Howard W. Rogers, MD, PhD

In October 2020, Medicare released an updated guidance to reduce Mohs micrographic surgery (MMS) reimbursement issues,¹ which initially was released in 2013. This guidance defines the latest performance and documentation requirements that Medicare requires for MMS. Understanding these requirements and making sure that your Mohs surgical reports have all the needed documentation details are critical because auditors from not only Medicare Administrative Contractors (MACs) but also private insurers and Medicare Advantage plans have adopted these standards and will deny payment for Mohs surgical codes if they are not met. This article provides a review of the updated Medicare requirements to make sure your MMS procedure notes are audit proof.

Notes Must Indicate Mohs Is the Most Appropriate Treatment

I review many of my colleagues’ Mohs notes and can tell you that some of the requirements laid out in the updated guidance typically are already reported by Mohs surgeons in their notes, including the location, number, and size of the lesion or lesions treated and the number of stages performed. However, there are some new requirements that often are not reported by Mohs surgeons that now need to be included. The guidance indicates the following:

The majority of skin cancers can be managed by simple excision or destruction techniques. The medical record of a patient undergoing MMS should clearly show that this procedure was chosen because of the complexity (eg, poorly defined clinical borders, possible deep invasion, prior irradiation), size or location (eg, maximum conservation of tumor-free tissue is important). Medicare will consider reimbursement for MMS for accepted diagnoses and indications, which you must document in the patient’s medical record as being appropriate for MMS and that MMS is the most appropriate choice for the treatment of a particular lesion.¹

In my experience, most Mohs notes include some statement that the skin cancer treated is appropriate based on the Mohs appropriate use criteria (AUC) or the AUC score. However, notes should make clear not just that the lesion treated is “appropriate” for MMS but also that it is the most appropriate treatment (eg, why the lesion was not managed by standard excision or destruction technique).

Mohs Surgeon Must Perform the Surgery and Interpret Slides

The updated guidance clearly indicates that MMS may only be performed by a physician who is specifically trained and highly skilled in Mohs techniques and pathologic identification: “Medicare will only reimburse for MMS services when the Mohs surgeon acts as both surgeon and pathologist.”¹ Mohs micrographic surgery codes may not be billed if preparation or interpretation of the pathology slides is performed by a physician other than the Mohs surgeon. Operative notes and pathology documentation in the patient’s medical record should clearly show that MMS was performed using an accepted MMS technique in which the physician acts in 2 integrated and distinct capacities—surgeon and pathologist—thereby confirming that the procedure meets the definition of the Current Procedural Terminology code(s).

Furthermore, the Mohs operative report should detail “the number of specimens per stage.”¹ I interpret this statement to indicate that the Mohs surgeon should document the number of tissue blocks examined in each stage of Mohs surgery. For example, a statement in the notes such as “the specimen from the first Mohs stage was oriented, mapped, and divided into 4 blocks” should suffice to meet this requirement.

Histologic Description Must Be Included in Mohs Notes

Medicare will require the Mohs surgeon to document “the histology of the specimens taken. That description should include depth of invasion, pathological pattern, cell morphology, and, if present, perineural invasion or presence of scar tissue.”¹ Although this histologic description requirement appears daunting, it is common for Mohs surgeons to indicate their pathologic findings on their Mohs map such as “NBCC” next to a red area to indicate “nodular basal cell carcinoma visualized.” A template-based system to translate typical pathologic findings can be employed to rapidly and accurately populate a Mohs note with histologic description such as “NBBC=nodular aggregates of palisaded basaloid epithelial tumor arising from the epidermis forming a palisade with a cleft forming from the adjacent mucinous stroma extending to the mid dermis. Centrally the nuclei become crowded with scattered mitotic figures and necrotic bodies evident.”

Recent Improvement for 1-Stage Mohs Surgeries

The most notable improvement in the 2020 MMS reimbursement requirements vs the prior version is that, “If tumor is visualized on stage one, you must describe the histology of the specimens taken.”¹ This indicates that if no tumor is visualized in the first stage, then no description of the tumor is possible or necessary. This is a much-needed improvement, as I have observed that some auditors have denied 1-stage Mohs surgeries due to lack of tumor histology description.

Final Thoughts

Overall, the updated Medicare guidance provides important details in the requirements for performance and documentation of Mohs surgery cases. However, additional critical information will be found in Mohs coverage policies and local coverage determinations (LCDs) from MACs and private insurers.^2-4 Each LCD and insurer Mohs payment policy has unique wording and requirements. Coverage of MMS for specific malignant diagnoses, histologic subtypes, locations, and clinical scenarios varies between LCDs; most are based directly on the Mohs AUC, while others have a less specific coverage criteria. To understand the specific documentation and coverage requirements of the MAC for a particular region or private insurer, Mohs surgeons are encouraged to familiarize themselves with the Mohs surgery LCD of their local MAC and coverage policies of their insurers and to ensure their documentation substantiates these requirements. Making sure that your MMS documentation is accurate and complies with Medicare and insurer requirements will keep you out of hot water with auditors and allow reimbursement for this critical skin cancer procedure.

In October 2020, Medicare released an updated guidance to reduce Mohs micrographic surgery (MMS) reimbursement issues,¹ which initially was released in 2013. This guidance defines the latest performance and documentation requirements that Medicare requires for MMS. Understanding these requirements and making sure that your Mohs surgical reports have all the needed documentation details are critical because auditors from not only Medicare Administrative Contractors (MACs) but also private insurers and Medicare Advantage plans have adopted these standards and will deny payment for Mohs surgical codes if they are not met. This article provides a review of the updated Medicare requirements to make sure your MMS procedure notes are audit proof.

Notes Must Indicate Mohs Is the Most Appropriate Treatment

I review many of my colleagues’ Mohs notes and can tell you that some of the requirements laid out in the updated guidance typically are already reported by Mohs surgeons in their notes, including the location, number, and size of the lesion or lesions treated and the number of stages performed. However, there are some new requirements that often are not reported by Mohs surgeons that now need to be included. The guidance indicates the following:

The majority of skin cancers can be managed by simple excision or destruction techniques. The medical record of a patient undergoing MMS should clearly show that this procedure was chosen because of the complexity (eg, poorly defined clinical borders, possible deep invasion, prior irradiation), size or location (eg, maximum conservation of tumor-free tissue is important). Medicare will consider reimbursement for MMS for accepted diagnoses and indications, which you must document in the patient’s medical record as being appropriate for MMS and that MMS is the most appropriate choice for the treatment of a particular lesion.¹

In my experience, most Mohs notes include some statement that the skin cancer treated is appropriate based on the Mohs appropriate use criteria (AUC) or the AUC score. However, notes should make clear not just that the lesion treated is “appropriate” for MMS but also that it is the most appropriate treatment (eg, why the lesion was not managed by standard excision or destruction technique).

Mohs Surgeon Must Perform the Surgery and Interpret Slides

The updated guidance clearly indicates that MMS may only be performed by a physician who is specifically trained and highly skilled in Mohs techniques and pathologic identification: “Medicare will only reimburse for MMS services when the Mohs surgeon acts as both surgeon and pathologist.”¹ Mohs micrographic surgery codes may not be billed if preparation or interpretation of the pathology slides is performed by a physician other than the Mohs surgeon. Operative notes and pathology documentation in the patient’s medical record should clearly show that MMS was performed using an accepted MMS technique in which the physician acts in 2 integrated and distinct capacities—surgeon and pathologist—thereby confirming that the procedure meets the definition of the Current Procedural Terminology code(s).

Furthermore, the Mohs operative report should detail “the number of specimens per stage.”¹ I interpret this statement to indicate that the Mohs surgeon should document the number of tissue blocks examined in each stage of Mohs surgery. For example, a statement in the notes such as “the specimen from the first Mohs stage was oriented, mapped, and divided into 4 blocks” should suffice to meet this requirement.

Histologic Description Must Be Included in Mohs Notes

Medicare will require the Mohs surgeon to document “the histology of the specimens taken. That description should include depth of invasion, pathological pattern, cell morphology, and, if present, perineural invasion or presence of scar tissue.”¹ Although this histologic description requirement appears daunting, it is common for Mohs surgeons to indicate their pathologic findings on their Mohs map such as “NBCC” next to a red area to indicate “nodular basal cell carcinoma visualized.” A template-based system to translate typical pathologic findings can be employed to rapidly and accurately populate a Mohs note with histologic description such as “NBBC=nodular aggregates of palisaded basaloid epithelial tumor arising from the epidermis forming a palisade with a cleft forming from the adjacent mucinous stroma extending to the mid dermis. Centrally the nuclei become crowded with scattered mitotic figures and necrotic bodies evident.”

Recent Improvement for 1-Stage Mohs Surgeries

The most notable improvement in the 2020 MMS reimbursement requirements vs the prior version is that, “If tumor is visualized on stage one, you must describe the histology of the specimens taken.”¹ This indicates that if no tumor is visualized in the first stage, then no description of the tumor is possible or necessary. This is a much-needed improvement, as I have observed that some auditors have denied 1-stage Mohs surgeries due to lack of tumor histology description.

Final Thoughts

Overall, the updated Medicare guidance provides important details in the requirements for performance and documentation of Mohs surgery cases. However, additional critical information will be found in Mohs coverage policies and local coverage determinations (LCDs) from MACs and private insurers.^2-4 Each LCD and insurer Mohs payment policy has unique wording and requirements. Coverage of MMS for specific malignant diagnoses, histologic subtypes, locations, and clinical scenarios varies between LCDs; most are based directly on the Mohs AUC, while others have a less specific coverage criteria. To understand the specific documentation and coverage requirements of the MAC for a particular region or private insurer, Mohs surgeons are encouraged to familiarize themselves with the Mohs surgery LCD of their local MAC and coverage policies of their insurers and to ensure their documentation substantiates these requirements. Making sure that your MMS documentation is accurate and complies with Medicare and insurer requirements will keep you out of hot water with auditors and allow reimbursement for this critical skin cancer procedure.

In October 2020, Medicare released an updated guidance to reduce Mohs micrographic surgery (MMS) reimbursement issues,¹ which initially was released in 2013. This guidance defines the latest performance and documentation requirements that Medicare requires for MMS. Understanding these requirements and making sure that your Mohs surgical reports have all the needed documentation details are critical because auditors from not only Medicare Administrative Contractors (MACs) but also private insurers and Medicare Advantage plans have adopted these standards and will deny payment for Mohs surgical codes if they are not met. This article provides a review of the updated Medicare requirements to make sure your MMS procedure notes are audit proof.

Notes Must Indicate Mohs Is the Most Appropriate Treatment

I review many of my colleagues’ Mohs notes and can tell you that some of the requirements laid out in the updated guidance typically are already reported by Mohs surgeons in their notes, including the location, number, and size of the lesion or lesions treated and the number of stages performed. However, there are some new requirements that often are not reported by Mohs surgeons that now need to be included. The guidance indicates the following:

The majority of skin cancers can be managed by simple excision or destruction techniques. The medical record of a patient undergoing MMS should clearly show that this procedure was chosen because of the complexity (eg, poorly defined clinical borders, possible deep invasion, prior irradiation), size or location (eg, maximum conservation of tumor-free tissue is important). Medicare will consider reimbursement for MMS for accepted diagnoses and indications, which you must document in the patient’s medical record as being appropriate for MMS and that MMS is the most appropriate choice for the treatment of a particular lesion.¹

In my experience, most Mohs notes include some statement that the skin cancer treated is appropriate based on the Mohs appropriate use criteria (AUC) or the AUC score. However, notes should make clear not just that the lesion treated is “appropriate” for MMS but also that it is the most appropriate treatment (eg, why the lesion was not managed by standard excision or destruction technique).

Mohs Surgeon Must Perform the Surgery and Interpret Slides

The updated guidance clearly indicates that MMS may only be performed by a physician who is specifically trained and highly skilled in Mohs techniques and pathologic identification: “Medicare will only reimburse for MMS services when the Mohs surgeon acts as both surgeon and pathologist.”¹ Mohs micrographic surgery codes may not be billed if preparation or interpretation of the pathology slides is performed by a physician other than the Mohs surgeon. Operative notes and pathology documentation in the patient’s medical record should clearly show that MMS was performed using an accepted MMS technique in which the physician acts in 2 integrated and distinct capacities—surgeon and pathologist—thereby confirming that the procedure meets the definition of the Current Procedural Terminology code(s).

Furthermore, the Mohs operative report should detail “the number of specimens per stage.”¹ I interpret this statement to indicate that the Mohs surgeon should document the number of tissue blocks examined in each stage of Mohs surgery. For example, a statement in the notes such as “the specimen from the first Mohs stage was oriented, mapped, and divided into 4 blocks” should suffice to meet this requirement.

Histologic Description Must Be Included in Mohs Notes

Medicare will require the Mohs surgeon to document “the histology of the specimens taken. That description should include depth of invasion, pathological pattern, cell morphology, and, if present, perineural invasion or presence of scar tissue.”¹ Although this histologic description requirement appears daunting, it is common for Mohs surgeons to indicate their pathologic findings on their Mohs map such as “NBCC” next to a red area to indicate “nodular basal cell carcinoma visualized.” A template-based system to translate typical pathologic findings can be employed to rapidly and accurately populate a Mohs note with histologic description such as “NBBC=nodular aggregates of palisaded basaloid epithelial tumor arising from the epidermis forming a palisade with a cleft forming from the adjacent mucinous stroma extending to the mid dermis. Centrally the nuclei become crowded with scattered mitotic figures and necrotic bodies evident.”

Recent Improvement for 1-Stage Mohs Surgeries

The most notable improvement in the 2020 MMS reimbursement requirements vs the prior version is that, “If tumor is visualized on stage one, you must describe the histology of the specimens taken.”¹ This indicates that if no tumor is visualized in the first stage, then no description of the tumor is possible or necessary. This is a much-needed improvement, as I have observed that some auditors have denied 1-stage Mohs surgeries due to lack of tumor histology description.

Final Thoughts

Overall, the updated Medicare guidance provides important details in the requirements for performance and documentation of Mohs surgery cases. However, additional critical information will be found in Mohs coverage policies and local coverage determinations (LCDs) from MACs and private insurers.^2-4 Each LCD and insurer Mohs payment policy has unique wording and requirements. Coverage of MMS for specific malignant diagnoses, histologic subtypes, locations, and clinical scenarios varies between LCDs; most are based directly on the Mohs AUC, while others have a less specific coverage criteria. To understand the specific documentation and coverage requirements of the MAC for a particular region or private insurer, Mohs surgeons are encouraged to familiarize themselves with the Mohs surgery LCD of their local MAC and coverage policies of their insurers and to ensure their documentation substantiates these requirements. Making sure that your MMS documentation is accurate and complies with Medicare and insurer requirements will keep you out of hot water with auditors and allow reimbursement for this critical skin cancer procedure.

Insurers Target Modifier -25

Modifier -25 allows reporting of both a minor procedure (ie, one with a 0- or 10-day global period) and a separate and distinct evaluation and management (E/M) service on the same date of service.¹ Because of the multicomplaint nature of dermatology, the ability to report a same-day procedure and an E/M service is critical for efficient, cost-effective, and patient-centered dermatologic care. However, it is well known that the use of modifier -25 has been under notable insurer scrutiny and is a common reason for medical record audits.^2,3 Some insurers have responded to increased utilization of modifier -25 by cutting reimbursement for claims that include both a procedure and an E/M service or by denying one of the services altogether.^4-6 The Centers for Medicare and Medicaid Services also have expressed concern about this coding combination with proposed cuts to reimbursement.⁷ Moreover, the Office of Inspector General has announced a work plan to investigate the frequent utilization of E/M codes and minor procedures by dermatologists.⁸ Clearly, modifier -25 is a continued target by insurers and regulators; therefore, dermatologists will want to make sure their coding and documentation meet all requirements and are updated for the new E/M codes for 2021.

The American Medical Association’s Current Procedural Terminology indicates that modifier -25 allows reporting of a “significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of a procedure or other service.”¹ Given that dermatology patients typically present with multiple concerns, dermatologists commonly evaluate and treat numerous conditions during one visit. Understanding what constitutes a separately identifiable E/M service is critical to bill accurately and to pass insurer audits.

Global Surgical Package

To appropriately bill both a procedure and an E/M service, the physician must indicate that the patient’s condition required an E/M service above and beyond the usual work of the procedure. The compilation of evaluation and work included in the payment for a procedure is called the global surgical package.⁹ In general, the global surgical package includes local or topical anesthesia; the surgical service/procedure itself; immediate postoperative care, including dictating the operative note; meeting/discussing the patient’s procedure with family and other physicians; and writing orders for the patient. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M services associated with the decision to perform surgery. An appropriate history and physical examination as well as a discussion of the differential diagnosis, treatment options, and risk and benefits of treatment are all included in the payment of a minor procedure itself. Therefore, an evaluation to discuss a patient’s condition or change in condition, alternatives to treatment, or next steps after a diagnosis related to a treatment or diagnostic procedure should not be separately reported. Moreover, the fact that the patient is new to the physician is not in itself sufficient to allow reporting of an E/M service with these minor procedures. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

2021 E/M Codes Simplify Documentation

The biggest coding change of 2021 was the new E/M codes.¹⁰ Prior to this year, the descriptors of E/M services recognized 7 components to define the levels of E/M services¹¹: history and nature of the presenting problem; physical examination; medical decision-making (MDM); counseling; coordination of care; and time. Furthermore, history, physical examination, and MDM were all broken down into more granular elements that were summed to determine the level for each component; for example, the history of the presenting problem was defined as a chronological description of the development of the patient’s present illness, including the following elements: location, quality, severity, duration, timing, context, modifying factors, and associated signs and symptoms. Each of these categories would constitute bullet points to be summed to determine the level of history. Physical examination and MDM bullet points also would be summed to determine a proper coding level.¹¹ Understandably, this coding scheme was complicated and burdensome to medical providers.

The redefinition of the E/M codes for 2021 substantially simplified the determination of coding level and documentation.¹⁰ The revisions to the E/M office visit code descriptors and documentation standards are now centered around how physicians think and take care of patients and not on mandatory standards and checking boxes. The main changes involve MDM as the prime determinant of the coding level. Elements of MDM affecting coding for an outpatient or office visit now include only 3 components: the number and complexity of problems addressed in the encounter, the amount or complexity of data to be reviewed and analyzed, and the risk of complications or morbidity of patient management. Gone are the requirements from the earlier criteria requiring so many bullet points for the history, physical examination, and MDM.

Dermatologists may ask, “How does the new E/M coding structure affect reporting and documenting an E/M and a procedure on the same day?” The answer is that the determination of separate and distinct is basically unchanged with the new E/M codes; however, the documentation requirements for modifier -25 using the new E/M codes are simplified.

As always, the key to determining whether a separate and distinct E/M service was provided and subsequently documented is to deconstruct the medical note. All evaluation services associated with the procedure—making a clinical diagnosis or differential diagnosis, decision to perform surgery, and discussion of alternative treatments—should be removed from one’s documentation as shown in the example below. If a complete E/M service still exists, then an E/M may be billed in addition to the procedure. Physical examination of the treatment area is included in the surgical package. With the prior E/M criteria, physical examination of the procedural area could not be used again as a bullet point to count for the E/M level. However, with the new 2021 coding requirements, the documentation of a separate MDM will be sufficient to meet criteria because documentation of physical examination is not a requirement.

Modifier -25 Examples

Let’s examine a typical dermatologist medical note. An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. The patient also complains of a growing tender lesion on the left elbow of 2 months’ duration. Physical examination reveals a linear vesicular eruption on the left wrist and a tender hyperkeratotic papule on the left elbow. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed. The decision is made to perform a tangential biopsy of the lesion on the left elbow because of the suspicion for malignancy. The biopsy is performed the same day.

This case clearly illustrates performance of an E/M service in the treatment of rhus dermatitis, which is separate and distinct from the biopsy procedure; however, in evaluating whether the case meets the documentation requirements for modifier -25, the information in the medical note inclusive to the procedure’s global surgical package, including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options, is eliminated, leaving the following notes: An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed.

Because the physical examination of the body part (left arm) is included in the procedure’s global surgical package, the examination of the left wrist cannot be used as coding support for the E/M service. This makes a difference for coding level in the prior E/M coding requirements, which required examination bullet points. However, with the 2021 E/M codes, documentation of physical examination bullet points is irrelevant to the coding level. Therefore, qualifying for a modifier -25 claim is more straightforward in this case with the new code set. Because bullet points are not integral to the 2021 E/M codes, qualifying and properly documenting for a higher level of service will likely be more common in dermatology.

Final Thoughts

Frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of minor procedures and E/M services allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. The new E/M codes for 2021 actually make the documentation of a separate and distinct E/M service less complicated because the bullet point requirements associated with the old E/M codes have been eliminated. Understanding how the new E/M code descriptors affect modifier -25 reporting and clear documentation of separate, distinct, and medically necessary E/M services will be needed due to increased insurer scrutiny and audits.

Insurers Target Modifier -25

Modifier -25 allows reporting of both a minor procedure (ie, one with a 0- or 10-day global period) and a separate and distinct evaluation and management (E/M) service on the same date of service.¹ Because of the multicomplaint nature of dermatology, the ability to report a same-day procedure and an E/M service is critical for efficient, cost-effective, and patient-centered dermatologic care. However, it is well known that the use of modifier -25 has been under notable insurer scrutiny and is a common reason for medical record audits.^2,3 Some insurers have responded to increased utilization of modifier -25 by cutting reimbursement for claims that include both a procedure and an E/M service or by denying one of the services altogether.^4-6 The Centers for Medicare and Medicaid Services also have expressed concern about this coding combination with proposed cuts to reimbursement.⁷ Moreover, the Office of Inspector General has announced a work plan to investigate the frequent utilization of E/M codes and minor procedures by dermatologists.⁸ Clearly, modifier -25 is a continued target by insurers and regulators; therefore, dermatologists will want to make sure their coding and documentation meet all requirements and are updated for the new E/M codes for 2021.

The American Medical Association’s Current Procedural Terminology indicates that modifier -25 allows reporting of a “significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of a procedure or other service.”¹ Given that dermatology patients typically present with multiple concerns, dermatologists commonly evaluate and treat numerous conditions during one visit. Understanding what constitutes a separately identifiable E/M service is critical to bill accurately and to pass insurer audits.

Global Surgical Package

To appropriately bill both a procedure and an E/M service, the physician must indicate that the patient’s condition required an E/M service above and beyond the usual work of the procedure. The compilation of evaluation and work included in the payment for a procedure is called the global surgical package.⁹ In general, the global surgical package includes local or topical anesthesia; the surgical service/procedure itself; immediate postoperative care, including dictating the operative note; meeting/discussing the patient’s procedure with family and other physicians; and writing orders for the patient. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M services associated with the decision to perform surgery. An appropriate history and physical examination as well as a discussion of the differential diagnosis, treatment options, and risk and benefits of treatment are all included in the payment of a minor procedure itself. Therefore, an evaluation to discuss a patient’s condition or change in condition, alternatives to treatment, or next steps after a diagnosis related to a treatment or diagnostic procedure should not be separately reported. Moreover, the fact that the patient is new to the physician is not in itself sufficient to allow reporting of an E/M service with these minor procedures. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

2021 E/M Codes Simplify Documentation

The biggest coding change of 2021 was the new E/M codes.¹⁰ Prior to this year, the descriptors of E/M services recognized 7 components to define the levels of E/M services¹¹: history and nature of the presenting problem; physical examination; medical decision-making (MDM); counseling; coordination of care; and time. Furthermore, history, physical examination, and MDM were all broken down into more granular elements that were summed to determine the level for each component; for example, the history of the presenting problem was defined as a chronological description of the development of the patient’s present illness, including the following elements: location, quality, severity, duration, timing, context, modifying factors, and associated signs and symptoms. Each of these categories would constitute bullet points to be summed to determine the level of history. Physical examination and MDM bullet points also would be summed to determine a proper coding level.¹¹ Understandably, this coding scheme was complicated and burdensome to medical providers.

The redefinition of the E/M codes for 2021 substantially simplified the determination of coding level and documentation.¹⁰ The revisions to the E/M office visit code descriptors and documentation standards are now centered around how physicians think and take care of patients and not on mandatory standards and checking boxes. The main changes involve MDM as the prime determinant of the coding level. Elements of MDM affecting coding for an outpatient or office visit now include only 3 components: the number and complexity of problems addressed in the encounter, the amount or complexity of data to be reviewed and analyzed, and the risk of complications or morbidity of patient management. Gone are the requirements from the earlier criteria requiring so many bullet points for the history, physical examination, and MDM.

Dermatologists may ask, “How does the new E/M coding structure affect reporting and documenting an E/M and a procedure on the same day?” The answer is that the determination of separate and distinct is basically unchanged with the new E/M codes; however, the documentation requirements for modifier -25 using the new E/M codes are simplified.

As always, the key to determining whether a separate and distinct E/M service was provided and subsequently documented is to deconstruct the medical note. All evaluation services associated with the procedure—making a clinical diagnosis or differential diagnosis, decision to perform surgery, and discussion of alternative treatments—should be removed from one’s documentation as shown in the example below. If a complete E/M service still exists, then an E/M may be billed in addition to the procedure. Physical examination of the treatment area is included in the surgical package. With the prior E/M criteria, physical examination of the procedural area could not be used again as a bullet point to count for the E/M level. However, with the new 2021 coding requirements, the documentation of a separate MDM will be sufficient to meet criteria because documentation of physical examination is not a requirement.

Modifier -25 Examples

Let’s examine a typical dermatologist medical note. An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. The patient also complains of a growing tender lesion on the left elbow of 2 months’ duration. Physical examination reveals a linear vesicular eruption on the left wrist and a tender hyperkeratotic papule on the left elbow. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed. The decision is made to perform a tangential biopsy of the lesion on the left elbow because of the suspicion for malignancy. The biopsy is performed the same day.

This case clearly illustrates performance of an E/M service in the treatment of rhus dermatitis, which is separate and distinct from the biopsy procedure; however, in evaluating whether the case meets the documentation requirements for modifier -25, the information in the medical note inclusive to the procedure’s global surgical package, including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options, is eliminated, leaving the following notes: An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed.

Because the physical examination of the body part (left arm) is included in the procedure’s global surgical package, the examination of the left wrist cannot be used as coding support for the E/M service. This makes a difference for coding level in the prior E/M coding requirements, which required examination bullet points. However, with the 2021 E/M codes, documentation of physical examination bullet points is irrelevant to the coding level. Therefore, qualifying for a modifier -25 claim is more straightforward in this case with the new code set. Because bullet points are not integral to the 2021 E/M codes, qualifying and properly documenting for a higher level of service will likely be more common in dermatology.

Final Thoughts

Frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of minor procedures and E/M services allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. The new E/M codes for 2021 actually make the documentation of a separate and distinct E/M service less complicated because the bullet point requirements associated with the old E/M codes have been eliminated. Understanding how the new E/M code descriptors affect modifier -25 reporting and clear documentation of separate, distinct, and medically necessary E/M services will be needed due to increased insurer scrutiny and audits.

Insurers Target Modifier -25

Modifier -25 allows reporting of both a minor procedure (ie, one with a 0- or 10-day global period) and a separate and distinct evaluation and management (E/M) service on the same date of service.¹ Because of the multicomplaint nature of dermatology, the ability to report a same-day procedure and an E/M service is critical for efficient, cost-effective, and patient-centered dermatologic care. However, it is well known that the use of modifier -25 has been under notable insurer scrutiny and is a common reason for medical record audits.^2,3 Some insurers have responded to increased utilization of modifier -25 by cutting reimbursement for claims that include both a procedure and an E/M service or by denying one of the services altogether.^4-6 The Centers for Medicare and Medicaid Services also have expressed concern about this coding combination with proposed cuts to reimbursement.⁷ Moreover, the Office of Inspector General has announced a work plan to investigate the frequent utilization of E/M codes and minor procedures by dermatologists.⁸ Clearly, modifier -25 is a continued target by insurers and regulators; therefore, dermatologists will want to make sure their coding and documentation meet all requirements and are updated for the new E/M codes for 2021.

The American Medical Association’s Current Procedural Terminology indicates that modifier -25 allows reporting of a “significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of a procedure or other service.”¹ Given that dermatology patients typically present with multiple concerns, dermatologists commonly evaluate and treat numerous conditions during one visit. Understanding what constitutes a separately identifiable E/M service is critical to bill accurately and to pass insurer audits.

Global Surgical Package

To appropriately bill both a procedure and an E/M service, the physician must indicate that the patient’s condition required an E/M service above and beyond the usual work of the procedure. The compilation of evaluation and work included in the payment for a procedure is called the global surgical package.⁹ In general, the global surgical package includes local or topical anesthesia; the surgical service/procedure itself; immediate postoperative care, including dictating the operative note; meeting/discussing the patient’s procedure with family and other physicians; and writing orders for the patient. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M services associated with the decision to perform surgery. An appropriate history and physical examination as well as a discussion of the differential diagnosis, treatment options, and risk and benefits of treatment are all included in the payment of a minor procedure itself. Therefore, an evaluation to discuss a patient’s condition or change in condition, alternatives to treatment, or next steps after a diagnosis related to a treatment or diagnostic procedure should not be separately reported. Moreover, the fact that the patient is new to the physician is not in itself sufficient to allow reporting of an E/M service with these minor procedures. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

2021 E/M Codes Simplify Documentation

The biggest coding change of 2021 was the new E/M codes.¹⁰ Prior to this year, the descriptors of E/M services recognized 7 components to define the levels of E/M services¹¹: history and nature of the presenting problem; physical examination; medical decision-making (MDM); counseling; coordination of care; and time. Furthermore, history, physical examination, and MDM were all broken down into more granular elements that were summed to determine the level for each component; for example, the history of the presenting problem was defined as a chronological description of the development of the patient’s present illness, including the following elements: location, quality, severity, duration, timing, context, modifying factors, and associated signs and symptoms. Each of these categories would constitute bullet points to be summed to determine the level of history. Physical examination and MDM bullet points also would be summed to determine a proper coding level.¹¹ Understandably, this coding scheme was complicated and burdensome to medical providers.

The redefinition of the E/M codes for 2021 substantially simplified the determination of coding level and documentation.¹⁰ The revisions to the E/M office visit code descriptors and documentation standards are now centered around how physicians think and take care of patients and not on mandatory standards and checking boxes. The main changes involve MDM as the prime determinant of the coding level. Elements of MDM affecting coding for an outpatient or office visit now include only 3 components: the number and complexity of problems addressed in the encounter, the amount or complexity of data to be reviewed and analyzed, and the risk of complications or morbidity of patient management. Gone are the requirements from the earlier criteria requiring so many bullet points for the history, physical examination, and MDM.

Dermatologists may ask, “How does the new E/M coding structure affect reporting and documenting an E/M and a procedure on the same day?” The answer is that the determination of separate and distinct is basically unchanged with the new E/M codes; however, the documentation requirements for modifier -25 using the new E/M codes are simplified.

As always, the key to determining whether a separate and distinct E/M service was provided and subsequently documented is to deconstruct the medical note. All evaluation services associated with the procedure—making a clinical diagnosis or differential diagnosis, decision to perform surgery, and discussion of alternative treatments—should be removed from one’s documentation as shown in the example below. If a complete E/M service still exists, then an E/M may be billed in addition to the procedure. Physical examination of the treatment area is included in the surgical package. With the prior E/M criteria, physical examination of the procedural area could not be used again as a bullet point to count for the E/M level. However, with the new 2021 coding requirements, the documentation of a separate MDM will be sufficient to meet criteria because documentation of physical examination is not a requirement.

Modifier -25 Examples

Let’s examine a typical dermatologist medical note. An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. The patient also complains of a growing tender lesion on the left elbow of 2 months’ duration. Physical examination reveals a linear vesicular eruption on the left wrist and a tender hyperkeratotic papule on the left elbow. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed. The decision is made to perform a tangential biopsy of the lesion on the left elbow because of the suspicion for malignancy. The biopsy is performed the same day.

This case clearly illustrates performance of an E/M service in the treatment of rhus dermatitis, which is separate and distinct from the biopsy procedure; however, in evaluating whether the case meets the documentation requirements for modifier -25, the information in the medical note inclusive to the procedure’s global surgical package, including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options, is eliminated, leaving the following notes: An established patient presents to the dermatologist complaining of an itchy rash on the left wrist after a hiking trip. Treatment with topical hydrocortisone 1% did not help. No data is evaluated. A diagnosis of acute rhus dermatitis of the left wrist is made, and betamethasone cream is prescribed.

Because the physical examination of the body part (left arm) is included in the procedure’s global surgical package, the examination of the left wrist cannot be used as coding support for the E/M service. This makes a difference for coding level in the prior E/M coding requirements, which required examination bullet points. However, with the 2021 E/M codes, documentation of physical examination bullet points is irrelevant to the coding level. Therefore, qualifying for a modifier -25 claim is more straightforward in this case with the new code set. Because bullet points are not integral to the 2021 E/M codes, qualifying and properly documenting for a higher level of service will likely be more common in dermatology.

Final Thoughts

Frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of minor procedures and E/M services allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. The new E/M codes for 2021 actually make the documentation of a separate and distinct E/M service less complicated because the bullet point requirements associated with the old E/M codes have been eliminated. Understanding how the new E/M code descriptors affect modifier -25 reporting and clear documentation of separate, distinct, and medically necessary E/M services will be needed due to increased insurer scrutiny and audits.

I have written previously about Current Procedural Terminology (CPT) procedure codes submitted on the same date of service as evaluation and management (E/M) services in the context of modifier -25.¹ Billing same-day procedures and E/M services is under close scrutiny by insurers, and accurate and complete documentation is a must.² An understanding of what aspects of evaluation are included in the global surgical package is critical in deciding whether a separate and distinct same-day evaluation was performed. In general, the decision to perform a procedure is included in the payment for the procedure itself, as is the examination of the body site in question, diagnosis of the medical condition, discussion of treatment options, and postoperative services related to the procedure. This is true for CPT codes that contain physician work, which constitute the majority of CPT codes reported by dermatologists.³

However, there is one set of codes where these principles do not apply: the practice expense (PE)–only codes, or no physician work codes. These codes are defined by CPT and the Relative Value Scale Update Committee (RUC) of the American Medical Association as containing no physician work. Their valuations are based only on staff/nursing time and the other aspects of direct and indirect practice costs included in providing the service, such as gauze, sutures, equipment, office rent, and utilities.⁴ Examples of PE-only codes include the nonphysician-performed photodynamic therapy code 96567; phototherapy codes 96900, 96910, and 96912; and patch testing and photopatch testing codes 95044, 95052, and 95056.

For PE-only codes, only the provision of the service by staff is included in the code reimbursement; there is no physician time or work built into these codes. Thus, neither the initial evaluation of the patient by the physician, the decision to perform the procedure, nor the evaluation of therapy effectiveness or side effects or interpretation of the results is included. Understanding that there is no physician involvement in PE-only codes is critical in deciding whether an E/M service should be billed on the same day as a PE-only code. To that end, although a physician does not actually have to personally evaluate the patient on the day of service to bill PE-only codes, the Centers for Medicare & Medicaid Services has indicated that a physician or qualified medical provider must be on premises.⁵ Billing for PE-only services when no provider is present will be interpreted as a false claim or fraudulent billing practice.

Because PE-only codes do not include physician work, an E/M service will be billed in addition to the treatment almost any time a same-day physician evaluation is performed. For example, if a patient presents with a changing mole that is evaluated on the same date of service as phototherapy for the treatment of psoriasis, that service is clearly reportable with an E/M code because the mole check is separate and distinct from the phototherapy treatment. A more common scenario is for the physician to see a patient with a rash consistent with an allergic contact dermatitis and the decision to perform same-day patch testing is made. In this circumstance, the E/M service is still reportable because the evaluation of the rash and the decision to perform patch testing are not included in this PE-only code.

Phototherapy typically is provided as a prolonged course of multiple treatments, and reporting of same-day E/M services during the course of therapy is common. Phototherapy must be monitored by the physician for clinical effectiveness, dose changes, and side effects, as well as to determine whether to continue therapy. A standard operating procedure should be created to document that the physician typically evaluates the patient’s progress at set intervals or as dictated by patient or staff concerns. Reporting an E/M service with every phototherapy session is not considered medically necessary. Moreover, a nurse evaluation of the patient prior to each phototherapy treatment, including questions on disease severity, how the patient did with the last treatment, and whether medications have changed, is included in the payment for the phototherapy codes. Only formal and medically necessary physician E/M services should be billed, not drive-by visits in which the physician pops in just to see how the patient is doing.

Final Thoughts

Practice expense–only codes include no payment for physician time or work but require the presence of a qualified health care provider on premises to bill. Medically necessary physician evaluations on the same day as PE-only services will typically result in both an E/M service and the procedure being reported. Understanding performance and documentation requirements of PE-only codes is critical for proper reimbursement for a dermatology practice.

I have written previously about Current Procedural Terminology (CPT) procedure codes submitted on the same date of service as evaluation and management (E/M) services in the context of modifier -25.¹ Billing same-day procedures and E/M services is under close scrutiny by insurers, and accurate and complete documentation is a must.² An understanding of what aspects of evaluation are included in the global surgical package is critical in deciding whether a separate and distinct same-day evaluation was performed. In general, the decision to perform a procedure is included in the payment for the procedure itself, as is the examination of the body site in question, diagnosis of the medical condition, discussion of treatment options, and postoperative services related to the procedure. This is true for CPT codes that contain physician work, which constitute the majority of CPT codes reported by dermatologists.³

However, there is one set of codes where these principles do not apply: the practice expense (PE)–only codes, or no physician work codes. These codes are defined by CPT and the Relative Value Scale Update Committee (RUC) of the American Medical Association as containing no physician work. Their valuations are based only on staff/nursing time and the other aspects of direct and indirect practice costs included in providing the service, such as gauze, sutures, equipment, office rent, and utilities.⁴ Examples of PE-only codes include the nonphysician-performed photodynamic therapy code 96567; phototherapy codes 96900, 96910, and 96912; and patch testing and photopatch testing codes 95044, 95052, and 95056.

For PE-only codes, only the provision of the service by staff is included in the code reimbursement; there is no physician time or work built into these codes. Thus, neither the initial evaluation of the patient by the physician, the decision to perform the procedure, nor the evaluation of therapy effectiveness or side effects or interpretation of the results is included. Understanding that there is no physician involvement in PE-only codes is critical in deciding whether an E/M service should be billed on the same day as a PE-only code. To that end, although a physician does not actually have to personally evaluate the patient on the day of service to bill PE-only codes, the Centers for Medicare & Medicaid Services has indicated that a physician or qualified medical provider must be on premises.⁵ Billing for PE-only services when no provider is present will be interpreted as a false claim or fraudulent billing practice.

Because PE-only codes do not include physician work, an E/M service will be billed in addition to the treatment almost any time a same-day physician evaluation is performed. For example, if a patient presents with a changing mole that is evaluated on the same date of service as phototherapy for the treatment of psoriasis, that service is clearly reportable with an E/M code because the mole check is separate and distinct from the phototherapy treatment. A more common scenario is for the physician to see a patient with a rash consistent with an allergic contact dermatitis and the decision to perform same-day patch testing is made. In this circumstance, the E/M service is still reportable because the evaluation of the rash and the decision to perform patch testing are not included in this PE-only code.

Phototherapy typically is provided as a prolonged course of multiple treatments, and reporting of same-day E/M services during the course of therapy is common. Phototherapy must be monitored by the physician for clinical effectiveness, dose changes, and side effects, as well as to determine whether to continue therapy. A standard operating procedure should be created to document that the physician typically evaluates the patient’s progress at set intervals or as dictated by patient or staff concerns. Reporting an E/M service with every phototherapy session is not considered medically necessary. Moreover, a nurse evaluation of the patient prior to each phototherapy treatment, including questions on disease severity, how the patient did with the last treatment, and whether medications have changed, is included in the payment for the phototherapy codes. Only formal and medically necessary physician E/M services should be billed, not drive-by visits in which the physician pops in just to see how the patient is doing.

Final Thoughts

Practice expense–only codes include no payment for physician time or work but require the presence of a qualified health care provider on premises to bill. Medically necessary physician evaluations on the same day as PE-only services will typically result in both an E/M service and the procedure being reported. Understanding performance and documentation requirements of PE-only codes is critical for proper reimbursement for a dermatology practice.

I have written previously about Current Procedural Terminology (CPT) procedure codes submitted on the same date of service as evaluation and management (E/M) services in the context of modifier -25.¹ Billing same-day procedures and E/M services is under close scrutiny by insurers, and accurate and complete documentation is a must.² An understanding of what aspects of evaluation are included in the global surgical package is critical in deciding whether a separate and distinct same-day evaluation was performed. In general, the decision to perform a procedure is included in the payment for the procedure itself, as is the examination of the body site in question, diagnosis of the medical condition, discussion of treatment options, and postoperative services related to the procedure. This is true for CPT codes that contain physician work, which constitute the majority of CPT codes reported by dermatologists.³

However, there is one set of codes where these principles do not apply: the practice expense (PE)–only codes, or no physician work codes. These codes are defined by CPT and the Relative Value Scale Update Committee (RUC) of the American Medical Association as containing no physician work. Their valuations are based only on staff/nursing time and the other aspects of direct and indirect practice costs included in providing the service, such as gauze, sutures, equipment, office rent, and utilities.⁴ Examples of PE-only codes include the nonphysician-performed photodynamic therapy code 96567; phototherapy codes 96900, 96910, and 96912; and patch testing and photopatch testing codes 95044, 95052, and 95056.

For PE-only codes, only the provision of the service by staff is included in the code reimbursement; there is no physician time or work built into these codes. Thus, neither the initial evaluation of the patient by the physician, the decision to perform the procedure, nor the evaluation of therapy effectiveness or side effects or interpretation of the results is included. Understanding that there is no physician involvement in PE-only codes is critical in deciding whether an E/M service should be billed on the same day as a PE-only code. To that end, although a physician does not actually have to personally evaluate the patient on the day of service to bill PE-only codes, the Centers for Medicare & Medicaid Services has indicated that a physician or qualified medical provider must be on premises.⁵ Billing for PE-only services when no provider is present will be interpreted as a false claim or fraudulent billing practice.

Because PE-only codes do not include physician work, an E/M service will be billed in addition to the treatment almost any time a same-day physician evaluation is performed. For example, if a patient presents with a changing mole that is evaluated on the same date of service as phototherapy for the treatment of psoriasis, that service is clearly reportable with an E/M code because the mole check is separate and distinct from the phototherapy treatment. A more common scenario is for the physician to see a patient with a rash consistent with an allergic contact dermatitis and the decision to perform same-day patch testing is made. In this circumstance, the E/M service is still reportable because the evaluation of the rash and the decision to perform patch testing are not included in this PE-only code.

Phototherapy typically is provided as a prolonged course of multiple treatments, and reporting of same-day E/M services during the course of therapy is common. Phototherapy must be monitored by the physician for clinical effectiveness, dose changes, and side effects, as well as to determine whether to continue therapy. A standard operating procedure should be created to document that the physician typically evaluates the patient’s progress at set intervals or as dictated by patient or staff concerns. Reporting an E/M service with every phototherapy session is not considered medically necessary. Moreover, a nurse evaluation of the patient prior to each phototherapy treatment, including questions on disease severity, how the patient did with the last treatment, and whether medications have changed, is included in the payment for the phototherapy codes. Only formal and medically necessary physician E/M services should be billed, not drive-by visits in which the physician pops in just to see how the patient is doing.

Final Thoughts

Practice expense–only codes include no payment for physician time or work but require the presence of a qualified health care provider on premises to bill. Medically necessary physician evaluations on the same day as PE-only services will typically result in both an E/M service and the procedure being reported. Understanding performance and documentation requirements of PE-only codes is critical for proper reimbursement for a dermatology practice.

On February 23, 2018, Anthem Insurance Companies, Inc, announced the reversal of its proposed policy to reduce reimbursement for evaluation and management (E/M) services billed using modifier -25.¹ This win for physicians was the result of a broad-based, multipronged advocacy campaign, and the American Academy of Dermatology Association (AADA) was critical to this victory.

Dermatology Took the Lead in Opposing Policy That Would Reduce Reimbursement

Dermatology was the first to trumpet the dangers of modifier -25 reduction policies and explain why other specialty societies should care. The AADA took the lead in assembling a coalition of physician groups to oppose the proposed policy by sharing language for opposition letters and meeting talking points with many societies outside of dermatology as well as producing the first draft for the American Medical Association (AMA) House of Delegates’ resolution that spurred action against Anthem’s proposed policy.² Members of the AADA attended numerous conference calls and in-person meetings with health insurance officials to urge them to reverse the policy and helped coordinate opposition from state and national specialty societies. The influence and advocacy of the AMA was critical in reversing the proposed policy, but dermatology started the opposition and organized the players to bring the fight against Anthem.

AADA Continues to Fight

Despite the victory against Anthem, challenges to fair reimbursement of modifier -25 claims are ongoing. Two insurers recently announced implementation of new modifier -25 reduction policies.^3,4 Moreover, 4 other insurers have existing modifier -25 reduction policies in place.^5-8 The AADA has engaged, and will continue engaging, each of these insurers with the message that the ability to perform procedures and distinct E/M services on the same day is integral to efficient, patient-centered care of dermatologic diseases. The AADA argues that insurers’ rationale (overlapping indirect practice expenses) for payment reduction is improper and that appropriately documented modifier -25 claims should be reimbursed at 100% of allowable charges.

In addition to the existing insurer policies affecting modifier -25, Anthem has announced that it plans to conduct audits of modifier -25 claims with recoupments of inappropriate charges.¹ Some Medicare Administrative Contractors also have cited modifier -25 as an area of concern and issued guidelines for reporting modifier -25, which frequently precede audits.⁹ The AADA is concerned that if Anthem follows through with its aggressive audits to recoup money, which can result in substantial take-backs, and finds a high error rate in modifier -25 claims, it also may consider revisiting its reduction policy. Moreover, it is likely that other insurers will use failed modifier -25 audits as an excuse to continue, expand, or adopt modifier -25 reduction policies. It is clear that blanket reduction in payment is much easier and less expensive for insurers than auditing medical records and not paying those who abuse modifier -25. As long as insurers are under financial pressure, modifier -25 will be a tempting target for reducing health care costs.

How to Use Modifier -25 Correctly

In addition to opposing inappropriate reimbursement of modifier -25, the AADA is committed to educating its members and insurers on the correct use and documentation of modifier -25. In December 2017, Mollie A. MacCormack, MD (Nashua, New Hampshire), and I led an educational webinar on modifier -25 for more than 1100 attendees.¹⁰ We discussed the performance standards and documentation requirements of modifier -25. It was clear that dermatologists were interested not only in the correct coding of modifier -25 claims but also avoiding the consequences of audits.

My peers frequently ask, “What can we [dermatologists] do to prepare for potential modifier -25 audits?” My advice is always, “Physician audit thyself.” I recommend self-auditing to make sure you and your practice are in compliance with modifier -25 documentation requirements. In a March 2017 Cutis column on modifier -25, I discussed what constitutes separate and distinct E/M services and what is included in a procedure’s global surgical package.¹¹ A self-audit is as simple as pulling 10 to 20 medical records in which a same-day procedure and E/M service were billed. Cross out any information in the note included in the procedure’s global surgical package including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options. If complete documentation for an E/M is still present after removing the procedure and associated evaluation, you have passed the self-audit. If not, consider changing your coding to better reflect the documentation in your records. In my experience, insurance auditors are not physicians and often are not even medical professionals. Clear documentation and clear existence of a separate, distinct, and medically necessary E/M service is needed to succeed in a modifier -25 audit.

Final Thoughts

Dermatologists should rejoice that Anthem decided to rescind its modifier -25 policy. If this policy had gone into effect, the modifier -25 reduction would likely have spread to most other insurers as industry standard. This victory certainly shows what can be accomplished when organized medicine works together. Your state dermatology and medical societies, national societies, and the AMA collaborated on a critical existential threat to cost-effective and efficient patient care and won. These organizations deserve your membership and support as well as your thanks; however, our celebration must be short-lived, as there still are other insurers with modifier -25 reductions in place, and audits have been promised. We must continue to focus on proper use and documentation of modifier -25. This effort will not only help dermatologists decrease the risk of large recoupments from audits but also help the AADA continue to oppose inappropriate payment policies.

On February 23, 2018, Anthem Insurance Companies, Inc, announced the reversal of its proposed policy to reduce reimbursement for evaluation and management (E/M) services billed using modifier -25.¹ This win for physicians was the result of a broad-based, multipronged advocacy campaign, and the American Academy of Dermatology Association (AADA) was critical to this victory.

Dermatology Took the Lead in Opposing Policy That Would Reduce Reimbursement

Dermatology was the first to trumpet the dangers of modifier -25 reduction policies and explain why other specialty societies should care. The AADA took the lead in assembling a coalition of physician groups to oppose the proposed policy by sharing language for opposition letters and meeting talking points with many societies outside of dermatology as well as producing the first draft for the American Medical Association (AMA) House of Delegates’ resolution that spurred action against Anthem’s proposed policy.² Members of the AADA attended numerous conference calls and in-person meetings with health insurance officials to urge them to reverse the policy and helped coordinate opposition from state and national specialty societies. The influence and advocacy of the AMA was critical in reversing the proposed policy, but dermatology started the opposition and organized the players to bring the fight against Anthem.

AADA Continues to Fight

Despite the victory against Anthem, challenges to fair reimbursement of modifier -25 claims are ongoing. Two insurers recently announced implementation of new modifier -25 reduction policies.^3,4 Moreover, 4 other insurers have existing modifier -25 reduction policies in place.^5-8 The AADA has engaged, and will continue engaging, each of these insurers with the message that the ability to perform procedures and distinct E/M services on the same day is integral to efficient, patient-centered care of dermatologic diseases. The AADA argues that insurers’ rationale (overlapping indirect practice expenses) for payment reduction is improper and that appropriately documented modifier -25 claims should be reimbursed at 100% of allowable charges.

In addition to the existing insurer policies affecting modifier -25, Anthem has announced that it plans to conduct audits of modifier -25 claims with recoupments of inappropriate charges.¹ Some Medicare Administrative Contractors also have cited modifier -25 as an area of concern and issued guidelines for reporting modifier -25, which frequently precede audits.⁹ The AADA is concerned that if Anthem follows through with its aggressive audits to recoup money, which can result in substantial take-backs, and finds a high error rate in modifier -25 claims, it also may consider revisiting its reduction policy. Moreover, it is likely that other insurers will use failed modifier -25 audits as an excuse to continue, expand, or adopt modifier -25 reduction policies. It is clear that blanket reduction in payment is much easier and less expensive for insurers than auditing medical records and not paying those who abuse modifier -25. As long as insurers are under financial pressure, modifier -25 will be a tempting target for reducing health care costs.

How to Use Modifier -25 Correctly

In addition to opposing inappropriate reimbursement of modifier -25, the AADA is committed to educating its members and insurers on the correct use and documentation of modifier -25. In December 2017, Mollie A. MacCormack, MD (Nashua, New Hampshire), and I led an educational webinar on modifier -25 for more than 1100 attendees.¹⁰ We discussed the performance standards and documentation requirements of modifier -25. It was clear that dermatologists were interested not only in the correct coding of modifier -25 claims but also avoiding the consequences of audits.

My peers frequently ask, “What can we [dermatologists] do to prepare for potential modifier -25 audits?” My advice is always, “Physician audit thyself.” I recommend self-auditing to make sure you and your practice are in compliance with modifier -25 documentation requirements. In a March 2017 Cutis column on modifier -25, I discussed what constitutes separate and distinct E/M services and what is included in a procedure’s global surgical package.¹¹ A self-audit is as simple as pulling 10 to 20 medical records in which a same-day procedure and E/M service were billed. Cross out any information in the note included in the procedure’s global surgical package including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options. If complete documentation for an E/M is still present after removing the procedure and associated evaluation, you have passed the self-audit. If not, consider changing your coding to better reflect the documentation in your records. In my experience, insurance auditors are not physicians and often are not even medical professionals. Clear documentation and clear existence of a separate, distinct, and medically necessary E/M service is needed to succeed in a modifier -25 audit.

Final Thoughts

Dermatologists should rejoice that Anthem decided to rescind its modifier -25 policy. If this policy had gone into effect, the modifier -25 reduction would likely have spread to most other insurers as industry standard. This victory certainly shows what can be accomplished when organized medicine works together. Your state dermatology and medical societies, national societies, and the AMA collaborated on a critical existential threat to cost-effective and efficient patient care and won. These organizations deserve your membership and support as well as your thanks; however, our celebration must be short-lived, as there still are other insurers with modifier -25 reductions in place, and audits have been promised. We must continue to focus on proper use and documentation of modifier -25. This effort will not only help dermatologists decrease the risk of large recoupments from audits but also help the AADA continue to oppose inappropriate payment policies.

On February 23, 2018, Anthem Insurance Companies, Inc, announced the reversal of its proposed policy to reduce reimbursement for evaluation and management (E/M) services billed using modifier -25.¹ This win for physicians was the result of a broad-based, multipronged advocacy campaign, and the American Academy of Dermatology Association (AADA) was critical to this victory.

Dermatology Took the Lead in Opposing Policy That Would Reduce Reimbursement

Dermatology was the first to trumpet the dangers of modifier -25 reduction policies and explain why other specialty societies should care. The AADA took the lead in assembling a coalition of physician groups to oppose the proposed policy by sharing language for opposition letters and meeting talking points with many societies outside of dermatology as well as producing the first draft for the American Medical Association (AMA) House of Delegates’ resolution that spurred action against Anthem’s proposed policy.² Members of the AADA attended numerous conference calls and in-person meetings with health insurance officials to urge them to reverse the policy and helped coordinate opposition from state and national specialty societies. The influence and advocacy of the AMA was critical in reversing the proposed policy, but dermatology started the opposition and organized the players to bring the fight against Anthem.

AADA Continues to Fight

Despite the victory against Anthem, challenges to fair reimbursement of modifier -25 claims are ongoing. Two insurers recently announced implementation of new modifier -25 reduction policies.^3,4 Moreover, 4 other insurers have existing modifier -25 reduction policies in place.^5-8 The AADA has engaged, and will continue engaging, each of these insurers with the message that the ability to perform procedures and distinct E/M services on the same day is integral to efficient, patient-centered care of dermatologic diseases. The AADA argues that insurers’ rationale (overlapping indirect practice expenses) for payment reduction is improper and that appropriately documented modifier -25 claims should be reimbursed at 100% of allowable charges.

In addition to the existing insurer policies affecting modifier -25, Anthem has announced that it plans to conduct audits of modifier -25 claims with recoupments of inappropriate charges.¹ Some Medicare Administrative Contractors also have cited modifier -25 as an area of concern and issued guidelines for reporting modifier -25, which frequently precede audits.⁹ The AADA is concerned that if Anthem follows through with its aggressive audits to recoup money, which can result in substantial take-backs, and finds a high error rate in modifier -25 claims, it also may consider revisiting its reduction policy. Moreover, it is likely that other insurers will use failed modifier -25 audits as an excuse to continue, expand, or adopt modifier -25 reduction policies. It is clear that blanket reduction in payment is much easier and less expensive for insurers than auditing medical records and not paying those who abuse modifier -25. As long as insurers are under financial pressure, modifier -25 will be a tempting target for reducing health care costs.

How to Use Modifier -25 Correctly

In addition to opposing inappropriate reimbursement of modifier -25, the AADA is committed to educating its members and insurers on the correct use and documentation of modifier -25. In December 2017, Mollie A. MacCormack, MD (Nashua, New Hampshire), and I led an educational webinar on modifier -25 for more than 1100 attendees.¹⁰ We discussed the performance standards and documentation requirements of modifier -25. It was clear that dermatologists were interested not only in the correct coding of modifier -25 claims but also avoiding the consequences of audits.

My peers frequently ask, “What can we [dermatologists] do to prepare for potential modifier -25 audits?” My advice is always, “Physician audit thyself.” I recommend self-auditing to make sure you and your practice are in compliance with modifier -25 documentation requirements. In a March 2017 Cutis column on modifier -25, I discussed what constitutes separate and distinct E/M services and what is included in a procedure’s global surgical package.¹¹ A self-audit is as simple as pulling 10 to 20 medical records in which a same-day procedure and E/M service were billed. Cross out any information in the note included in the procedure’s global surgical package including history associated with establishing the diagnosis, physical examination of the procedure area(s), and discussion of treatment options. If complete documentation for an E/M is still present after removing the procedure and associated evaluation, you have passed the self-audit. If not, consider changing your coding to better reflect the documentation in your records. In my experience, insurance auditors are not physicians and often are not even medical professionals. Clear documentation and clear existence of a separate, distinct, and medically necessary E/M service is needed to succeed in a modifier -25 audit.

Final Thoughts

Dermatologists should rejoice that Anthem decided to rescind its modifier -25 policy. If this policy had gone into effect, the modifier -25 reduction would likely have spread to most other insurers as industry standard. This victory certainly shows what can be accomplished when organized medicine works together. Your state dermatology and medical societies, national societies, and the AMA collaborated on a critical existential threat to cost-effective and efficient patient care and won. These organizations deserve your membership and support as well as your thanks; however, our celebration must be short-lived, as there still are other insurers with modifier -25 reductions in place, and audits have been promised. We must continue to focus on proper use and documentation of modifier -25. This effort will not only help dermatologists decrease the risk of large recoupments from audits but also help the AADA continue to oppose inappropriate payment policies.

In this era of biologics for psoriasis with ever-increasing effectiveness and safety as well as patients who have less and less time to visit the physician's office, it would seem that the days of in-office UV treatments would be numbered. However, rumors of the demise of phototherapy may be greatly exaggerated. Phototherapy is still one of the safest and most cost-effective treatments for psoriasis and other dermatoses.1 Its use often is a prerequisite for biologic therapy, and it may be the only therapeutic option for certain subsets of patients, such as children, pregnant women, and immunosuppressed patients. Moreover, narrowband UVB technology has breathed new life into phototherapy, with better efficacy and less long-term risk. Although the utilization of psoralen plus UVA (PUVA) light therapy has indeed decreased over the last 2 decades, the use of UVB therapies continues to increase dramatically.²

Phototherapy Codes

There are 4 chief Current Procedural Terminology (CPT) codes for reporting phototherapy services: (1) 96900: actinotherapy (UV light treatment); (2) 96910: photochemotherapy, tar, and UVB (Goeckerman treatment) or petrolatum and UVB; (3) 96912: photochemotherapy and PUVA; and (4) 96913: photochemotherapy (Goeckerman and/or PUVA) for severe photoresponsive dermatoses requiring at least 4 to 8 hours of care under direct supervision of the physician.³

There is lack of specificity of the CPT code descriptions for phototherapy. Moreover, insurer guidance for documentation for phototherapy is vague to nonexistent, and of course whenever the use of any medical service increases, insurer scrutiny is sure to follow. Therefore, it is not surprising that dermatology practices have reported that private insurers as well as Medicare are auditing medical records for phototherapy treatments.⁴ In fact, recently we have seen a Midwest private insurer demand payment from dermatologists for hundreds of 96910 phototherapy services, which the insurer asserted should have been coded as 96900 because topical therapies were not applied by the dermatology staff. The insurer did not just evaluate medical records but also contacted patients directly and asked how services had been provided. Clearly, more detailed guidance for dermatologists and insurers on documentation and performance standards for each phototherapy service is needed.

Existing coding guidance for phototherapy indicates that actinotherapy (96900) defines the basic service of treating a patient with a UV light unit.⁵ Actinotherapy does not involve application of topical medications while the patient is in the office.

In contrast, photochemotherapy (96910) implies addition of a chemo agent to phototherapy. Despite the somewhat nonspecific nature of the code descriptor, it is apparent that application of photoenhancing agents such as tar, petrolatum, or distillates of petrolatum meet the requirements of 96910. The Coder's Desk Reference for Procedures 2017 describes 96910 as "the physician uses photosensitizing chemicals and light rays to treat skin ailments."⁶ Application of light-enhancing topical products should occur within the office by either staff or the patient. In fact, examination of practice expense data from the Centers for Medicare & Medicaid Services indicated that the 96910 code includes payment for clinical staff time to apply topical products as well as the cost of the topical agent(s).⁷ 

The PUVA code 96912 is defined by the use of photosensitizing psoralen medication, which can be administered topically or orally, followed by UVA treatment. In my experience, PUVA has similar performance standards with in-office application of psoralen, if applicable. If application of topical photoenhancing products occurs outside the office, the requirements of photochemotherapy are not met, and 96900 should be reported. 

The 96913 code defines prolonged phototherapy service with intensive topical therapy requirements and multiple phototherapy sessions per day.³ This code is rarely reported (average of fewer than 100 times in the Medicare population per year), and most insurers do not reimburse this service. 

Protecting Yourself From an Audit

In my experience, review of private insurer audits of phototherapy services has yielded important lessons. First, having a written standard operating procedure in place regarding the performance of phototherapy services and how application of topicals will be handled has been helpful in audit defense. The other key to beating audits for phototherapy services is to have detailed documentation or a flowchart in the medical record regarding the topical agent and the light administration. The medical record should include what topical agent was applied, if any; whether the topical agent was applied in the office; where the topical product was applied; and who applied the topical product. Sometimes topical product application by a physician or staff is not feasible because of patient preference or the site of application. If the patient applied the topical, document that assistance was offered and refused, along with what type of UV light was used and the dosage. Inclusion of these elements in the medical record provides a clear picture of the delivery of the phototherapy service and will aid in responding to medical record audit.

Final Thoughts

Phototherapy is a critical treatment modality that continues to be utilized frequently in the expanding armamentarium of treatments for dermatoses. Phototherapy is performed almost exclusively by dermatologists and allows dermatologists to offer a unique level of care and value in the treatment of skin disease. Careful documentation, a written standard operating procedure, and adherence to proper performance standards will allow dermatologists to be compensated fairly for this important treatment modality and pass audits that are likely to occur.

In this era of biologics for psoriasis with ever-increasing effectiveness and safety as well as patients who have less and less time to visit the physician's office, it would seem that the days of in-office UV treatments would be numbered. However, rumors of the demise of phototherapy may be greatly exaggerated. Phototherapy is still one of the safest and most cost-effective treatments for psoriasis and other dermatoses.1 Its use often is a prerequisite for biologic therapy, and it may be the only therapeutic option for certain subsets of patients, such as children, pregnant women, and immunosuppressed patients. Moreover, narrowband UVB technology has breathed new life into phototherapy, with better efficacy and less long-term risk. Although the utilization of psoralen plus UVA (PUVA) light therapy has indeed decreased over the last 2 decades, the use of UVB therapies continues to increase dramatically.²

Phototherapy Codes

There are 4 chief Current Procedural Terminology (CPT) codes for reporting phototherapy services: (1) 96900: actinotherapy (UV light treatment); (2) 96910: photochemotherapy, tar, and UVB (Goeckerman treatment) or petrolatum and UVB; (3) 96912: photochemotherapy and PUVA; and (4) 96913: photochemotherapy (Goeckerman and/or PUVA) for severe photoresponsive dermatoses requiring at least 4 to 8 hours of care under direct supervision of the physician.³

There is lack of specificity of the CPT code descriptions for phototherapy. Moreover, insurer guidance for documentation for phototherapy is vague to nonexistent, and of course whenever the use of any medical service increases, insurer scrutiny is sure to follow. Therefore, it is not surprising that dermatology practices have reported that private insurers as well as Medicare are auditing medical records for phototherapy treatments.⁴ In fact, recently we have seen a Midwest private insurer demand payment from dermatologists for hundreds of 96910 phototherapy services, which the insurer asserted should have been coded as 96900 because topical therapies were not applied by the dermatology staff. The insurer did not just evaluate medical records but also contacted patients directly and asked how services had been provided. Clearly, more detailed guidance for dermatologists and insurers on documentation and performance standards for each phototherapy service is needed.

Existing coding guidance for phototherapy indicates that actinotherapy (96900) defines the basic service of treating a patient with a UV light unit.⁵ Actinotherapy does not involve application of topical medications while the patient is in the office.

In contrast, photochemotherapy (96910) implies addition of a chemo agent to phototherapy. Despite the somewhat nonspecific nature of the code descriptor, it is apparent that application of photoenhancing agents such as tar, petrolatum, or distillates of petrolatum meet the requirements of 96910. The Coder's Desk Reference for Procedures 2017 describes 96910 as "the physician uses photosensitizing chemicals and light rays to treat skin ailments."⁶ Application of light-enhancing topical products should occur within the office by either staff or the patient. In fact, examination of practice expense data from the Centers for Medicare & Medicaid Services indicated that the 96910 code includes payment for clinical staff time to apply topical products as well as the cost of the topical agent(s).⁷ 

The PUVA code 96912 is defined by the use of photosensitizing psoralen medication, which can be administered topically or orally, followed by UVA treatment. In my experience, PUVA has similar performance standards with in-office application of psoralen, if applicable. If application of topical photoenhancing products occurs outside the office, the requirements of photochemotherapy are not met, and 96900 should be reported. 

The 96913 code defines prolonged phototherapy service with intensive topical therapy requirements and multiple phototherapy sessions per day.³ This code is rarely reported (average of fewer than 100 times in the Medicare population per year), and most insurers do not reimburse this service. 

Protecting Yourself From an Audit

In my experience, review of private insurer audits of phototherapy services has yielded important lessons. First, having a written standard operating procedure in place regarding the performance of phototherapy services and how application of topicals will be handled has been helpful in audit defense. The other key to beating audits for phototherapy services is to have detailed documentation or a flowchart in the medical record regarding the topical agent and the light administration. The medical record should include what topical agent was applied, if any; whether the topical agent was applied in the office; where the topical product was applied; and who applied the topical product. Sometimes topical product application by a physician or staff is not feasible because of patient preference or the site of application. If the patient applied the topical, document that assistance was offered and refused, along with what type of UV light was used and the dosage. Inclusion of these elements in the medical record provides a clear picture of the delivery of the phototherapy service and will aid in responding to medical record audit.

Final Thoughts

Phototherapy is a critical treatment modality that continues to be utilized frequently in the expanding armamentarium of treatments for dermatoses. Phototherapy is performed almost exclusively by dermatologists and allows dermatologists to offer a unique level of care and value in the treatment of skin disease. Careful documentation, a written standard operating procedure, and adherence to proper performance standards will allow dermatologists to be compensated fairly for this important treatment modality and pass audits that are likely to occur.

In this era of biologics for psoriasis with ever-increasing effectiveness and safety as well as patients who have less and less time to visit the physician's office, it would seem that the days of in-office UV treatments would be numbered. However, rumors of the demise of phototherapy may be greatly exaggerated. Phototherapy is still one of the safest and most cost-effective treatments for psoriasis and other dermatoses.1 Its use often is a prerequisite for biologic therapy, and it may be the only therapeutic option for certain subsets of patients, such as children, pregnant women, and immunosuppressed patients. Moreover, narrowband UVB technology has breathed new life into phototherapy, with better efficacy and less long-term risk. Although the utilization of psoralen plus UVA (PUVA) light therapy has indeed decreased over the last 2 decades, the use of UVB therapies continues to increase dramatically.²

Phototherapy Codes

There are 4 chief Current Procedural Terminology (CPT) codes for reporting phototherapy services: (1) 96900: actinotherapy (UV light treatment); (2) 96910: photochemotherapy, tar, and UVB (Goeckerman treatment) or petrolatum and UVB; (3) 96912: photochemotherapy and PUVA; and (4) 96913: photochemotherapy (Goeckerman and/or PUVA) for severe photoresponsive dermatoses requiring at least 4 to 8 hours of care under direct supervision of the physician.³

There is lack of specificity of the CPT code descriptions for phototherapy. Moreover, insurer guidance for documentation for phototherapy is vague to nonexistent, and of course whenever the use of any medical service increases, insurer scrutiny is sure to follow. Therefore, it is not surprising that dermatology practices have reported that private insurers as well as Medicare are auditing medical records for phototherapy treatments.⁴ In fact, recently we have seen a Midwest private insurer demand payment from dermatologists for hundreds of 96910 phototherapy services, which the insurer asserted should have been coded as 96900 because topical therapies were not applied by the dermatology staff. The insurer did not just evaluate medical records but also contacted patients directly and asked how services had been provided. Clearly, more detailed guidance for dermatologists and insurers on documentation and performance standards for each phototherapy service is needed.

Existing coding guidance for phototherapy indicates that actinotherapy (96900) defines the basic service of treating a patient with a UV light unit.⁵ Actinotherapy does not involve application of topical medications while the patient is in the office.

In contrast, photochemotherapy (96910) implies addition of a chemo agent to phototherapy. Despite the somewhat nonspecific nature of the code descriptor, it is apparent that application of photoenhancing agents such as tar, petrolatum, or distillates of petrolatum meet the requirements of 96910. The Coder's Desk Reference for Procedures 2017 describes 96910 as "the physician uses photosensitizing chemicals and light rays to treat skin ailments."⁶ Application of light-enhancing topical products should occur within the office by either staff or the patient. In fact, examination of practice expense data from the Centers for Medicare & Medicaid Services indicated that the 96910 code includes payment for clinical staff time to apply topical products as well as the cost of the topical agent(s).⁷ 

The PUVA code 96912 is defined by the use of photosensitizing psoralen medication, which can be administered topically or orally, followed by UVA treatment. In my experience, PUVA has similar performance standards with in-office application of psoralen, if applicable. If application of topical photoenhancing products occurs outside the office, the requirements of photochemotherapy are not met, and 96900 should be reported. 

The 96913 code defines prolonged phototherapy service with intensive topical therapy requirements and multiple phototherapy sessions per day.³ This code is rarely reported (average of fewer than 100 times in the Medicare population per year), and most insurers do not reimburse this service. 

Protecting Yourself From an Audit

In my experience, review of private insurer audits of phototherapy services has yielded important lessons. First, having a written standard operating procedure in place regarding the performance of phototherapy services and how application of topicals will be handled has been helpful in audit defense. The other key to beating audits for phototherapy services is to have detailed documentation or a flowchart in the medical record regarding the topical agent and the light administration. The medical record should include what topical agent was applied, if any; whether the topical agent was applied in the office; where the topical product was applied; and who applied the topical product. Sometimes topical product application by a physician or staff is not feasible because of patient preference or the site of application. If the patient applied the topical, document that assistance was offered and refused, along with what type of UV light was used and the dosage. Inclusion of these elements in the medical record provides a clear picture of the delivery of the phototherapy service and will aid in responding to medical record audit.

Final Thoughts

Phototherapy is a critical treatment modality that continues to be utilized frequently in the expanding armamentarium of treatments for dermatoses. Phototherapy is performed almost exclusively by dermatologists and allows dermatologists to offer a unique level of care and value in the treatment of skin disease. Careful documentation, a written standard operating procedure, and adherence to proper performance standards will allow dermatologists to be compensated fairly for this important treatment modality and pass audits that are likely to occur.

An established patient comes into your office with a painful new lesion on the hand. He thinks it may be a wart. You take a focused history of the lesion, do a physical examination, and confirm the diagnosis of verruca vulgaris. You discuss treatment options, risks, and the benefits of treatment, as well as the pathophysiology of warts. The decision is made to proceed that same day with cryosurgical destruction, which is performed. You feel that billing both an office visit with an appended modifier -25 and the benign destruction code 17110 is warranted, but your biller says only the procedure should be reported. Who is correct?

Modifier -25 use has come under increased scrutiny by insurers and regulators. There is a perception that this modifier is frequently used inappropriately or unnecessarily. In fact, the Office of Inspector General reported that 35% of claims using modifier -25 that Medicare allowed did not meet the requirements. The Office of Inspector General has recommended that the “[Centers for Medicare & Medicaid Services] should work with carriers to reduce the number of claims submitted using modifier -25” and “include modifier -25 reviews in their medical review strategies.”¹ Translation: More chart reviews and audits! In my discussions with insurer medical directors, they point to the single diagnosis modifier -25 as likely abused and feel that its use in this context is almost never appropriate. Their audits have been focused on this aspect of dermatologists’ coding. In addition, some private insurers have started to discount reimbursement for office visits billed with modifier -25 by 50% to account for the level of perceived overuse.²

The Current Procedural Terminology description of modifier -25 is relatively clear: Modifier -25 is used to facilitate billing of evaluation and management (E/M) services on the day of a procedure for which separate payment may be made.³ This modifier indicates that a significant, separately identifiable E/M service was performed by the same physician on the day of a procedure. To appropriately bill both the E/M service and the procedure, the physician must indicate that the patient’s condition required an E/M service “above and beyond the usual pre- and post-operative work of a procedure.”⁴ However, it is largely left up to the physician to decide what constitutes the significant, separately identifiable E/M service.

As dermatologists, we all report modifier -25 appropriately as part of our daily practice. Performance of a medically necessary procedure on the same day as an E/M service generally is done to facilitate a prompt diagnosis or streamline treatment of a complex condition. Providing distinct medically necessary services on the same date allows physicians to provide effective and efficient high-quality care, in many cases saving patients a return visit. The most common scenario for using modifier -25 involves multiple concerns and multiple diagnoses, some of which are not associated with a procedure(s) that is performed on the same date of service. With multiple diagnoses, it is straightforward to demonstrate the separate E/M service associated with the nonprocedure-related diagnosis code(s); however, with one diagnosis for both the office visit and the procedure, clear documentation of the separate and identifiable E/M service is critical and is dependent on understanding what is included in the global surgical package.

Insurer payment for procedures includes local or topical anesthesia, the surgical service/procedure itself, immediate postoperative care including dictating the operative note, meeting/discussing the patient’s procedure with family and other physicians, evaluating the patient in postanesthesia/recovery area, and writing orders for the patient. This group of services is called the global surgical package. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M associated with the decision to perform surgery. An appropriate history and physical examination, as well as the discussion of differential diagnosis, treatment options, and risk and benefits of treatments, are all included in the payment of a minor procedure itself. Therefore, if an E/M service is performed on the same day as a minor procedure to decide whether to proceed with the minor surgical procedure, this E/M service cannot be separately reported. Moreover, the fact that the patient is new to the physician is not sufficient to allow reporting of an E/M service with such a minor procedure. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

Therefore, it is clear that the clinical scenario for verruca vulgaris treatment as described at the start of this article does not meet criteria for an office visit billed in addition to the destruction. The E/M services performed prior to the patient’s verruca vulgaris treatment are integral to and necessary for the decision to perform the procedure. Making and confirming the diagnosis of a condition or lesion prior to a procedure either by physical evaluation or by interpretation of a pathology report is part of the evaluation required to make the decision to proceed with a particular procedure.

There are clinical scenarios in which a physician can support additional E/M services beyond that of the procedure with just one diagnosis. If a patient presents with warts on the hand and face with resultant cryosurgical destruction done on the hand and a prescription for imiquimod to be used on the face to induce immunologic clearance of viral infection and decrease the risk of scarring, it is clear that a significant and separately identifiable E/M service exists. The evaluation of the facial warts and the prescription of medication and discussion of the risks, benefits, and therapeutic effects of that prescription is definitely distinct from the procedure. Similarly, if an evaluation of a patient with a rash results in only a diagnostic biopsy with no separate cognitive services other than the decision to perform the biopsy, an office visit charge in addition to the biopsy charge would not be warranted. However, if in addition to the biopsy the rash also is treated with topical or systemic steroids because of pruritus or a more extensive evaluation for systemic complications is required, an office visit charge is appropriate.

The frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of E/M services and minor procedures allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. However, modifier -25 use, particularly in the context of the same diagnosis for the office visit and the procedure, is under intense insurer scrutiny. Careful and complete documentation of the additional E/M service provided, including the additional history, physical examination results, and treatment considerations above and beyond those typically required by the minor procedure, will reduce the likelihood of redeterminations from reviews and audits. Understanding Medicare guidelines and National Correct Coding Initiative recommendations will help keep the dermatologist out of hot water.⁵

An established patient comes into your office with a painful new lesion on the hand. He thinks it may be a wart. You take a focused history of the lesion, do a physical examination, and confirm the diagnosis of verruca vulgaris. You discuss treatment options, risks, and the benefits of treatment, as well as the pathophysiology of warts. The decision is made to proceed that same day with cryosurgical destruction, which is performed. You feel that billing both an office visit with an appended modifier -25 and the benign destruction code 17110 is warranted, but your biller says only the procedure should be reported. Who is correct?

Modifier -25 use has come under increased scrutiny by insurers and regulators. There is a perception that this modifier is frequently used inappropriately or unnecessarily. In fact, the Office of Inspector General reported that 35% of claims using modifier -25 that Medicare allowed did not meet the requirements. The Office of Inspector General has recommended that the “[Centers for Medicare & Medicaid Services] should work with carriers to reduce the number of claims submitted using modifier -25” and “include modifier -25 reviews in their medical review strategies.”¹ Translation: More chart reviews and audits! In my discussions with insurer medical directors, they point to the single diagnosis modifier -25 as likely abused and feel that its use in this context is almost never appropriate. Their audits have been focused on this aspect of dermatologists’ coding. In addition, some private insurers have started to discount reimbursement for office visits billed with modifier -25 by 50% to account for the level of perceived overuse.²

The Current Procedural Terminology description of modifier -25 is relatively clear: Modifier -25 is used to facilitate billing of evaluation and management (E/M) services on the day of a procedure for which separate payment may be made.³ This modifier indicates that a significant, separately identifiable E/M service was performed by the same physician on the day of a procedure. To appropriately bill both the E/M service and the procedure, the physician must indicate that the patient’s condition required an E/M service “above and beyond the usual pre- and post-operative work of a procedure.”⁴ However, it is largely left up to the physician to decide what constitutes the significant, separately identifiable E/M service.

As dermatologists, we all report modifier -25 appropriately as part of our daily practice. Performance of a medically necessary procedure on the same day as an E/M service generally is done to facilitate a prompt diagnosis or streamline treatment of a complex condition. Providing distinct medically necessary services on the same date allows physicians to provide effective and efficient high-quality care, in many cases saving patients a return visit. The most common scenario for using modifier -25 involves multiple concerns and multiple diagnoses, some of which are not associated with a procedure(s) that is performed on the same date of service. With multiple diagnoses, it is straightforward to demonstrate the separate E/M service associated with the nonprocedure-related diagnosis code(s); however, with one diagnosis for both the office visit and the procedure, clear documentation of the separate and identifiable E/M service is critical and is dependent on understanding what is included in the global surgical package.

Insurer payment for procedures includes local or topical anesthesia, the surgical service/procedure itself, immediate postoperative care including dictating the operative note, meeting/discussing the patient’s procedure with family and other physicians, evaluating the patient in postanesthesia/recovery area, and writing orders for the patient. This group of services is called the global surgical package. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M associated with the decision to perform surgery. An appropriate history and physical examination, as well as the discussion of differential diagnosis, treatment options, and risk and benefits of treatments, are all included in the payment of a minor procedure itself. Therefore, if an E/M service is performed on the same day as a minor procedure to decide whether to proceed with the minor surgical procedure, this E/M service cannot be separately reported. Moreover, the fact that the patient is new to the physician is not sufficient to allow reporting of an E/M service with such a minor procedure. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

Therefore, it is clear that the clinical scenario for verruca vulgaris treatment as described at the start of this article does not meet criteria for an office visit billed in addition to the destruction. The E/M services performed prior to the patient’s verruca vulgaris treatment are integral to and necessary for the decision to perform the procedure. Making and confirming the diagnosis of a condition or lesion prior to a procedure either by physical evaluation or by interpretation of a pathology report is part of the evaluation required to make the decision to proceed with a particular procedure.

There are clinical scenarios in which a physician can support additional E/M services beyond that of the procedure with just one diagnosis. If a patient presents with warts on the hand and face with resultant cryosurgical destruction done on the hand and a prescription for imiquimod to be used on the face to induce immunologic clearance of viral infection and decrease the risk of scarring, it is clear that a significant and separately identifiable E/M service exists. The evaluation of the facial warts and the prescription of medication and discussion of the risks, benefits, and therapeutic effects of that prescription is definitely distinct from the procedure. Similarly, if an evaluation of a patient with a rash results in only a diagnostic biopsy with no separate cognitive services other than the decision to perform the biopsy, an office visit charge in addition to the biopsy charge would not be warranted. However, if in addition to the biopsy the rash also is treated with topical or systemic steroids because of pruritus or a more extensive evaluation for systemic complications is required, an office visit charge is appropriate.

The frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of E/M services and minor procedures allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. However, modifier -25 use, particularly in the context of the same diagnosis for the office visit and the procedure, is under intense insurer scrutiny. Careful and complete documentation of the additional E/M service provided, including the additional history, physical examination results, and treatment considerations above and beyond those typically required by the minor procedure, will reduce the likelihood of redeterminations from reviews and audits. Understanding Medicare guidelines and National Correct Coding Initiative recommendations will help keep the dermatologist out of hot water.⁵

An established patient comes into your office with a painful new lesion on the hand. He thinks it may be a wart. You take a focused history of the lesion, do a physical examination, and confirm the diagnosis of verruca vulgaris. You discuss treatment options, risks, and the benefits of treatment, as well as the pathophysiology of warts. The decision is made to proceed that same day with cryosurgical destruction, which is performed. You feel that billing both an office visit with an appended modifier -25 and the benign destruction code 17110 is warranted, but your biller says only the procedure should be reported. Who is correct?

Modifier -25 use has come under increased scrutiny by insurers and regulators. There is a perception that this modifier is frequently used inappropriately or unnecessarily. In fact, the Office of Inspector General reported that 35% of claims using modifier -25 that Medicare allowed did not meet the requirements. The Office of Inspector General has recommended that the “[Centers for Medicare & Medicaid Services] should work with carriers to reduce the number of claims submitted using modifier -25” and “include modifier -25 reviews in their medical review strategies.”¹ Translation: More chart reviews and audits! In my discussions with insurer medical directors, they point to the single diagnosis modifier -25 as likely abused and feel that its use in this context is almost never appropriate. Their audits have been focused on this aspect of dermatologists’ coding. In addition, some private insurers have started to discount reimbursement for office visits billed with modifier -25 by 50% to account for the level of perceived overuse.²

The Current Procedural Terminology description of modifier -25 is relatively clear: Modifier -25 is used to facilitate billing of evaluation and management (E/M) services on the day of a procedure for which separate payment may be made.³ This modifier indicates that a significant, separately identifiable E/M service was performed by the same physician on the day of a procedure. To appropriately bill both the E/M service and the procedure, the physician must indicate that the patient’s condition required an E/M service “above and beyond the usual pre- and post-operative work of a procedure.”⁴ However, it is largely left up to the physician to decide what constitutes the significant, separately identifiable E/M service.

As dermatologists, we all report modifier -25 appropriately as part of our daily practice. Performance of a medically necessary procedure on the same day as an E/M service generally is done to facilitate a prompt diagnosis or streamline treatment of a complex condition. Providing distinct medically necessary services on the same date allows physicians to provide effective and efficient high-quality care, in many cases saving patients a return visit. The most common scenario for using modifier -25 involves multiple concerns and multiple diagnoses, some of which are not associated with a procedure(s) that is performed on the same date of service. With multiple diagnoses, it is straightforward to demonstrate the separate E/M service associated with the nonprocedure-related diagnosis code(s); however, with one diagnosis for both the office visit and the procedure, clear documentation of the separate and identifiable E/M service is critical and is dependent on understanding what is included in the global surgical package.

Insurer payment for procedures includes local or topical anesthesia, the surgical service/procedure itself, immediate postoperative care including dictating the operative note, meeting/discussing the patient’s procedure with family and other physicians, evaluating the patient in postanesthesia/recovery area, and writing orders for the patient. This group of services is called the global surgical package. For minor procedures (ie, those with either 0- or 10-day global periods), the surgical package also includes same-day E/M associated with the decision to perform surgery. An appropriate history and physical examination, as well as the discussion of differential diagnosis, treatment options, and risk and benefits of treatments, are all included in the payment of a minor procedure itself. Therefore, if an E/M service is performed on the same day as a minor procedure to decide whether to proceed with the minor surgical procedure, this E/M service cannot be separately reported. Moreover, the fact that the patient is new to the physician is not sufficient to allow reporting of an E/M service with such a minor procedure. For major procedures (ie, those with 90-day postoperative periods), the decision for surgery is excluded from the global surgical package.

Therefore, it is clear that the clinical scenario for verruca vulgaris treatment as described at the start of this article does not meet criteria for an office visit billed in addition to the destruction. The E/M services performed prior to the patient’s verruca vulgaris treatment are integral to and necessary for the decision to perform the procedure. Making and confirming the diagnosis of a condition or lesion prior to a procedure either by physical evaluation or by interpretation of a pathology report is part of the evaluation required to make the decision to proceed with a particular procedure.

There are clinical scenarios in which a physician can support additional E/M services beyond that of the procedure with just one diagnosis. If a patient presents with warts on the hand and face with resultant cryosurgical destruction done on the hand and a prescription for imiquimod to be used on the face to induce immunologic clearance of viral infection and decrease the risk of scarring, it is clear that a significant and separately identifiable E/M service exists. The evaluation of the facial warts and the prescription of medication and discussion of the risks, benefits, and therapeutic effects of that prescription is definitely distinct from the procedure. Similarly, if an evaluation of a patient with a rash results in only a diagnostic biopsy with no separate cognitive services other than the decision to perform the biopsy, an office visit charge in addition to the biopsy charge would not be warranted. However, if in addition to the biopsy the rash also is treated with topical or systemic steroids because of pruritus or a more extensive evaluation for systemic complications is required, an office visit charge is appropriate.

The frequent use of modifier -25 is a critical part of a high-quality and cost-effective dermatology practice. Same-day performance of E/M services and minor procedures allows for more rapid and efficient diagnosis and treatment of various conditions as well as minimizing unnecessary office visits. However, modifier -25 use, particularly in the context of the same diagnosis for the office visit and the procedure, is under intense insurer scrutiny. Careful and complete documentation of the additional E/M service provided, including the additional history, physical examination results, and treatment considerations above and beyond those typically required by the minor procedure, will reduce the likelihood of redeterminations from reviews and audits. Understanding Medicare guidelines and National Correct Coding Initiative recommendations will help keep the dermatologist out of hot water.⁵