Dermatology E/M Services with Modifier 25 (Same-Day Minor Procedures)
The OIG Report (November 2025) was just released regarding E/M services with Modifier 25 for Dermatology. The OIG noted that 61.5% of Dermatologists billed an E/M service with a minor surgical procedure on the same date with modifier 25, the highest among specialties. The OIG also estimated that there were $62.9 million in Medicare overpayments, resulting in a 10% error rate. These errors are tied to documentation, leveling, and misuse of modifier 25. Medicare generally includes E/M services in the payment for minor surgical procedures performed on the same day, unless a significant, separately identifiable E/M service is provided and properly documented using modifier 25.
When is Modifier 25 Appropriate?
Modifier 25 may be appended to an E/M code ONLY when all criteria are met:
A significant, separately identifiable E/M service is performed
The E/M service is beyond the usual pre-/post-operative work
The service is clearly documented in the medical record
Documentation supports medical necessity and distinct evaluation
Reminder: The provider is attesting to all of the above when using modifier 25.
The OIG identified key issues:
No Supporting Documentation (Most common)
No medical record submitted or available
E/M level upcoded
Documentation does not support billed level
Higher-level E/M code reported, but documentation did not support the medical decision-making level or time requirement.
Even though a history and/or examination are no longer calculated for the E/M level, a clinically relevant history and/or examination is still required. The OIG found many elements missing or not clearly documented, and found the E/M service with Modifier 25 to be inappropriate.
Not Significant & Separate
E/M relates only to the procedure (e.g., lesion removal)
No additional distinct evaluation performed
Critical Documentation Requirements
To support modifier 25, providers must document:
Distinct complaint or problem beyond the procedure
Separate evaluation work (history, exam, MDM)
Medical necessity for additional E/M service
Clear separation from procedural work
Watch closely for:
E/M billed same day as biopsy, lesion destruction, excision
Documentation focused only on the procedure site/problem
Routine pre-op evaluation billed as E/M
Frequent or consistent modifier 25 usage patterns
E/M automatically billed with every procedure
Action Steps for Compliance
Only bill E/M when truly separate and medically necessary
Ensure documentation clearly supports distinct service
Avoid using modifier 25 to justify procedure decisions or bypass claims edits
If the E/M service does not clearly stand on its own, it should NOT be billed separately. Keep in mind there is an inherent E/M service in every procedure, which applies to new and established patients.
When You CAN Bill an E/M with Modifier 25
You may report an E/M service with modifier 25 only if ALL criteria are met:
The E/M addresses a separate problem or condition
The service is beyond routine pre/post-op care
Documentation clearly shows distinct evaluation work
The visit meets medical necessity and E/M level requirements
Do NOT report a separate E/M when:
Visit is only for the procedure (e.g., lesion removal, biopsy)
E/M reflects the decision to perform the procedure
Documentation lacks a separate, identifiable service
Modifier 25 is used just to bypass edits
Quick Self-Check Before Billing
Ask yourself:
Did I evaluate something beyond the procedure?
Is that work clearly documented and distinct?
Does the documentation support the E/M level billed?
If “NO” to any--Do NOT bill the E/M
Modifier 25 should be the exception—not the rule. Only bill a separate E/M when it is clearly distinct, medically necessary, and fully supported. Ensure all E/M services billed with modifier 25 on the same day as a minor surgical procedure are significant, identifiable, and clearly documented in the medical record.
Conclusion
The OIG report highlights that while most dermatologists comply with Medicare billing rules for E/M services on the same day as minor surgical procedures, there remains a notable risk of improper payments. Continued oversight and education are recommended to address these gaps and support a separately identifiable E/M service with Modifier 25.
It is time to perform a medical record review (audit) of your documentation with Modifier 25 to ensure compliance with the rules for Modifier 25, not just for Medicare but for all payors, as Modifier 25 with an E/M service is under scrutiny by all payors.
Learn more about Modifier 25 in Dermatology with KZA On-Demand Courses, tailored specifically to your specialty with relevant, timely topics:
