2. Coding Compliance Overview
  3. 2027 CMS MPFS Proposed Rule
  4. 2027 Proposed Modifier -25 Changes

2027 Proposed Modifier -25 Changes

Clock Wooden Man and Money in that order representing Time is Money

Pexels: Picas Joe

Proposed Changes

The first change the 2027 CMS MPFS Proposed Rule is considering is whether or not they will allow modifier 25 to be reported in conjunction with the newly proposed modifiers they intend to replace G2211 with in 2027.

More importantly, the second change CMS is proposing is to apply something similar to the multiple procedure reduction rule when E/M (Evaluation and Management) services are performed on the same date as a procedure with a 0 or 10 day global.

CMS Rationale

CMS believes that same-day E/M visits billed with modifier -25 often share resources and physician work with procedures performed during the same encounter, creating efficiencies that may result in duplicate payment under the current fee schedule.

Key Arguments

  1. There are efficiencies when services are furnished together

CMS believes that when a physician sees a patient for an E/M visit and performs a procedure during the same encounter, some work is shared between the two services:

  • Patient registration/check-in
  • Obtaining history
  • Reviewing records
  • Clinical staff support
  • Exam room resources
  • Portions of physician time and workflow

CMS argues these efficiencies are similar to the rationale behind the existing Multiple Procedure Payment Reduction (MPPR) policies used for surgery, imaging, and therapy services.

  1. Current payment may duplicate reimbursement

The concern is that they may be paying twice for certain components of care.

Their position is that:

  • The procedure payment already includes some pre-service and post-service work.
  • The E/M payment includes work associated with evaluating the patient.
  • When both occur during the same encounter, some of those resources overlap.

Therefore, CMS believes the current methodology may overstate the total resources consumed.

  1. Modifier -25 would still allow payment

Importantly, CMS is not proposing to eliminate payment for modifier -25 visits.

Instead:

  • The E/M service would still need to be significant and separately identifiable.
  • The E/M service would still be payable.
  • However, CMS proposes that the E/M service and additional procedures be subject to a multiple-procedure style reduction.
  1. CMS is trying to align E/M services with existing MPPR concepts

CMS appears to be applying this logic:

“If we reduce payment when multiple surgeries are performed together because efficiencies exist, why shouldn’t we also apply a similar concept when an E/M visit and procedure are performed together?”

Under the proposal:

  • Highest-valued service = 100%
  • All remaining procedures and E/M services = 50%

Why This Is Controversial

Many specialty societies are already pushing back because modifier -25 is only supposed to be used when the E/M service is above and beyond the usual pre/post-procedural work included in the procedure.

Their possible position on this:

“CMS is assuming duplication where none exists because the E/M service was already required to be separate and significant before modifier -25 could be reported.”

In other words:

  • The procedure payment already excludes the extra work represented by the -25 E/M.
  • Therefore, reducing the E/M payment by 50% may effectively undervalue legitimately separate cognitive work.

Compliance Perspective

CMS frames the proposal as a payment accuracy and efficiency issue. However, many compliance professionals will recognize another possible driver: modifier -25 has long been an audit target due to routine or automatic reporting patterns. Some practices have historically appended modifier -25 whenever a procedure is performed on the same date as an office visit, despite CPT and CMS guidance requiring documentation of a significant, separately identifiable E/M service that goes above and beyond the pre-post procedural work. The proposed payment reduction may be viewed as a broad policy response to a utilization pattern that CMS believes results in excess spending.

This is likely to become one of the most debated provisions in the CY 2027 MPFS rule because it directly impacts dermatology, orthopedics, ophthalmology, pain management, ENT, urology, family medicine, and many other specialties that frequently bill E/M visits with modifier -25.

Resources

CMS Federal Register – 2027 MPFS Proposed Rule (external link)

TMA Modifier 25 Article (external link)

MSHBC – 2027 Proposed Rule Article