Anthem dials back modifier 25 payment reduction policy; delays implementation

January 03, 2018
Area(s) of Interest: Commercial Payors Payor Issues and Reimbursement 

Due to the overwhelming opposition from organized medicine, in February 2018, Anthem announced it will not proceed with its policy to reduce payments for E&M services reported with modifier 25.

This past fall, Anthem Blue Cross notified physicians in several states that effective January 1, 2018, it would reduce reimbursement of evaluation and management (E&M) services billed with modifier 25 by 50 percent. The California Medical Association (CMA) quickly jumped into action and coordinated with the American Medical Association (AMA) and the American Association of Dermatologists, along with many other state and specialty organizations, to push back on the proposed change.

Due to the overwhelming opposition from organized medicine, Anthem recently announced it would reduce the magnitude of its modifier 25 payment cut from 50 percent to 25 percent, and would delay implementation until March 1, 2018. Anthem will be issuing formal guidance to network physicians communicating these changes within the coming weeks.

While this is an improvement on Anthem’s original planned policy, CMA and AMA still strongly oppose this unjustified major reduction in physician payment. CMA will continue to work with AMA and others to seek full retraction of the Anthem policy. CMA has also raised this issue with the California Department of Managed Health Care.

In the meantime, physicians are urged to thoroughly review and assess the impact any proposed contract modifications would have on their individual practices.

Physicians should also be aware that California law requires health plans and their contracting medical groups/IPAs to provide 45 business days’ advance notice of a material change to a contract, manual, policy or procedure. A change is considered “material” if “a reasonable person would attach importance [to it] in determining the action to be taken upon the provision.”

Physicians have the right to terminate an agreement prior to the implementation of a proposed material change. For more information on physicians’ rights and options when a health plan makes a material change to a contract, manual, policy or procedure, see Contract Amendments: An Action Guide for Physicians. This resource is available free to CMA members.


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