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Response to Private Payer Policy Reimbursing 50% E/M Services Performed with Concurrent Procedure

Response to Private Payer Policy Reimbursing 50% E/M Services Performed with Concurrent Procedure

The American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) is aware of a private payer’s policy to reimburse Evaluation and Management (E/M) services at a 50 percent rate when a significant, separately identifiable E/M service (appended with the 25 modifier) and surgery/diagnostic procedural services are performed on the same day. The AAO-HNS strongly believes this policy is inconsistent with the Centers for Medicare & Medicaid Services’ (CMS) reporting rules and the AMA Current Procedural Terminology (CPT) codes, guidelines, and conventions.

The AAO-HNS realizes payers develop their own reimbursement policies, but those that adopt the resource-based relative value scale (RBRVS) methodology should adhere to those relative values, global surgical periods, use of modifiers, and the National Correct Coding Initiatives (NCCI) edits. Otherwise, physicians are not being reimbursed fairly for the procedures and services they perform. Otolaryngologist- Head and Neck Surgeons must be fully reimbursed for E/M services given the fact they frequently perform such services, especially for new patients, with procedures on the same date of service. Performing both an E/M service along with services, including but not limited to an endoscopy, flexible laryngoscopy, excision of lesion, biopsy, removal of a foreign body, or control of epistaxis, are medically necessary and should be reimbursed accordingly.

As the Medicare Claims Processing Manual, Publication 100-04, Chapter 12, Section 30.6.6, B. reads:

CPT Modifier “-25” –Significant Evaluation and Management Service by Same Physician on Date of Global Procedure

Medicare requires that Current Procedural Terminology (CPT) modifier -25 should only be used on claims for evaluation and management (E/M) services, and only when these services are provided by the same physician (or same qualified nonphysician practitioner) to the same patient on the same day as another procedure or other service. A/B MACs (B) pay for an E/M service provided on the day of a procedure with a global fee period if the physician indicates that the service is for a significant, separately identifiable E/M service that is above and beyond the usual pre- and post-operative work of the procedure. Different diagnoses are not required for reporting the E/M service on the same date as the procedure or other service. Modifier -25 is added to the E/M code on the claim.

Both the medically necessary E/M service and the procedure must be appropriately and sufficiently documented by the physician or qualified nonphysician practitioner in the patient’s medical record to support the claim for these services, even though thedocumentation is not required to be submitted with the claim.


Further, the 2018 AMA CPT Professional Edition Manual states:

“Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Same Day of the Procedure or Other Service: It may be necessary to indicate that on the day a procedure or service identified by a CPT code was performed, the patient’s condition required a significant, separately identifiable E/M service above and beyond the other service provided or beyond the usual preoperative and postoperative care associated with the procedure that was performed. A significant, separately identifiable E/M service is defined or substantiated by documentation that satisfies the relevant criteria for the respective E/M service to be reported (see Evaluation and Management Services Guidelines for instructions on determining the level of E/M service). The E/M service may be prompted by the symptom or condition for which the procedure and/or service was provided. As such, different diagnoses are not required for reporting of the E/M services on the same date. This circumstance may be reported by adding modifier 25 to the appropriate level of E/M service. Note: This modifier is not used to report an E/M service that resulted in the decision to perform surgery.” (Appendix A, page 751)”

Finally, in review of the Medicare Program: Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2018, 42 C.F.R. 53032 (2018), CMS addresses how it has adjusted the work Relative Value Units (RVU) and/or times to account for the overlap between two services:

“In cases where service is typically furnished to a beneficiary on the same day as an evaluation and management (E/M) service, we believe that there is overlap between the two services in some of the activities furnished during the preservice evaluation and postservice time. Our longstanding adjustments have reflected a broad assumption that at least one-third of the work time in both the preservice evaluation and postservice period is duplicative of work furnished during the E/M visit.

…The work RVU for a service is the product of the time involved in furnishing the service multiplied by the intensity of the work. Preservice evaluation time and postservice time both have a long-established intensity of work per unit of time (IWPUT) of 0.0224, which means 1 minute of preservice evaluation or postservice time equates to 0.0224 of a work RVU.

Therefore, in many cases when we have removed 2 minutes of preservice time and 2 minutes of postservice time from a procedure to account for the overlap with the same day E/M service, we have also removed a work RVU of 0.09 (4 minutes x 0.0224 IWPUT) if we have not believed the overlap in time had already been accounted for in the work RVU. The RUC has recognized this valuation policy and, in many cases, now addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service.”

Adopted January 2012

Updated December 2017

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