This post is written for coders and medical billing specialists. If you are not in the medical profession, we apologize in advance for the technical jargon. It is necessary to understand this post. If you are a coder, you probably know what a Modifier 25 code is and how it works. Here is a very quick refresher:
Modifier 25 is a significant, separately identifiable evaluation and management (E/M) service by the same physician on the same day of the procedure or other service. It is one of the most often used Current Procedural Terminology (CPT) codes.
Modifier 25 creates the opportunity to capture physician work done when separate E/M services are provided at the time of another E/M visit or procedural service. According to the Office of the Inspector General for Health and Human Services, it is also one of the most abused codes.
Because this post is geared towards helping medical coders, billing specialists and other healthcare providers qualify for whistleblower rewards, our discussion is confined to Medicare, Medicaid and Tricare, however private insurance carriers follow similar rules. (More on that below.)
Medical Billing and CPT Codes
Healthcare providers are required to use CPT codes on their claim submissions to government health insurance programs. These codes are a set of standardized medical codes developed and maintained by the American Medical Association (AMA). CPT codes are used to describe and report medical, surgical and diagnostic procedures and services to public and private health insurance programs for medical billing purposes.
Government funded healthcare programs use CPT codes to determine both coverage, i.e., if the services are covered, and reimbursement, i.e., how much will these program pay for the billed medical procedures and services.
There are thousands of CPT codes and each procedure or service or item furnished to a patient has a specific CPT code. Each CPT code receives a certain level of reimbursement, which can vary depending on what other codes are billed. The amount of money a physician or medical provider is paid for its services by Medicare or Medicaid depends on which CPT codes are used on claims submissions.
The Medicare National Correct Coding Initiative (NCCI) was implemented to promote national correct coding methodologies and to control improper coding leading to inappropriate payment. NCCI Procedure-to-Procedure (PTP) code pair edits are automated prepayment edits that prevent improper payment when certain codes are submitted together for covered services.
Both Medicare and Medicaid have NCCI Edits. NCCI policies and edits address procedures and services performed by the same provider for the same beneficiary on the same date of service. PTP edits define pairs of Healthcare Common Procedure Coding System (HCPCS)/CPT codes that should not be reported together for a variety of reasons.
For example, let’s say a patient goes to a physician’s office with an infected lesion that needs to be drained. The physician should not be charging for both the draining and the evaluation of the patient. Medicare views that as one service.
Now let’s look at an example where a Modifier 25 code is appropriate. In this case our patient sees a dermatologist for treatment of some dermatitis on her scalp. He writes a prescription. Before the patient leaves she tells the doctor of suspicious spot on her neck. He looks at it and decides to have it biopsied immediately. Those are separate services performed during the same office visit as the E/M service.
Modifiers May Sometimes Be Used to Bypass Medicare and Medicaid Edits
The CPT Manual and Centers for Medicare and Medicaid Services (CMS) define modifiers that may be appended to HCPCS/CPT codes to provide additional information about the services rendered. Modifiers consist of two alphanumeric characters. In this post we discuss MOFDIFIER 25.
In certain circumstances, NCCI edits can by bypassed by the use of these modifiers. The CPT Manual and CMS define modifiers that may be appended to HCPCS/CPT codes to provide additional information about the services rendered. “Modifiers may be appended to HCPCS/CPT codes only if the clinical circumstances justify the use of the modifier. A modifier should not be appended to a HCPCS/CPT code solely to bypass an NCCI PTP edit if the clinical circumstances do not justify its use. If the Medicare program imposes restrictions on the use of a modifier, the modifier may only be used to bypass an NCCI PTP edit if the Medicare restrictions are fulfilled.” American Medical Association, General Correct Coding Policies for National Correct Coding Initiative Policy Manual for Medicare Services, revision date January 1, 2018, Chapter I, I-18.
As noted above, one of the most common modifiers is Modifier 25, a “significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service.
Modifier 25 may be appended to an E/M CPT code to indicate that the E/M service is significant and separately identifiable from other services reported on the same date of service.” If the E/M service does not meet the requirement for a significant separately identifiable service, then modifier 25 cannot be reported and a separate E/M service would not be separately reimbursed in addition to the reimbursement for the bundled code.
Modifier 25 is used to indicate that an E/M service was provided on the same day as another procedure that would normally bundle under the NCCI. The CPT modifier 25 signifies that the E/M service was performed for a reason unrelated to the other procedure and therefore, it is separately payable.
Modifier 25 Codes Frequently Abused
In 2005, CMS did a study and found that 35 percent of Medicare claims for modifier 25 did not meet Medicare program requirements. Ever since, CMS has increased its scrutiny of codes reported with this modifier, sometimes resulting in significant repayment to Medicare. If the misuse is deliberate or reckless, the provider can be liable for triple damages and huge fines.
Sometimes the overbilling comes from ignorance and other times it is deliberate fraud. Depending on the circumstances, whistleblower rewards may be available for those reporting the fraud.
Let’s look at an example.
United States v. FWC Urogynecology LLC (Medicare Fraud)
In 2016, Holly Loebl filed a whistleblower case against Urogynecology Specialists of Florida and others claiming the practice was engaged in fraudulent billing practices.
Holly is a physician’s assistant licensed in Florida. In July 2015 she went to work for Urogynecology. She performed pre-operation visits, post op visits, ordered tests and prescribed medications to patients of the practice.
Within a few months or working at the practice, Holly says she was asked to “upcode” more visits. She refused believing that the visits had been properly billed. Why did they want her to upcode? She was told that the office was “leaving too much money on the table…”
Shortly thereafter, Holly began noticing that “many of her patient files contained claims for procedures that were not ordered or merely on the schedule but not yet ordered or performed.” It was then that the practice’s chief clinical officer allegedly told her to use modifier codes to make non billable post-op visits billable. She refused knowing this to be illegal.
The code often used to make the non-billable post-ops billable? Modifier 25.
Ms. Loebl continued to complain about the illegal billing and was terminated.
Most whistleblowers try to fix things internally before finding a lawyer to file a whistleblower claim. Holly Loebl was no exception. Only when folks are ignored or suffer retaliation do most step forward. In Holly’s case, stepping forward meant filing a whistleblower reward claim under the federal False Claims Act.
In July of this year, the Justice Department intervened in her case and fined FWC Urogynecology LLC $1.7 million for misusing Medicare Billing Codes. Prosecutors agreed that FWC Urogynecology “knowingly billed modifier 25 for services that were not billable or that it did not provide.”
In announcing the settlement, a Health and Human Services special agent said in a prepared statement, “Misrepresenting alleged services to inflate costs is just plain and simple greed. We will continue to thoroughly investigate health care companies that engage in schemes to defraud the American taxpayer.”
For stepping forward and reporting the fraud, Ms. Loebl will receive $306,000.
False Claims Act Pays Whistleblowers Who Report Modifier 25 Fraud
As demonstrated in this complaint, the misuse of Modifier 25 by Urogynecology does not appear to be an accident. According to the complaint, the practice’s chief clinical officer was warned that the misuse of billing codes was taking place yet took no action.
Wrongful intent can also be demonstrated by billing for services not even rendered.
Under the False Claims Act, people with inside information about Medicare and Medicaid fraud can receive an award of between 15% and 30% of whatever the government recovers from the wrongdoers. (In this case, Ms. Loebl received 18%.)
To receive a reward, you must file a claim in federal court. Simply calling a tollfree Medicare fraud hotline does not make you eligible for a reward. While the complaint is being investigated by the government, the case remains under seal meaning it is secret. Not even the wrongdoers are made aware of the complaint or the identity of the person who filed it.
The False Claims Act also makes retaliation illegal. If you are fired or demoted because you reported fraud, you are eligible to also receive two times any lost wages and your attorneys’ fees.
Many states (29) also have separate reward programs for state funded Medicaid. In California and Illinois, rewards may be available for reporting healthcare fraud involving private insurance.
Ms. Loebl is a hero. Hundreds of healthcare workers just like her step forward each year to report fraud and greed.
Thankfully, no patients were injured in this case. We have seen cases, however, where a few depraved doctors performed medically unnecessary procedures or prescribed unneeded drugs simply to increase their billings.
If you have evidence of Medicare or Medicaid fraud, contact us for a free, no obligation evaluation of your case. If we believe you have a case, we will file the necessary complaints in federal court and prosecute the case if necessary. You don’t have to pay us for our services unless you win and recover money. All inquiries are protected by the attorney – client privilege and kept confidential.