PAMED Calls for Retroactive Delay of IBC’s Modifier 25 Payment Policy

Last Updated: Oct 2, 2017

The Pennsylvania Medical Society (PAMED) continues to advocate for physicians in strong opposition to Independence Blue Cross' (IBC) modifier 25 payment policy, calling for IBC to retroactively delay the policy which took effect on Aug. 1, 2017.

In October 2017, PAMED a letter to IBC, sharing concerns raised by member physicians and practices regarding inconsistencies in how the new policy has been implemented. Due to the potential financial impact on patients, a copy of the letter was also sent to the Pennsylvania Insurance Department and the Pennsylvania Department of Health.

PAMED received this IBC response letter. IBC's letter also shared its modifier 25 policy overview and its modifier 25 FAQ.

Background on the Modifier 25 Policy 

IBC's modifier 25 policy reduces payment on the Evaluation & Management (E&M) service when performed on the same day as a minor procedure or a preventive visit, and billed with modifier 25. The policy calls for a 50 percent reduction to the E&M when billed with a small procedure or preventive visit.

PAMED believes there are several flaws in IBC's claims processing for its modifier 25 policy and, in our letter, asked for clarification on these issues:

  • Although the policy states the reduction would apply to the E&M, in most instances the E&M reduction is being incorrectly applied to the procedure.
  • PAMED has found that when one calculates what the reduction should have been when applied to the E&M, the net result is the same in certain cases. In other cases, however, the calculation does not appear to be correct, resulting in incorrect payment for E&M services to the practice and/or incorrect financial responsibility placed on the patient.
  • How the policy is being applied is not clearly reflected on the explanation of benefits form. Since the reduction is applied on the wrong line item, the calculations become difficult to follow.
  • Physicians and practices are reporting that they are not receiving responses from their IBC provider representatives when they submit requests for assistance with modifier 25 issues.

Next Steps

PAMED is commissioning an independent analysis of the financial impact to practices in IBC's region and has identified a third-party vendor to conduct the practice screenings to help evaluate the degree of the financial impact. The information obtained during these screenings will be of vital importance in helping PAMED assess how the issue affects patients and to determine our advocacy strategy.

National Coalition Opposes Reduced Payment for E&M Services Billed with Modifier 25

PAMED has joined a national coalition of state and specialty medical societies working to oppose inappropriate reduction of reimbursement for modifier 25.

Other insurers have implemented (or plan to do so in the future) modifier 25 policies similar to IBC's. For example, PAMED has confirmed that – effective Jan. 1., 2018 – Anthem BlueCross BlueShield plans to reduce reimbursement for E&M services when modifier 25 is used in these states: California, Ohio, Kentucky, Wisconsin, Maine, New Hampshire, Connecticut, and Nevada. View Anthem's Nevada policy here.

We will continue to follow this issue closely and report updates to our members.

What This Policy Change Means for Physicians Now

PAMED continues to strongly oppose IBC's policy change, however, as this policy is now in effect, we want to make sure you have the necessary information.

IBC issued these FAQs regarding the use of Modifier 25, which physicians should carefully review. It is important to note that IBC has made clear that it is not appropriate, and could be considered a breach of your agreement, if you instruct patients to return for a second visit for services.

From IBC's FAQs:

Is it appropriate for providers to instruct a patient to return for a second visit for services?
Unless medically necessary, providers should treat members on the same day for both services. Under the terms of their Professional Provider Agreement (Agreement), providers shall not discriminate against any member on the basis of the member's coverage source or amount of payment. Independence will consider it a breach of your Agreement if you require Independence members to return for services that can be performed on the same date of service and do not require your patients with other coverage to return for services. We do not expect that you will modify your approach to delivering services in a way that will impact patient care or satisfaction. We will review and audit providers who ask patients to return for second visits.

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