Why Medicare’s 20% modifier 25 cut still penalizes same-day care

When the Centers for Medicare & Medicaid Services (CMS) released its final 2027 Medicare Physician Fee Schedule on Nov. 4, some early coverage treated the modifier 25 decision as a win for doctors. CMS backed off its July proposal to cut same-day procedures by 50%. Instead, it finalized a 20% reduction.

For physicians across Maryland and the rest of the country, that is nothing to celebrate. Cutting a bad policy down to 20% does not make it good policy. Penalizing doctors for treating patients on the same day still makes no sense.

Starting Jan. 1, 2027, Medicare will dock payment by 20% for the lower-valued service whenever a physician performs a 0-day global minor procedure on the same day as an office evaluation and management (E/M) visit. That cut does not happen in isolation. Because Congress’ temporary 2.5% payment patch expires at the end of this year, the 2027 rule also cuts the conversion factor by 2.31% for most clinicians.

Independent practices are taking two hits at once while trying to cover rising staff and supply costs.

CMS argues that same-day procedures duplicate practice expenses. Agency officials say greeting the patient, room turnover and basic intake happen only once when an E/M visit and a minor procedure occur on the same day.

Anyone who actually works in medicine knows that is backwards. An unscheduled procedure does not save a clinic money. It slows everything down.

As a pathologist, I see the diagnostic side of these visits every day. When an older Medicare patient visits a dermatologist, surgeon or primary care physician for an evaluation and needs an unscheduled biopsy on the spot, the clinic staff has to flip the room, pull sterile instruments and get a separate consent signed. Everyone waiting behind that patient gets pushed back. Unscheduled same-day care takes more staff work, not less.

It also hurts patients.

Many Medicare patients rely on family members to drive them to appointments, or they travel an hour from rural areas just to get to the office. When a physician evaluates the problem and performs the biopsy or minor procedure during that same visit, the patient gets immediate answers and faster pathology results. They also pay only one copay. Under this new rule, doing the right thing for that patient triggers an automatic 20% pay cut.

The alternative is to tell the patient to go home and come back next week for the procedure. Splitting the care across two visits would protect the clinic’s reimbursement. Ironically, it would also cost Medicare more money overall. Meanwhile, the patient gets stuck with a second trip, a second copay and a delayed diagnosis.

That is why we cannot treat Nov. 4 as the final word.

First, practices need to get ready now. The 20% cut applies to 0-day global procedures billed with an E/M visit by the same physician or a same-specialty colleague in the same group. Practice leaders should audit their modifier 25 charts today to make sure every separate E/M visit is clearly documented.

Second, the fight now moves to Capitol Hill. The AMA and 149 other national and state medical societies have already mobilized against this policy, and organized medicine is pressing Congress to include a one-year delay of the modifier 25 cut — alongside an extension of the 2.5% conversion factor adjustment — in the end-of-year spending package.

Lawmakers have until the end of the lame-duck session to stop these cuts. Practicing physicians need to call their senators and representatives this week and make one point clear: Dropping the cut from 50% to 20% does not fix the problem. Stop penalizing same-day care.

Eric Wargotz, MD, FCAP, is a practicing physician, a clinical professor emeritus of pathology at the George Washington University School of Medicine and Health Sciences and the 178th president of MedChi, The Maryland State Medical Society.