CMS Proposal Would Cut Payment for Overlapping Services

The 2027 Centers for Medicare & Medicaid Services (CMS) has proposed reducing Medicare payment when certain procedures are performed during the same visit as a separately identifiable evaluation and management (E/M) service. But a new ACS analysis finds that the proposal excludes a much larger category of overlapping services. Earlier this month, an ACS Health Policy Alert explored the proposed change and its potential implications for surgeons. ACS researchers have looked deeper at the rationale behind the proposal in A Proposed Medicare Payment Cut You Should Know - Modifier 25 & Overlapping Services, Part 2.

The Issue

CMS’s proposal is based on the idea that when certain physician services are provided together, some of the work may overlap and payment should be reduced. But procedures performed with E/M visits aren’t the only services that overlap in Medicare.

The question: Is CMS applying that principle consistently?

What the ACS Found

Christopher P. Childers, MD, PhD, Don J. Selzer, MD, MS, FACS, and Thomas C. Tsai, MD, MPH, FACS, analyzed nearly 220 million office encounters in fee-for-service Medicare. Of those, 37%, or approximately 80 million encounters, included at least one additional service.

The largest category of spending on overlapping services was not among the services targeted by the CMS proposal.

Why It Matters

The analysis raises a fundamental question: If CMS believes overlapping physician work justifies reduced payment, why apply that principle to procedures performed with E/M visits without evaluating the much broader universe of overlapping services?

Overlapping services are common. For example, an analysis of nearly 11 million annual wellness visit claims found that 37% were billed alone, while 63% included at least one additional service.

What the ACS Is Doing

ACS researchers are examining the evidence behind Medicare payment policy, not just its impact. This analysis identifies potential inconsistencies in the rationale behind proposed payment policies and provides additional evidence to support ACS advocacy for fair, evidence-based Medicare payment policy.

Get Involved

This proposal is one of several Medicare payment policies the ACS is working to address, and you can help. Use SurgeonsVoice to ask your members of Congress to cosponsor the Efficiency Adjustment Delay Act and stop harmful cuts to work relative value units.