5 Fast Facts About 1 Payer’s 50 Percent Fee Reduction for Modifier 25

50 percent pay cut

A payer’s big modifier 25 payment reduction has been getting a lot of attention, both from providers affected and those concerned other payers will adopt the policy. Don’t miss this overview of what the policy is all about.

1. Which Payer Implemented the Policy?

Independence Blue Cross, which primarily serves Philadelphia and southeastern Pennsylvania, updated its commercial policy and Medicare Advantage policy related to 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).

2. When Is the Policy Effective?

The policy changes went into effect Aug. 1, 2017.

3. What’s the Gist?

The short version is that Independence will reimburse an E/M with modifier 25 appended at 50 percent of the fee schedule amount when the E/M is submitted on the same date of service as a minor procedure or preventive E/M reported by the same provider.

4. Which Codes Are Involved?

Minor procedures: The policy affects E/M codes with modifier 25 appended and reported on the same date as minor procedure codes. Minor procedure codes are those with a zero-day or ten-day postoperative period.

For a complete list of codes affected, review the commercial policy Attachment A and Medicare Advantage policy Attachment A.

Note that procedures without zero-day or ten-day postop periods, like ECGs and vaccinations, aren’t minor procedures so they aren’t part of this 50 percent reduction policy.

Preventive E/M: If you report modifier 25 on a problem-focused E/M and submit it on the same DOS and under the same provider as a preventive E/M, Independence will reimburse the problem-focused E/M at 50 percent of the fee schedule amount.

To see the codes affected by this part of the policy, check the policy Attachment B and the Medicare Advantage policy Attachment B.

5. Where Can I Get More Info?

In addition to reviewing the policies and attachments, be sure to read the 25: Frequently asked questions posted by Independence. Here are some takeaways from the FAQ:

  • You cannot dispute, review, or appeal the 50 percent reduction when it’s made in accordance with the policy.
  • Do not try to get around the policy by asking patients to come in on one day for the E/M and another day for the minor procedure or preventive E/M when you could do both on the same date. Independence will consider that to be a breach of your agreement.
  • The 50 percent reduction will apply to the E/M even when the E/M is more complex than the minor procedure or preventive E/M.
  • Independence expects the policy change to impact about 6 percent of their E/M claims.

What About You?

Are you affected by this policy or a similar policy? Do you think a policy like this would affect reimbursement for a lot of your claims?


Deborah works on a wide range of TCI SuperCoder projects, researching and writing about coding, as well as assisting with data updates and tool development for our online coding solutions. Since joining TCI in 2004, she’s covered the ins and outs of coding for radiology, cardiology, oncology and hematology, orthopedics, audiology, and more.


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