Anthem Walks Back Onerous Modifier -25 Payment Reduction Policy in the Face of CPMA Led Opposition


This past fall, Anthem Blue Cross notified physicians in several states (including California) that effective January 1, 2018, it would reduce reimbursement of evaluation and management (E&M) services billed with modifier -25 by 50 percent. The California Podiatric Medical Association (CPMA) immediately sprang into action and coordinated with the American Podiatric Medical Association (APMA), the California Medical Association, the American Medical Association and the American Association of Dermatologists, along with many other state and specialty organizations, to push back on the proposed change.

CPMA’s efforts were spearheaded by Past President Franklin Kase, DPM, FACFAS, Chair, CPMA Health Policy Committee. It was Dr. Kase who made possible the direct talks with Anthem’s leadership on the issue. Dr. Kase was at the table and involved in all discussions on the matter.

Due to the overwhelming, coordinated opposition from organized medicine, Anthem recently announced it would reduce the magnitude of its modifier -25 payment cut from 50 percent to 25 percent, and would delay implementation until March 1, 2018. Anthem will be issuing formal guidance to network physicians communicating these changes within the coming weeks.

While this is an improvement on Anthem’s original planned policy, CPMA is still strongly oppose this unjustified major reduction in physician payment. CPMA will continue to work with APMA and others to seek full retraction of the Anthem policy. 

“We are still in vigorous discussions and hope to eliminate this onerous and unjust policy altogether, but the delay and the modification have effectively saved CPMA members a significant amount of money this year,” said Dr. Kase. 

In the meantime, physicians are urged to thoroughly review and assess the impact any proposed contract modifications would have on their individual practices.

 Physicians should also be aware that California law requires health plans and their contracting medical groups/IPAs to provide 45 business days’ advance notice of a material change to a contract, manual, policy or procedure. A change is considered “material” if “a reasonable person would attach importance [to it] in determining the action to be taken upon the provision.”

 Physicians have the right to terminate an agreement prior to the implementation of a proposed material change.