Medicare reimbursement includes payments for certain evaluation and management (E&M) services that are necessary prior to the performance of a procedure. CMS does not normally allow additional payments for separate E&M services performed by a provider on the same day as a procedure. However, if a provider performs an E&M service on the same day as a procedure that is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure, a so-called “modifier-25” may be attached to the claim to allow additional payment for the separate E&M service.

For over a decade, HHS-OIG has been concerned that health care providers were regularly and falsely tagging a modifier-25 on millions of Medicare claims. In fact, after a thorough 2002 audit, HHS-OIG determined that over 35% of all modifier-25 claims were false. In response, HHS-OIG has increasingly scrutinized providers who reach for modifier-25.

For example, noting an exceptionally high use of the modifier-25, the federal government recently investigated the Medicare billing practices of Georgia Cancer Specialists, one of the country’s largest private oncology practices. The end result was a $4.1 million False Claims Act settlement, in which the government alleged that the medical group applied modifier-25 to claims that did not qualify for its use, leading to overpayments by Medicare.

More information for whistleblowers is located at the Nolan Auerbach website.