The California Medical Association (CMA) told Blue Shield its new modifier 25 payment cuts are duplicative and unjustified, urging the payor to rescind the recently announced policy change that will significantly reduce reimbursement for evaluation and management (E/M) services billed with modifier 25.

Modifier 25 is used to report a significant, separately identifiable E/M service provided by the same physician on the same day of a minor procedure with 0 or 10 global period. Last month, Blue Shield notified physicians that it will reduce reimbursement by 50% for non-preventive E/M services (CPT codes 92002, 92004, 92012, 92014 and 99201-99215) when appended with modifier 25 and billed with a minor surgical procedure code beginning July 14, 2024.

The payor has cited an overlap in the practice expense payment component between E/M and minor procedure codes as a rationale for this payment reduction. In a letter to Blue Shield, CMA emphasized that this misperceived overlap in payment would unfairly result in a duplicative reduction in reimbursement that in some cases would bring reimbursement for two services below the reimbursement level for providing just the E/M service, and potentially below the physician’s cost to provide the services.

Blue Shield’s justification for this new policy conflicts with the American Medical Association (AMA) method for developing code valuation. AMA’s Relative Value Scale Update Committee (RUC) already addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service. In fact, the RUC reduces the value of procedure codes that are reported over 50% of the time with E/M codes to eliminate duplicate valuation of practice expenses and pre- and post-visit physician work. This automatic reduction means that physician payment is already decreased for these procedure codes—even those that are reported without an E/M code and modifier 25.

Blue Shield’s proposed policy change also represents a significant reimbursement cut that will broadly impact physician practices and patients across the state and creates a disincentive for physicians to provide efficient care for unscheduled services. 

CMA outlined these and other concerns in the letter to Blue Shield and urged that the payor rescind the policy before it becomes effective. CMA has also reached out to Blue Shield to schedule a meeting to discuss our concerns with the new policy.

Physicians with concerns or questions about the policy can contact Blue Shield Provider Services via live chat after logging in at blueshieldca.com/provider or by phone at (800) 541-6652. Physicians may also wish to reach out to their specialty societies to urge them to engage with Blue Shield on this policy change.  

Contact: CMA’s Center for Economic Services, economicservices@cmadocs.org or (800) 786-4262.