A dermatology practice manager showed us a letter from a commercial payer last month asking for records on 40 claims. Every one was a 99213 or 99214 with modifier 25 billed alongside a lesion destruction or biopsy. She was confident the visits were legitimate. When we read the notes together, about a third of them described nothing beyond the lesion that was treated. Those visits were not separately billable, and the payer was going to find that.
Modifier 25 has been under scrutiny for a long time. The HHS Office of Inspector General reported back in 2005 that a large share of the modifier 25 claims it sampled did not meet the requirements, and payers have run edits and record requests on it ever since. This year several payers have told practices they will look harder at the combination of a level 4 or 5 visit with a minor procedure. So it is worth getting the rule exactly right, and it is worth knowing what your own providers' numbers look like before a payer tells you.
Key takeaways
- Modifier 25 goes on the E/M code, never the procedure, and only when the visit work goes beyond the evaluation that is already paid inside the procedure.
- Two questions decide it: would an E/M have been billed without the procedure, and does a visit remain when the procedure-related parts of the note are covered up?
- A different diagnosis is not required, but a shared diagnosis puts more weight on the documentation.
- Level the E/M on the E/M work alone. The procedure's risk is paid in the procedure code.
- Know each provider's modifier 25 rate on procedure visits. An outlier is either practicing differently or coding differently, and you want to find out which before the payer does.
What the modifier actually says
Modifier 25 means a significant, separately identifiable evaluation and management service by the same physician or qualified health professional on the same day as a procedure or other service. It goes on the E/M code, never on the procedure. It applies to procedures with a 0-day or 10-day global period (minor procedures). For a major procedure with a 90-day global, the decision for surgery made the day before or the day of surgery uses modifier 57 instead.
The key concept is that every procedure already includes some evaluation: confirming the indication, explaining the procedure, obtaining consent, assessing the site. That work is paid inside the procedure code through the pre-service work built into its relative value units. Modifier 25 is for work that goes beyond it.
The test we apply
We ask two questions. First, would the physician have billed an E/M visit if the procedure had not been done? Second, if you cover up the parts of the note that describe the procedure and its immediate pre-work, is there still a visit left that supports the level billed? If the answer to both is yes, modifier 25 is appropriate. A different diagnosis is not required, but when the visit and the procedure share one diagnosis, the note has to work harder to show the separate evaluation.
The second question also sets the level. Cover the procedure paragraph and level what remains using the 2021 office visit rules: problems addressed, data reviewed, and risk of the management chosen. A new problem with an uncertain prognosis, an imaging order and a prescription is a moderate visit (99214). A stable chronic problem with a medication refill is low (99213). A quick look at a lesion that is then removed is not a visit at all.
Five worked examples
| Situation | Separately billable? | Why |
|---|---|---|
| Established patient scheduled for a repeat knee injection (20610). Physician confirms the knee is unchanged and injects. | No | The evaluation is the pre-service work of the injection. Bill 20610 and the drug only. |
| Patient presents with new knee pain. Physician takes history, examines, considers differential, orders imaging, then decides to inject today. | Yes, 99213-25 or 99214-25 with 20610 | The workup that led to the decision goes beyond the injection's pre-service work. |
| Patient with hypertension and diabetes comes for a chronic care visit and mentions a wart, which is destroyed (17110). | Yes, 99214-25 with 17110 | Two unrelated problems; the chronic disease management is a full visit on its own. |
| Preventive visit (99396) during which the physician also manages a new complaint requiring prescription and follow-up. | Yes, 99396 plus 99213-25 | Problem-oriented work beyond the preventive service. Document it in its own section and be ready for payer-specific rules; some plans do not pay both. |
| New patient referred for a skin lesion; physician examines the lesion, discusses options and biopsies it (11102). | Usually no | The exam and discussion are the biopsy's pre-work. A separate E/M requires a broader evaluation, for example a full skin exam with other findings addressed. |
Documentation that holds up
Write the note in two visible parts. The E/M part has its own history, assessment and plan for the problem or problems evaluated. The procedure part has its own indication, consent, description, and post-procedure instructions. A single paragraph that mixes both is the most common reason a payer downgrades or denies on review. Level the E/M on the E/M work alone. If the only thing that makes it a level 4 is the risk of the procedure, the procedure code already paid for that risk.
Time-based coding needs the same discipline. If the visit is coded by total time, the time spent performing the procedure and its immediate pre- and post-work must be excluded, and the note should say so. "Total time 35 minutes, excluding the procedure" is the phrase auditors want to see.
A short before-and-after makes the point. Before: "Patient here for wart on right hand, also has HTN and DM. Wart destroyed with cryotherapy, tolerated well. Continue meds." That note supports 17110 and nothing else. After: "Hypertension: BP 148/92 today, above goal; patient reports missed doses; increased lisinopril to 20 mg, recheck 4 weeks. Diabetes: A1c 7.9 reviewed from last week, stable on metformin, discussed diet, continue. Procedure: verrucous lesion right dorsal hand, 4 mm, cryotherapy applied, consent obtained, post-care reviewed." Same visit, same patient, and now the E/M stands on its own as a 99214-25.
How the wrong use shows up on the remittance
- CO-97: the benefit for this service is included in the payment for another service. The payer bundled the E/M into the procedure, usually because modifier 25 was missing or the payer's edit did not accept it.
- CO-4: procedure code inconsistent with the modifier. Modifier 25 was placed on the procedure code, or on an E/M code that does not accept it (for example some preventive codes under certain plans).
- Partial payment: some payers pay the E/M at a reduced rate when billed with modifier 25 under their contract terms. Check the contract before you appeal; if the reduction is contractual, an appeal is wasted effort and a renegotiation item.
- Record requests: a pattern of 99214-25 or 99215-25 with the same procedure on most claims will trigger a prepayment review at some payers.
The quarterly self-audit
- Run a report of all claims in the quarter with an E/M code carrying modifier 25 and a same-day procedure, by provider.
- Calculate each provider's rate: modifier 25 visits divided by all procedure visits. A provider at 90% when the group is at 40% is either practicing differently or coding differently.
- Pull 20 charts per provider, weighted toward level 4 and 5 visits, and apply the two-question test.
- Record the result per chart: supported, supported at a lower level, not supported.
- Share results by name with the providers, with the notes in front of them. Education works when it uses their own charts.
- Correct claims that were not supported. Voluntary correction is a better position than a payer finding.
A fictional result from a four-provider dermatology group: rates of 38%, 44%, 51% and 88%. The outlier's 20 charts came back 9 supported, 5 supported at a lower level and 6 not supported. The fix was not a lecture. It was a template change that put the procedure in its own section and a rule that the E/M assessment had to name a problem other than the lesion treated. The next quarter's rate was 52%, and the record request that arrived in the meantime was answered with notes that held up.
Questions we hear
Do we need a different diagnosis code on the E/M line?
No. CPT is explicit that different diagnoses are not required. Some payer edits still favor claims where the E/M points to a different diagnosis, so when a second problem was genuinely addressed, put its diagnosis first on the E/M line. Do not add a diagnosis that was not addressed.
Can a nurse practitioner bill 99213-25 when the physician does the procedure?
Modifier 25 is for the same clinician (or same group and specialty under most payer rules) performing both. Two clinicians of the same specialty in the same group are treated as one. If the nurse practitioner's visit and the physician's procedure were genuinely separate services, the same test applies, but expect the payer to treat the group as a single billing entity.
Who should do the audit?
Someone who does not code the charts they are auditing. In a small practice that may be the billing lead or an outside coder. Revelrex includes a modifier 25 sample in every RCM audit, and our coding courses spend a full session on same-day E/M and procedure scenarios because this is where most office-based audits begin.
What to do this month
- Run the modifier 25 rate by provider for the last quarter and circulate it, with the group average, before anyone pulls a chart.
- Pull 20 charts for the highest-rate provider and apply the two-question test to each; record supported, lower level, or not supported.
- Check the note templates: if the procedure and the visit share one free-text box, split them into two sections.
- Review the last quarter's CO-97 and CO-4 denials on same-day E/M and procedure claims and sort them into missing modifier, wrong placement, and contractual reduction.
- Correct any unsupported claims that are still within the payer's correction window, and keep a record of what was corrected and why.
