Dermatology practices have been specifically named in a recent project added to The Office of Inspector General (OIG) Work Plan.  The project is evaluating whether Dermatology practices are overusing modifier 25 in order to report E/M visits when minor procedures are performed.

The OIG is part of the Department of Health and Human Services (HHS or DHHS) and looks for fraud, waste, and abuse in governmental programs, including Medicare.  The OIG has a Work Plan that lays out all the things (projects) they are evaluating.  The Work Plan used to be posted once a year for the next year’s programs; but since 2017, the Work Plan has been updated monthly online (Work Plan | Office of Inspector General | U.S. Department of Health and Human Services (hhs.gov)).  On the site, you can review the recently added items, the active Work Plan, or the Work Plan archives, depending on your needs.  

Once the OIG finishes its evaluation, a report is generated with its findings and recommendations to the Agency involved (CMS in this case).

The name of the project discussed here is "Dermatologist Claims for Evaluation and Management Services on the Same Day as Minor Surgical Procedures."  It was issued in April of 2021 and has an expected report issue date in fiscal year 2021 (report number W-00-21-35868).  In it, the OIG states that in 2019, about 56% of dermatologists’ claims with an E/M service also included minor surgical procedures on the same day.  They further state that this volume may indicate abuse to receive payment for an E/M service when only a minor procedure is supported in the medical record.

Modifier 25 is a CPT E/M modifier that, when appended to an E/M service on a claim, indicates that a "significant, separately identifiable E/M service was performed by the same physician or other qualified health care professional on the same day of a procedure or other service."  This lets a payor know that the E/M service performed was either not related to the min/or procedure or that the E/M service was over and above what is normally included in the E/M service that is bundled into the minor procedure.  Instead of requiring a patient to make another appointment and come back on a separate day, this allows a physician/other QHCP to perform the E/M service and get paid.

Example: Patient presents for actinic keratoses (AK) destruction.  During the visit, the patient also complains of an irritating rash that started 2 days prior.  The physician/other QHCP takes a separate history, examines the rash, prescribes a steroid cream, and tells the patient to follow up in 2 weeks if the rash has not improved.  The rash has nothing to do with the AK destruction, so this should be considered a separately identifiable service that is reportable at the same visit as the AK destruction.

It is quite common in Dermatology practices to see patients for multiple issues and perform minor procedure(s) on some of them, while medically managing others.  In such cases, what may appear to be an overuse, or abuse, of modifier 25 is really the nature of the practice.  A physician/other QHCP in those cases deserves to be paid for all services compliantly rendered.  As with all things related to payment, though, it all comes down to what is documented in the medical record.

It is always a good idea to perform self-checks to look for any issues, especially if the OIG is also looking at these issues.  To determine if your practice falls into the "possible overuse" category for the OIG, here is a checklist:

If your practice does not have the personnel that has time or the experience to perform a review, consider an outside consultant.  Be prepared!