Physician's Coding Strategist-Confused about modifiers? Don't fret, you're not alone
Have they moved too far from the original intent?
Confusion reigns as providers try to decipher portions of the outpatient prospective payment system (PPS). The Health Care Financing Administration (HCFA) has tried to clarify the use of modifiers, but some analysts say the effort to explain modifier 25 has only made it more controversial.
On July 20, HCFA issued a program memorandum (Transmittal A-00-40) to fiscal intermediaries detailing the correct use of modifier 25. The memo was helpful, says Rita Scichilone, MHSA, RHIA, CCS, CCS-P, coding practice manager at the American Health Information Management Association in Chicago.
"It seemed to tell us that you can attach modifier 25 to just about any E/M [evaluation and management] service that has a procedure connected with it," she says. "The definition of procedure in it is fairly broad. Their examples include EKGs and X-rays."
Previously, Scichilone had thought the modifier could be used only if the medical visit and a surgical procedure for the same session were unrelated and significant and separately identifiable. "That doesn't seem to be the case," she says.
Time for a rethink?
Others are more critical in their assessment.
"HCFA's instructions on how to use modi- fier 25 are very troublesome," says Deborah Williams, senior associate director of policy development for the American Hospital Association in Washington, DC. "About 85% of ER [emergency room] claims have modifier 25 on them, which is not useful. That's the modifier we believe needs significant rethinking."
The program memorandum leaves people guessing, says Laura Frazier, RHIT, manager of APC Solutions for QuadraMed Corp., San Rafael, CA, a health care information systems company. "The most problematic thing about it is that you are supposed to use it for all diagnostic or therapeutic medical or surgical services except for lab services. Why isn't modifier 25 appended to lab services, too, if they are going to apply the modifier across the board?"
A conflict with the AMA?
The memo moved the modifier away from original intent of the American Medical Association (AMA) when it created Current Procedural Terminology (CPT) codes, say Williams and Frazier.
"The AMA is not happy because it feels that HCFA is giving instructions on how to use HCPCS [HCFA Common Procedure Coding System] codes and modifiers in ways that were not intended," Williams says.
"HCFA is losing some consistency," Frazier adds. Modifier 25 now has a completely different application for what it was created for — physician services, she explains. "When [providers] do their billing, it means that they did something besides evaluating the patient, and there is significant documentation to substantiate that.
"HCFA's will-nilly application of [the modifier] is causing a discrepancy between the CPT guidelines for how you use that modifier and the billing guidelines for being compliant with the federal government," Frazier says.
Even though the transmittal does not always agree with the instructions written about the modifier in AMA's publication CPT Assistant, providers should follow HCFA's billing instructions, Frazier says.
As a written document, the transmittal is a superceding authority, she says. "[Providers] have a written document [in the memo]. That protection in writing will keep them from any rift of a fraudulent action taken against them." Frazier says she always instructs her clients to retain access to any written instructions from their fiscal intermediaries.
Providers also need to remember that the rules for using modifier 25 are different for hospitals vs. physicians, Scichilone says. "On the physician side, it is still very restricted. You can only report it when you have separately identifiable services."
For the hospitals, however, HCFA says that any time you make a decision to do a procedure, you can use modifier 25 and be paid for both, she explains. But always remember to include the modifier, she advises. "Otherwise, I think the system is set up to not pay for the E/M."
Modifier 25 . . . in HCFA's words
Here is a summary for use of modifier 25 in association with hospital outpatient services, as published in HCFA's transmittal A-00-40:
• Modifier 25 applies only to E/M service codes and then only when an E/M service was provided on the same date as a diagnostic medical/surgical and/or therapeutic medical/surgical procedure(s). In other words, modifier 25 does not apply when no diagnostic medical/surgical and/or therapeutic medical/surgical procedure(s) is performed.
• It is not necessary that the procedure and the E/M service be provided by the same physician/practitioner for the modifier 25 to apply in the facility setting. It is appropriate to append modifier 25 to the qualifying E/M service code whether the E/M and procedure were provided by the same professional.
• The diagnosis associated with the E/M service does not need to be different than that for which the diagnostic medical/surgical and/or therapeutic medical/surgical procedure(s) was provided.
• It is appropriate to append modifier 25 to emergency department codes 99281-99285 when those services lead to a decision to perform diagnostic medical/surgical and/or therapeutic medical/surgical procedure(s).
(Editor's note: All of HCFA's transmittals are available on its Web site, www.hcfa.gov.)
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