Since Health Net first notified physicians in March of planned changes to its modifier 25 and emergency services payment policies for Medicare and Medi-Cal lines of business, the California Medical Association (CMA) has been working to educate the payor about physician concerns with the new policies.

Last month Health Net agreed to delay implementation of the new policies until July 1, 2018, to allow time to review provider concerns with the new policies and to continue discussions with CMA and other stakeholders.

“We believe a more collaborative approach to identify alternative methodologies for cost containment, including provider education on proper coding practices that do not bluntly penalize all physicians, will be more effective and less costly long term,” said Jodi Black, vice president of CMA’s Center for Economic Services in a letter to Health Net. “With the shift to value-based care, this is a time where plans and physicians should be identifying ways to work together.”

With the July 1 effective date quickly approaching, Health Net has not yet provided a final outcome on the policy and has said that it is still internally reviewing the issue. CMA is closely following this issue and will provide an update when available.

The policies at issue apply to Health Net’s Medicare and Medi-Cal lines of business and propose to cut reimbursement of an evaluation and management service with modifier 25 by 50 percent when billed with a minor surgical procedure or a preventive visit (CC.PP.052 and CC.PP.057). Additionally, CMA is concerned with the planned implementation of the Non-Emergent Emergency Room policy (CC.PP.053), which proposes to reduce reimbursement for Level 4 (99284) and Level 5 (99285) emergency services to a Level 3 (99283) reimbursement rate if Health Net deems the diagnosis was non-emergent.

Physicians are urged to thoroughly review and assess the impact any proposed modifications to their contract would have on their individual practices. To assist physicians in analyzing the modifier 25 change, CMA has developed a simple worksheet that will help calculate the net financial impact to their practice resulting from this change. The Modifier -25 Financial Impact Worksheet is available free to CMA members.