Cold Iron Truth

The Rest of the Story: Anthem rescinds modifier 25 reductions


When I was a kid, there used to be a radio show by Paul Harvey called “The Rest of the Story.” I loved this show because there was always a big back story behind the happy ending. And that’s how I feel now, it is indeed a happy day, and glad we should be, because the modifier 25 reductions have been rescinded by Anthem. But there is much more to the story, so here is the back story.

Dr. Brett M. Coldiron is a dermatologist and Mohs surgeon in Cincinnati.

Dr. Brett M. Coldiron

More than a decade ago, the Health & Human Services Office of Inspector General (OIG) reported that 35% of the time, a separate evaluation and management code should not be reimbursed on the same day as a minor procedure (that is, with modifier 25). Along with ophthalmology and otolaryngology, dermatology is one of the specialties that performs a lot of minor procedures on the same day as a visit and uses the 25 modifier the most frequently.

The OIG report kicked several things into motion. Insurers started auditing physicians for using modifier 25. The American Academy of Dermatology (AAD) rapidly educated membership on documentation requirements for billing modifier 25. That is, in many cases, separate evaluation and management services should be billed on the same day as a minor procedure, but the chart wasn’t showing the needed details. In an audit, if it is not in the chart, it wasn’t done.

The American Medical Association’s RVS Update Committee (RUC) took note of the OIG report and started to reduce overlapping time and payments on codes being reviewed, which were performed more than 50% of the time on the same day as an evaluation and management code.

The situation was stable for a number of years. Insurers would audit and reclaim some funds and physicians would try and document more. Then, one of the few good things about an electronic medical record became apparent. The documentation became overwhelming. You want to audit me? Here, you can have a BIG “chaw” of records in a PDF. No hassle for staff, just click a few buttons, and no lost records, which mean an automatic loss for doctors. No more settlements by doctors because it just wasn’t worth the time.

In 2012, Harvard Pilgrim HealthCare in Boston started routinely reducing the evaluation and management payment by 50% when filed with modifier 25. No audit, no review, just whack! The Massachusetts Academy of Dermatology vigorously opposed this, as did the AAD. In 2014, Tufts Health Plan followed suit, followed by Blue Cross & Blue Shield of Rhode Island in 2016. Then, in 2017, Anthem started rolling this policy out across the United States. Dermatologists felt like we were howling alone in the wilderness.

The AAD has a committee that deserves special mention here. The Patient Access and Payer Relations (PAPR) Committee, chaired by Howard Rogers, MD, was established to develop relationships with insurers so problems like this could be corrected expeditiously. Dr. Howard and the committee worked tirelessly on the modifier 25 problem. They pointed out that the RUC already had taken value out of the minor procedure codes to account for any overlap. State dermatology, state medical, and specialty societies all were alerted and protested. The PAPR committee had numerous calls with insurers, and Dr. Howard traveled all over the country to meet with Anthem representatives.

Perhaps what Anthem didn’t realize was that, in 2015, two new CPT codes for advanced care planning by primary care physicians (think written advanced directives) were approved for payment by Medicare in 2016, in addition to the regular visit, with a modifier 25 – as well they should have been. That 50% reduction would affect primary care as well.

The howling took on a new timbre.

Last year, the AAD-AMA delegation, led by Cyndi Yag-Howard, MD, took the lead on getting the AMA to adopt a tough stance on modifier 25 reductions. The AMA backed our position, and AMA trustee and chair elect of the AMA Board of Trustees, dermatologist Jack Resneck Jr., MD – with the help of dermatology RUC team lead Scott Collins, MD – outlined in succinct detail, proof that reductions by insurers were inappropriate. The AMA president and chair of the board of trustees took special interest in this issue, and Dr. Resneck personally assured the dermatology delegation that this was at the top of their priority list.

This, my colleagues, is why it is so important for you to join and support your academy, your state dermatology, state medical, and national medical societies. A lifetime of membership fees has just been credited to you.

Anthem then took the 50% reduction down to 25%. Not good enough, so PAPR agreed to call in the cavalry. A consultant who knows all the large employers who buy insurance from Anthem was contacted. Phone calls were made, the tipping point was reached, and Anthem finally rescinded its policy, announcing in late February that the company had decided not to proceed with the policy.

And that, my friends, is the rest of the story.


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