Practices fight Blue Cross over growing modifier 25 cuts Practices fight Blue Cross over growing modifier 25 cuts

Practices fight Blue Cross over growing modifier 25 cuts

By Grant Huang

Director of Content at DoctorsManagement

It started with one Blue Cross plan in Pennsylvania, but eight other states across the country will start the New Year being subject to the same painful policy: A 50% reduction in reimbursement for all E/M services with modifier 25 appended.

On Jan. 1, Anthem Blue Cross Blue Shield (BCBS) will reduce the payment of all E/M services with modifier 25 attached by 50%, targeting those E/M services billed in the same encounter as minor procedures (CPT codes with a 0-day or 10-day post-operative period). The policy will affect all practices participating with Anthem in the following states:





New Hampshire





The charge to slash payment for modifier 25 services was led by Independence Blue Cross (IBX) of Pennsylvania, which implemented the policy on Aug. 1 with little fanfare. IBX began issuing warnings about its impending modifier 25 policy in May, citing data that showed it was an “outlier in terms of cost of care and utilization.”

Anthem provided less rationale for its adoption of the same policy, writing in its announcement that “there is duplication of the indirect practice expense when performing both a minor surgery and evaluation and management service on the same day by the same provider. The duplication of indirect practice expense may include, but is not limited to, scheduling the visits, staffing, obtaining vital signs, lighting, and supplying the examination room for the same day medical visits. Therefore, when the E/M reported with minor surgery is eligible for separate reimbursement, the maximum fee schedule allowance for the reported E/M code will be reduced by 50%.”

Anthem’s rule actually goes farther than the IBX rule: In addition to all minor procedures, Anthem’s language includes preventive services and wellness exams. This means that if a problem-oriented E/M code is billed with modifier 25 in the same session as preventive services such as Medicare’s annual wellness visit (G0438-G0439) or commercially covered preventive visits (99391-99397), the problem-oriented E/M codes will be hit with the 50% reduction.

Affected practices push back

At Advanced ENT and Allergy, a 14-physician practice in Louisville, KY, the Anthem policy could cost up to $500,000 in annual revenue, estimates CEO Danielle Fife. “We are going to fight our toughest fight to get this policy changed regionally,” she says.

Her practice is in touch with the state medical society and will soon participate in a meeting with Anthem representatives and other practice stakeholders to discuss the policy. “It’s not going to improve quality for their members, and that’s what our stance is going to be,” Fife says.

The stakes are high: Anthem represents as much as 27% of her practice’s payer mix and can’t simply be dismissed, though Fife suggests that affected practices, including hers, could consider negotiating with Anthem to receive a carve-out exemption from the modifier 25 policy.

While there is no indication that Anthem would be likely to grant either a practice-specific or regional exception, Fife considers the fact that the meeting is happening at all to be a positive development. The Business of Medicine will continue to cover this story as Anthem meets with stakeholder practices.

Author: Grant Huang (