Healthcare Groups Mobilize Against CMS Proposal to Reduce Same‑Day Service Payments Under Modifier 25

A Centers for Medicare & Medicaid Services (CMS) proposal to cut payments for secondary services performed during outpatient visits by 50 % is drawing strong opposition from numerous healthcare organizations.

“The damage would be extensive to practices that offer procedures and E/M [evaluation and management] visits on the same day, as it impacts many clinical scenarios (dermatology, otolaryngology, ophthalmology, and many more),” said Anders Gilberg, senior vice president for government affairs at the Medical Group Management Association (MGMA), in an email to MedPage Today. “MGMA members have relayed to us significant projected financial losses if this cut were to take effect.”

Under the proposed rule, often referred to as the “modifier 25 rule,” CMS explains in a July 16 Federal Register notice that when two or more services are performed on the same day, “the most expensive service (either surgical or E/M visit) would be paid at 100 %, and all other surgical procedures or E/M visits would be paid at 50 %.”

For example, consider a patient who receives an outpatient E/M visit billed with CPT code 99212 and has two skin lesions removed—code 11300 for the first lesion and code 11301 for the larger one. Because code 11301 is the highest‑paid service, it would be reimbursed at 100 %, while the office visit and the removal of the smaller lesion would each receive only 50 % of their usual payment.

The agency argues that “there are efficiencies when the same physician (or a physician in the same group practice) provides an E/M service for the same patient in conjunction with a procedure with a global period, and that we are likely duplicating payment under the current payment methodology.” The proposal was first introduced in 2019 but was later withdrawn.

The comment period for the proposal, which is part of a broader rule on physician payment and other issues, closed on Monday. CMS has until Nov. 1 to issue a final rule; the agency may adopt the modifier 25 proposal unchanged, modify it, or omit it entirely.

Gilberg contends that the proposal is unnecessary. “CMS already possesses numerous ways to address duplication,” he noted, pointing to the RBRVS Update Committee (RUC), which makes recommendations on payment rates and already accounts for overlap, and CMS’s “misvalued code initiative,” which tackles overpayment for specific services.

“We have urged CMS to rescind the proposal in its entirety, as it lacks evidentiary support and would harm Medicare beneficiaries’ access to these important same‑day services,” he added. “CMS discussed other potential cuts, such as 25 %, but those cuts are also unsupported by evidence and would arbitrarily impede medical groups’ ability to deliver same‑day care.”

The American Medical Association (AMA) and 150 other healthcare organizations, including MGMA, expressed similar concerns in a letter to CMS Administrator Mehmet Oz, MD, MBA. “CMS advances this policy on an unsubstantiated assumption of ‘likely’ duplication, without the evidence a change of this magnitude requires, and without addressing the concerns that led the agency to reject a substantially similar proposal in 2019,” they wrote. “We appreciate the administration’s focus on keeping independent physician practices sustainable, yet we believe the unintended consequence of CMS’s proposed policy will make it extremely difficult for those practices to remain viable.”

Another vocal opponent is the American Independent Medical Practice Association (AIMPA), which represents independent outpatient practices. “Unfortunately, it’s going to change how we provide healthcare,” said Rick Snyder, MD, a Dallas cardiologist and AIMPA’s vice president, in a phone interview. “It will penalize physicians for providing comprehensive same‑day care for patients who can’t afford to wait.”

Dr. Snyder cited the case of a melanoma patient who comes in for a routine screening. “If the dermatologist finds a suspicious lesion elsewhere on the body, you would ideally like to remove or biopsy it the same day to ensure timely diagnosis and treatment,” he explained. “Under this proposal, providing both services would trigger a 50 % cut for the less‑expensive E/M code, even though the same‑day procedure could save Medicare hundreds of thousands of dollars by avoiding advanced‑stage treatment.” He noted similar impacts for ophthalmology and rheumatology procedures.

He also criticized the lack of supporting data. “They never presented any evidence behind it—it just came out of nowhere,” he said. “It really fragments care.”

Dr. Snyder added that there are signs the medical community’s concerns are being heard on Capitol Hill. “There’s a lot of unanimity that CMS should walk this back. We’re hopeful and seeing indications that CMS is listening, but we’re anxiously waiting to see what the final rule will show.”

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