is an ongoing list of areas of concern that is continually updated on the OIG website ( The OIG investigates payments associated with Medicare and Medicaid. Commercial payers will often perform investigations based on the OIG Work Plan.

This year, the OIG added the following item (see Table 1) to their Work Plan:

The OIG described their reasoning as follows:
Medicare covers an Evaluation and Management (E/M) service when the service is reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member. Generally, Medicare payments for global surgery procedures include payments for necessary preoperative and postoperative services related to surgery when furnished by a surgeon. Medicare global surgery rules define the rules for reporting E/M services with minor surgery and other procedures covered by these rules. In general, E/M services provided on the same day of service as a minor surgical procedure are included in the payment for the procedure. The decision to perform a minor surgical procedure is included in the payment for a minor surgical procedure and must not be reported separately as an E/M service.

An E/M service should be billed only on the same day if a surgeon performs a significant and separately identifiable E/M service that is unrelated to the decision to perform a minor surgical procedure. In this instance, the provider should append a modifier 25 to the appropriate E/M code. In 2019, about 56 percent of dermatologists’ claims with an E/M service also included minor surgical procedures (e.g., lesion removals, destructions, and biopsies) on the same day. This may indicate abuse whereby the provider used modifier 25 to bill Medicare for a significant and separately identifiable E/M service when only a minor surgical procedure and related preoperative and postoperative services are supported by the beneficiary’s medical record. We will determine whether dermatologists’ claims for E/M services on the same day of service as a minor surgical procedure complied with Medicare requirements.

Reviewing these few examples, it is easy to understand the confusion in proper use and correct documentation to support the need for this modifier. The policies presented by payers are not specialty specific and that can create confusion on how to relate to the examples. The documentation must reflect work that is above and beyond just making the decision to perform the minor procedure. The documentation needs to reflect additional work and decisions concerning the condition or conditions. The most typical scenario in dermatology will be the established patient who presents with a lesion and the decision is made to biopsy or destroy. Does the documentation reflect that the whole encounter was spent determining the need to perform the procedure? Or does the documentation reflect that the decision-making extended to counseling about the condition and explaining the nature of the condition? This is what a payer would want to read to consider payment for the visit and the procedure.

This has been a hot topic for many years and now that the OIG is involved, the stakes are even higher. Modifiers and coding which are a part of the business side of healthcare is a team effort. Communicate with your coders and billers. Ask questions about the different payer policies. This issue of the Modifier 25 definitely has the potential to impact the bottom line of the business. However, the ultimate questions to help guide coding compliance with Modifier 25 are as follows:

1. Did you document to support the need for an additional service?
2. Was the work involved in the office visit beyond the typical preoperative work and postoperative work, and was it more than a work-up to determine the need for the procedure?

In conclusion, the best defense is a good offense.  Talk with your support team to determine specific payer policies that are unique to your geographic area. When documenting the events of the encounter, consider if the amount of work performed goes beyond the definition of “typical” pre-work and post-work of the procedure. Ask your team if your visits with a 25 modifier are being reimbursed. Lastly, always ask questions and be involved.


1. American Medical Association. AMA CPT® Professional 2021. September 2020; American Medical Association: Chicago, Illinois.
2. Centers for Medicare & Medicaid Services (CMS). Medicare Claims Processing Manual Chapter 12, Section 40.1.C. U.S. Dept. of Health & Human Services Guidance Portal. November 01, 2019. https://www.hhs. gov/guidance/document/medicare-claims-processing-manual-chapter-12-physiciansnonphysician-practitioners. Accessed July 1, 2021.
3. U.S. Department of Health and Human Services. Office of the Inspector General. Dermatologist Claims for Evaluation and Management Services on the Same Day as Minor Surgical Procedures. Accessed July 1, 2021.
4. Novitas Solutions, Inc. Modifier 25 Tip Sheet. https://www.novitas-solutions. com/webcenter/portal/MedicareJH/pagebyid?contentId=00097341. Accessed July 1, 2021.
5. Noridian Jurisdiction E. Modifier 25. Accessed July 1, 2021.
6. Palmetto GBA Jurisdiction JM. CPT Modifier 25. https://www.palmettogba. com/palmetto/jmb.nsf/DIDC/8EELF54813~Claims~Modifier%20Lookup. Accessed July 1, 2021.

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