Guides Specialty billing

Modifier 25 in 2027: physicals, procedures and the 80% rule

By Marlow’s billing manager, 20+ years in medical billing, former billing manager at Mount Sinai South Nassau, Oceanside · Updated November 9, 2026 · 8 min read

The short answer

Modifier 25 tells the payer that a visit on the same day as a procedure or other service was significant and separately identifiable, and the note has to show that extra work. From January 1, 2027, Medicare pays 20% less on the lower-paid service when a modifier 25 visit and a 0-day global procedure happen the same day.

Modifier 25 goes on an evaluation and management (E/M) visit to say that, on the same day as a procedure or another service, the same clinician also did a significant, separately identifiable E/M service. It does not need a different diagnosis. It does need a note that shows work beyond what the procedure or other service already includes. Starting January 1, 2027, Medicare also cuts payment when a modifier 25 office visit and a 0-day global procedure happen on the same day: the higher-paid service is paid in full and the other at 80%.

This guide covers what “significant and separately identifiable” means in the rules, the two most common situations (a physical plus a problem, and a visit plus a minor procedure), how to talk to patients about the bill, the 2027 change, and what one commercial payer’s current policy says. Rules are as of November 2026.

What the rules say

Three sources define how modifier 25 works for Medicare.

CPT describes modifier 25 as a significant, separately identifiable E/M service by the same physician or other qualified health care professional on the same day as a procedure or other service.
The NCCI Policy Manual (chapter 1, revised January 1, 2026) adds that the E/M may be related to the same diagnosis or a different one, and that the work that is part of the procedure itself (the pre-procedure, intra-procedure and post-procedure work) cannot be billed again as an E/M.
The Medicare Claims Processing Manual (chapter 12, §30.6.6) says Medicare pays a modifier 25 visit on the day of a global procedure when the visit is above and beyond the usual pre-operative and post-operative work, and that both the visit and the procedure must be documented in the record even though the note is not sent with the claim.

What the note has to show, in plain terms: a problem was evaluated, and the evaluation went beyond deciding to do the procedure that day. A useful test is to set the procedure note aside and ask whether the rest of the note would support an E/M visit on its own.

The decision to do a procedure

For minor procedures (0-day or 10-day global periods), the decision to do the procedure is part of the procedure’s payment. Being a new patient is not enough on its own to justify a separate visit (NCCI chapter 1). A separate visit with modifier 25 needs work beyond that decision.

For major procedures (90-day global periods), the visit where the decision to operate is made, on the day before or the day of surgery, is billed with modifier 57, not 25. Medicare does not pay modifier 57 with 0-day or 10-day procedures.

Situations where modifier 25 does not help

99211 with vaccine or drug administration. NCCI chapter 11 says 99211 is not separately reportable with vaccine administration (90460–90474, G0008–G0010 and others) or drug administration codes. Other visit levels can be, with modifier 25, when the visit is significant and separately identifiable.
Two visits by the same clinician on the same day. Medicare does not allow modifier 25 to pay for two E/M visits by the same clinician on the same day.
Using it to get past an edit. NCCI says a modifier may only be added when the clinical facts support it, never just to get a claim past an edit.

A physical and a problem visit on the same day

This is the situation patients notice, because it can turn a “free” physical into a bill.

What the rule says

CPT guidance, as summarized by the AMA, is that when a problem or abnormal finding addressed during a preventive visit is significant enough to need the work of a problem-oriented E/M visit, both are billed, with modifier 25 on the problem visit. A problem that is insignificant or trivial and needs no extra work is not billed separately (AMA, updated December 2, 2025).

Medicare

Medicare does not cover a routine physical (99381–99397). When a Medicare patient gets a covered problem visit at the same time as a noncovered physical, Medicare treats the covered visit as standing in for part of the physical. The practice may charge the patient only the difference between its usual charge for the physical and its usual charge for the visit (Claims Processing Manual, chapter 12, §30.6.2).

Medicare does cover the annual wellness visit and the Initial Preventive Physical Examination. A problem visit can be billed with them, with modifier 25 on the problem visit.

What the patient pays

Plan type	Preventive part	Problem visit with modifier 25
Traditional Medicare	Annual wellness visit: no coinsurance or deductible if the clinician accepts assignment	Part B deductible and 20% coinsurance apply
Most commercial plans	Covered preventive services: generally no copay or coinsurance in network	The plan’s normal office visit copay, coinsurance or deductible

Sources: Medicare.gov, yearly wellness visits; HealthCare.gov, preventive care benefits. HealthCare.gov notes coverage varies and $0 is not guaranteed in every case.

The conversation with the patient

The AMA page above says billing an extra code can change what the patient owes, and suggests talking about it at the time of the visit. A front desk script can be short:

Before the visit: “Your physical is usually covered in full. If the doctor also treats a new or ongoing problem today, that part is billed as a separate visit and your plan’s normal copay or deductible may apply.”
On the statement: show both lines, so the patient can see the physical and the problem visit separately.

The 2027 Medicare 80% rule

The 2027 Physician Fee Schedule final rule, published November 9, 2026, adds a payment cut for one specific combination.

When it applies: an office or outpatient E/M visit (99202–99205, 99211–99215) billed with modifier 25 on the same day as a procedure with a 0-day global period, by the same clinician or another clinician of the same specialty in the same group.

What happens: the highest-paid service on that day is paid at 100%. Every other service (the visit or other procedures) is paid at 80%.

What it does not apply to:

10-day and 90-day global procedures (CMS proposed including them, then dropped them)
visits by a clinician of a different specialty in the same group
inpatient, emergency department and other E/M families
services without a global period (global indicator XXX)

CMS proposed a 50% cut and settled on 20% after comments. It expects the largest effect on dermatology, otolaryngology and podiatry, and a smaller one on hand surgery, physician assistants, and colon and rectal surgery (91 FR 71118–71122 and 71653–71655).

Example

Example, Long Island locality (02), office setting, 2027 rates we calculated from CMS’s RVU and GPCI files: an established patient has a problem visit billed as 99213 with modifier 25, and the same clinician does a large-joint injection (20610, a 0-day global procedure).

Service	2027 amount before the rule	Paid under the 80% rule
99213 with modifier 25	$105.59	$105.59 (higher-paid, so 100%)
20610	$76.07	$60.86 (80%)
Total	$181.66	$166.45

This is an illustration of the arithmetic only, not advice on how to code any visit. Real amounts depend on the codes, the setting and the published fee schedule.

Do not reschedule to avoid it

CMS wrote in the final rule that it finds scheduling services to maximize payment problematic, that bringing a patient back on another day would raise the patient’s cost sharing, and that it will monitor claims for that pattern using claims edits, comparative billing reports and medical review. It also called letters telling patients that Medicare will no longer pay for same-day procedures misleading. The rule does not stop same-day procedures. It pays less for them.

Other payers

The rule sets traditional Medicare payment. Medicare Advantage and commercial plans set their own policies. If your contract pays a percentage of Medicare, check whether the plan will apply this reduction too.

One commercial payer’s current policy

Commercial plans write their own modifier 25 rules, and they change often. As one example of what to look for, Cigna’s commercial reimbursement policy R30 (last updated February 18, 2026) says:

an E/M with modifier 25 billed with a joint injection code on the same date, with the same or a similar diagnosis, is not separately reimbursed without documentation supporting modifier 25
99211 with modifier 25 on a professional claim is not separately reimbursed
a preventive visit (99381–99397) with a problem visit (99202–99215) on the same day is one of the allowed exceptions to its rule against two E/M codes on one date

Read each plan’s current policy, note the date on it, and check it again when the plan sends its annual updates. Policies by other payers that circulated in past years may have been withdrawn or changed since.

A checklist for modifier 25 claims

The note shows a problem was evaluated beyond the decision to do the procedure or the preventive service.
Major surgery decision visits use modifier 57, not 25.
No 99211 with modifier 25 alongside vaccine or drug administration.
For Medicare in 2027, flag 0-day procedures billed with a modifier 25 office visit so expected payment reflects the 80% rule.
The patient was told before the visit that a problem visit can carry its own cost sharing.
You have each major plan’s current modifier 25 policy on file, with its date.

For the same rules in pediatrics, see well-child and sick visits on the same day. For visits after surgery, see global surgery periods.

Sources

General information, not advice on a specific claim, contract or legal question. Rules and rates change; check the linked sources for the current version. CPT® is a registered trademark of the American Medical Association. Code descriptions here are paraphrased.