Practice Management Alert

Big changes are on the horizon if you participate with insurance provider Horizon Blue Cross Blue Shield (BCBS) of New Jersey.

In a recent memo, BCBS states that effective May 17, 2010, they will cut reimbursement by half on many modifiers, regardless of the circumstances surrounding their use. Your practice might stand to lose thousands of dollars. Take a look at the policy details. (Then, evaluate your options for dealing with these cuts with the expert tips offered in the sidebar "Weigh Your Options Before Accepting Modifier Cuts.")

The February 2010 memo offers a list of modifiers that BCBS states "will be considered nonstandard -- that either the full service was not performed or that the service in question was performed in conjunction with another service or procedure."

If the policy proceeds as planned, the move will create logistical migraines for those submitting to Horizon BCBS in NJ, experts warn. Many industry watchers hope that this policy will not set a deeply troubling precedent across the country.

Of the modifiers being cut, the effects on modifier 25 (Significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) and modifier 59 (Distinct procedural service) may have the greatest impact for your practice.

Important: The memo states that evaluation and management (E/M) services that are appropriately appended with modifier 25 will pay "at 50 percent of the applicable Horizon BCBSNJ fee schedule amount. This recognizes that the service in question was rendered in conjunction with a separately identifiable E&M service performed on the same day by the same practitioner."

"In general, it's becoming tougher every day to get payers to pay with a 25 modifier," says Karla Westerfield, COPM, business manager at Southeast Wyoming Ear, Nose and Throat Clinic in Cheyenne.

Modifier 59 will also receive the same drastic 50 percent reduction. "I feel that even though the 25 modifier is going to hurt practices, it will not be as much of a 'hurt' factor as the situation with the 59 modifier," says Brian Fornutaro, a billing professional with Medi-corp in Cranford, NJ.

Reasoning: Horizon's memo states that it is following CMS Correct Coding Institute (CCI) guidelines for appropriate use of the modifiers. CCI edits do not allow a reduction on modifier 25, however. They do allow a  modifier 59 reduction as part of the multiple procedure reduction rules.