A proposed Medicare payment cut tied to Modifier 25 could reallocate approximately $889 million in annual Medicare fee-for-service payments, according to an analysis from Jiro Health.
Private practices and solo physicians would account for $724.4 million, or 81.5%, of the modeled reductions, according to a Sept. 24 news release. Six specialties would account for approximately $732 million, or 82.3%, of the total modeled reductions.
Dermatology alone would account for $395.4 million, or 44.5%, while podiatric medicine and surgery, orthopedic surgery, otolaryngology, ophthalmology and family medicine would account for an additional approximately $336 million combined.
Modifier 25 indicates that a significant, separately identifiable evaluation and management service was provided on the same day as another procedure. Under the proposed 2027 Medicare Physician Fee Schedule, CMS would pay the highest-valued service in full and reduce each other-qualifying service by 50% when a separately identifiable office or outpatient evaluation and management service is provided on the same day as a procedure with a zero-, 10- or 90-day global period.
“This proposal is often discussed as a technical payment change. The data shows something much larger: a nearly $1 billion annual impact concentrated among private practices and a small number of specialties,” Jiro Health CEO Greg Field said.
CMS’ public comment period closed Sept. 14. Jiro’s review of the public docket identified more than 10,000 comments referencing Modifier 25, with roughly 85% containing explicit language opposing the proposal.
Jiro analyzed deidentified Medicare fee-for-service claims covering October 2024 through September 2025 across 67,018 billing providers. Any finalized changes would take effect Jan. 1, 2027.
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