• AAFP Joins Effort to Reverse Costly CPT Modifier 25 Decision

    NJ Insurer Cuts Pay for Appended E/M Codes

    June 18, 2018, 02:39 pm Sheri Porter – The AAFP and the New Jersey AFP recently joined 45 other professional medical organizations in asking two health insurance companies, one a subsidiary of the other, to reconsider their policies on evaluation and management (E/M) codes appended with the CPT modifier 25.

    amerihealth letter

    The May 24 letter was addressed to Daniel Hilferty, president and CEO of Independence Blue Cross (IBC) in Philadelphia, and Mike Munoz, market president of IBC subsidiary AmeriHealth New Jersey in Cranbury, N.J.

    The letter points out that issues with E/M policies were first raised in September 2017 by the Medical Society of New Jersey, and that now, many months later, those concerns still have not been addressed.


    According to Kent Moore, the AAFP's senior strategist for physician payment, the modifier 25 comes into play when a physician performs a procedure or provides some other service to a patient and, during the same visit, also provides an evaluation and management (E/M) service "that is above and beyond the work included in the procedure or other service."

    In such cases, physicians are able to indicate that an E/M service required more work -- and deserves separate payment -- "by appending modifier 25 to the E/M code when reporting it on the claim form," Moore explained to AAFP News.

    Benchmark Data

    As described in the recent letter, previous benchmark data gathered by an analytical company for AmeriHealth/IBC indicated that in New Jersey, "the number of AmeriHealth payments for claim lines including modifier 25 … were 10 percent higher" than the benchmark.

    "This led to the adoption of the policy drastically reducing payment for certain E&M codes appended with modifier 25," says the letter.

    "We again ask that AmeriHealth/IBC share this data so that we can better understand the rationale behind the implementation of this policy."


    The medical organizations suggest in the May letter that AmeriHealth/IBC is "misinterpreting the valuation of E&M codes appended with modifier 25."

    The letter points out the AMA/Specialty Society Relative Value Scale Update Committee "already takes into account potential overlap when valuing codes" typically billed with an E/M service.

    Thus, the policy in question is causing a further reduction.

    "This policy penalizes practices providing the highest value care," says the letter. "We continue to believe that it is arbitrary for AmeriHealth/IBC to reduce payment by 50 percent to all physicians, including its participating physicians, even if their use of modifier 25 is absolutely correct and the services rendered are medically necessary."

    In addition to requesting the opportunity to review the benchmark data that precipitated implementation of the modifier 25 policy, the letter asks AmeriHealth/IBC to

    • explain how it arrived at the 50 percent reduction amount,
    • contemplate how all affected organizations can work together to improve the health care system, and
    • set up a face-to-face meeting between AmeriHealth/IBC and the medical specialty societies involved to discuss the issues at hand.

    Previous Favorable Outcome

    Importantly, notes the letter, this latest incident is not the first time the CPT modifier 25 issue has arisen with an insurer affiliated with the Blue Cross Blue Shield Association.

    Last winter, Anthem rescinded its planned modifier 25 policy change that was set to take effect on March 1. In addition, the insurer made a commitment to work with organized medicine to achieve a number of common goals that include enhancing patient health literacy, implementing value-based payment models, and streamlining or eliminating prior authorization requirements deemed to be of low value.

    Anthem's decision was addressed in FPM's Feb. 28 Getting Paid blog post.