Modifier 25: Appropriate Use and Increased Medicare Scrutiny
Modifier -25 is used when a physician or other qualified health care professional performs a significant, separately identifiable evaluation and management (E/M) service on the same day as another procedure or service. Its purpose is to tell the payer that the E/M work was above and beyond the evaluation normally inherent in the procedure being performed.
For Medicare, modifier 25 is appended to the E/M code, not the procedure code. The E/M service does not necessarily require a different diagnosis from the procedure; the key issue is whether the documentation demonstrates medically necessary E/M work that is genuinely separate from the work inherent in performing the procedure.
Modifier 25 in PM&R
Modifier 25 is particularly relevant to PM&R because physiatrists frequently perform procedures while also managing complex medical and rehabilitation problems. Examples may include an E/M service performed on the same day as a joint or bursal injection, trigger-point injection, peripheral nerve injection, botulinum toxin injection, or another minor procedure.
The fact that a physician evaluated the condition before performing a procedure does not automatically justify a separate E/M service. Medicare considers the routine assessment and decision-making associated with performing a minor procedure part of the procedure itself.
For example, a patient presenting specifically for a previously planned injection who receives the customary interval assessment followed by the injection generally would not support a separately billed E/M service simply because an examination was performed.
Conversely, modifier 25 may be appropriate when the physiatrist performs substantial additional work—for example, evaluating a meaningful change in functional status, addressing additional medical or rehabilitation problems, changing medications or the rehabilitation plan, evaluating a new complaint, or otherwise providing medically necessary E/M management beyond what is ordinarily required for the procedure.
The medical record should make that distinction apparent. A useful practical question is:
If the procedure had not been performed today, would the documented E/M work still represent a medically necessary, separately identifiable E/M service?
If the answer is clearly yes, modifier 25 is much easier to defend.
CMS and OIG Are Renewing Their Focus on Modifier 25
Modifier 25 has received renewed federal attention. HHS OIG audits have identified substantial compliance problems involving E/M services billed with modifier 25 on the same day as procedures. In one recent audit involving intravitreal injections, OIG reviewed 24 sampled same-day E/M services and found that 22 did not support use of modifier 25. Medicare had paid approximately $124 million nationally for same-day E/M services with modifier 25 in the population examined.
CMS responded with renewed provider education. In February 2026, CMS specifically reminded providers that only a significant and separately identifiable E/M service should be separately reported with modifier 25. CMS subsequently repeated modifier-25 compliance messaging through its Medicare Learning Network during 2026.
The attention extends beyond a single specialty. Recent OIG work has examined modifier-25 billing by ophthalmologists, dermatologists and podiatrists. In the podiatry audit, 44 of 100 sampled E/M claims failed Medicare requirements. OIG has also recommended continued contractor review and provider education concerning same-day E/M services and modifier 25.
What This May Mean for Future Audits
No CMS announcement establishes a new nationwide modifier-25 audit program for PM&R specifically. Nevertheless, the pattern deserves attention.
CMS and OIG now have extensive claims data identifying physicians and specialties with high rates of same-day E/M/procedure billing. Modifier 25 also has an unusual characteristic from a program-integrity perspective: it can override automated payment edits that otherwise prevent separate payment. OIG has explicitly identified this feature in its recent work.
In March 2026, OIG added another active Medicare Part B project examining E/M services paid on the same day as minor surgery, this time focusing on claims that were processed without modifier 25 when one should have been required. The project analyzes Medicare Part B claims from 2023–2025.
Taken together, these developments suggest that same-day E/M/procedure billing is an area of continuing federal program-integrity interest. Practices with unusually frequent modifier-25 usage, repetitive combinations of the same E/M and procedure codes, or documentation that does not clearly distinguish the E/M work from the procedure may therefore face increased audit risk.
Practical Guidance for PM&R Practices
Physiatrists should not avoid modifier 25 when a legitimate separately identifiable E/M service has been performed. Appropriate services should be billed. The goal is defensible use rather than non-use.
Before submitting an E/M service with modifier 25, the documentation should establish:
Why a medically necessary E/M service was required that day.
What evaluation and management occurred beyond the work inherent in the procedure.
The assessment and management decisions resulting from that E/M work.
That the selected E/M level itself is supported by the documentation.
A separate diagnosis is not required merely to justify modifier 25. CMS specifically recognizes that the E/M and procedure may relate to the same diagnosis. What must be separate is the work, not necessarily the diagnosis.
For PM&R practices, the safest approach is therefore straightforward: use modifier 25 when the physician truly performs and documents a significant, separately identifiable E/M service—but do not use it routinely simply because an E/M code and procedure occurred during the same encounter.
Given CMS's repeated 2026 compliance messaging and OIG's continuing audit activity, this is an appropriate time for practices to review their modifier-25 utilization patterns and documentation before a payer or government contractor does it for them.