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Sometimes a technical Medicare payment proposal can have broader implications for physician practices and patient care. One such issue in the proposed 2027 Medicare Physician Fee Schedule involves Modifier 25, and MedChi is working with the American Medical Association and members of Congress to make sure the physician perspective is considered as CMS reviews the proposal.
Modifier 25 is used when a physician provides a significant, separately identifiable evaluation and management, or E/M, service on the same day as another procedure or service. Its purpose is to distinguish work that is separate from the services already included in the procedure.
CMS has proposed reducing payment when certain E/M services and procedures are furnished on the same day. Under the proposal, the highest-valued service would generally be paid in full, while payment for the additional applicable service would be reduced.
CMS has explained that the proposal is intended to recognize possible efficiencies when multiple services are performed during the same encounter and to avoid paying twice for overlapping work.
That is a reasonable policy objective. Medicare has an obligation to ensure that taxpayer dollars are spent appropriately and that payment reflects the actual resources required to furnish care.
At the same time, the proposal raises questions that MedChi and the AMA believe deserve further consideration.
The Physician Perspective
The concern is that Modifier 25 is specifically intended to identify circumstances in which the E/M service is significant and separately identifiable from the procedure being performed.
There may certainly be individual services where efficiencies or overlapping work exist. However, physicians and medical societies have questioned whether an across-the-board reduction is the best way to address those situations.
The AMA and other organizations have suggested that CMS examine the evidence for duplication more closely and, where appropriate, review individual services through the established process for evaluating potentially misvalued codes.
MedChi has joined the AMA and other state and national medical organizations in submitting comments to CMS on the proposal.
Our goal is not to suggest that every service billed with Modifier 25 should automatically receive full payment. Appropriate coding, documentation, and program integrity remain important. Rather, we believe CMS should make certain that any payment adjustment accurately reflects the work involved and does not inadvertently undervalue legitimate, separately identifiable medical services.
Congress Is Also Engaged
Members of Congress with medical backgrounds are also examining the issue.
The Congressional Doctors Caucus has raised concerns about the proposed Modifier 25 policy, and Maryland Congressman Andy Harris, M.D. joined the caucus letter addressing the proposal.
Having physicians serving in Congress participate in these discussions can be particularly valuable. They understand both the responsibility of Medicare to manage public resources carefully and the realities of providing care in physician practices.
The congressional letter adds another perspective for CMS to consider as it reviews comments and prepares the final Medicare Physician Fee Schedule.
Looking at the Impact on Patients
Another issue that deserves consideration is whether payment policy could influence how and when care is delivered.
There are circumstances in which it is clinically appropriate and convenient for a patient to receive both an evaluation and a procedure during the same visit. For some patients, especially those who travel long distances, rely on family members for transportation, or have difficulty scheduling multiple appointments, receiving appropriate care during one visit can be beneficial.
At the same time, Medicare must make sure that separate payment is made only when separate work has actually been performed.
Finding the right balance between those two objectives is the challenge.
There are also questions about how the proposal could affect smaller and independent physician practices. These practices directly bear the costs of staff, supplies, equipment, rent, and other expenses associated with furnishing services. CMS should carefully evaluate whether the proposed payment methodology appropriately reflects those costs.
Continuing the Conversation
The Medicare Physician Fee Schedule is one of the most important annual federal regulations affecting physician practices and the comment process exists so that CMS can receive input before finalizing its policies.
The AMA is actively engaged in that process. MedChi has joined the broader physician community in providing input and members of Congress, including Representative Harris, are also weighing in.
MedChi will continue working with the AMA, CMS, and Maryland’s congressional delegation as the proposal moves forward.
The objective should be a Medicare payment system that accomplishes both goals: protecting the integrity of the Medicare program while fairly recognizing necessary and separately identifiable physician services.
Getting that balance right is important for physicians, Medicare, and, most importantly, the patients we serve.
Gene M. Ransom III
CEO
MedChi, The Maryland State Medical Society
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