What Did Regence Change About Modifier 25 Reimbursement?
As of September 2026, Regence BlueShield announced it will not implement a planned reimbursement policy that would have reduced Modifier 25 payments on both commercial and Medicare Advantage plans in Idaho, Oregon, Washington, and Utah. The policy had been scheduled to take effect September 1, 2026. APMA opposed the change through a formal letter campaign and direct engagement, and Regence withdrew the policy before it went live. The reversal marks the first time a major commercial payer publicly backed off a standalone Modifier 25 reimbursement cut after organized specialty pushback in the current cycle.
Why it matters now:
CMS has proposed a separate 50 percent payment cut on same-day E/M services billed with Modifier 25 in the CY 2027 fee schedule, and commercial payers are watching the federal signal. The Regence episode shows that payer-level cuts can be challenged and reversed when practices and associations act quickly.
Who is affected:
Any podiatry practice billing Modifier 25 on same-day E/M and procedure visits, which includes the majority of podiatric encounters involving diabetic foot exams, wound assessments paired with debridement, and routine foot care visits where a separate clinical issue is evaluated.
What to do:
Review current payer contracts and recent bulletins for Modifier 25 language changes, strengthen your same-day E/M documentation, and contact your state podiatric medical association if you identify a similar policy in your region.
What Regence Planned and Why It Was Reversed
Regence BlueShield, a regional Blue Cross Blue Shield affiliate operating across Idaho, Oregon, Washington, and Utah, notified providers of a new reimbursement policy affecting how Modifier 25 claims would be paid. The policy targeted both commercial insurance plans and Medicare Advantage products. Under the planned change, reimbursement for the separately identifiable E/M service billed with Modifier 25 on the same day as a procedure would have been reduced. The effective date was September 1, 2026.
APMA intervened by sending a formal letter to Regence opposing the reimbursement change, citing concerns about fair payment for medically necessary evaluation and management services. APMA emphasized that same-day E/M visits in podiatry are clinically distinct from procedures and that reducing reimbursement for those visits would discourage thorough patient evaluation. Following sustained advocacy pressure, Regence announced that it would not implement the policy.
In our experience matching providers with billing partners, payer-level reimbursement policy changes like this one often arrive with little notice. The Regence bulletin was flagged by APMA’s monitoring efforts, but many individual practices in those four states may not have been aware of the planned cut until after the reversal was announced. That gap between policy announcement and provider awareness is where revenue loss happens. The billing companies in our network monitor payer bulletins as part of their standard workflow, which is one reason practices using specialized podiatry billing support tend to catch these changes earlier than those handling billing internally.
Why Are Commercial Payers Targeting Modifier 25 in 2026?
Modifier 25 allows physicians to bill for a significant, separately identifiable E/M service performed on the same day as a minor procedure. In podiatry, that combination is common. A diabetic patient presenting for routine nail care may also require evaluation of a new wound, a vascular assessment, or a medication change. Modifier 25 ensures the physician is paid for both the procedure and the clinical decision-making that goes with the separate problem.
There are three converging pressures driving payer attention to this modifier in 2026. First, the OIG announced in March 2026 that it would review E/M claims billed alongside minor surgical procedures where Modifier 25 was not present, signaling increased federal scrutiny of same-day billing patterns. Second, the CMS CY 2027 proposed rule includes a 50 percent payment reduction for E/M services billed with Modifier 25 on the same day as a global-period procedure. The comment period on that rule closed September 14, 2026. Third, commercial and Medicare Advantage payers tend to follow CMS policy signals. When CMS proposes a payment methodology change, private payers often pilot their own version in advance of the federal rule.
Regence’s attempt fits that pattern precisely. The payer moved to implement a Modifier 25 reimbursement policy before the CMS rule was finalized. If the attempt had gone unchallenged, it could have set a precedent for other Blue Cross affiliates and national payers to follow.
How Much Revenue Is at Risk When Payers Cut Modifier 25 Reimbursement?
The revenue impact depends on practice volume and payer mix, but the exposure is substantial for most podiatry practices. CMS estimated that the proposed 50 percent federal payment reduction on Modifier 25 same-day claims would have a large negative impact on podiatry as a specialty. Podiatrists routinely bill E/M services with Modifier 25 when evaluating diabetic complications, wound progression, new musculoskeletal complaints, or vascular findings during the same encounter as a scheduled procedure.
Consider a practice that performs 40 Medicare encounters per week where Modifier 25 applies. If the average E/M reimbursement on those claims is $75, a 50 percent reduction translates to a loss of $1,500 per week, or roughly $78,000 per year, on Medicare alone. A commercial payer cutting the same modifier at even a 25 percent rate across a comparable volume creates an additional five-figure annual loss. Multiply that across multiple payers in a single practice, and the cumulative hit can reach six figures.
The risk is not hypothetical. CMS’s own specialty impact analysis in the CY 2027 proposed rule identified podiatry, dermatology, and otolaryngology as the specialties most negatively affected by the Modifier 25 policy change. That federal signal gives commercial payers a framework to build their own policies around. Practices that do not actively monitor payer bulletins for similar language are unlikely to know the cut happened until they see the underpayment on a remittance advice weeks later. For a broader view of how the 2027 fee schedule affects podiatry billing, our full breakdown covers the conversion factor reduction and RVU changes alongside this Modifier 25 proposal.
Keeping up with payer-level Modifier 25 changes across every plan in your state is a full-time job.
The billing companies in our network track these bulletins and flag reimbursement policy changes before they hit your revenue. If your practice bills Modifier 25 on same-day visits and you want a billing partner that catches these shifts early, get connected today.
What Should Your Practice Do Now?
The Regence reversal was a win, but it does not remove the broader threat. Payers across the country are evaluating similar Modifier 25 policies. These steps protect your reimbursement before the next bulletin arrives.
- Audit your current Modifier 25 documentation. Pull a sample of 20 recent claims where Modifier 25 was billed. Confirm that the medical record for each encounter documents a separately identifiable E/M service that goes beyond the procedure performed. If the note only documents the procedure and its related findings, the modifier is not defensible.
- Review every active payer contract for Modifier 25 language. Look for terms like ‘clinical validation,’ ‘pre-payment review,’ or ‘reimbursement reduction for same-day services.’ Some payers have already added Modifier 25 reduction clauses without issuing a standalone bulletin.
- Subscribe to payer bulletin feeds for every plan you participate in. Most payers publish policy updates 30 to 90 days before the effective date. Your billing team or billing company should be monitoring these systematically, not relying on word of mouth.
- Separate the E/M documentation from the procedure note. The strongest defense against a Modifier 25 audit is a medical record where the E/M service is clearly distinct in the documentation. If your EHR template combines the procedure note and the E/M assessment into one undifferentiated narrative, restructure it.
- Contact your state podiatric medical association. APMA’s success with Regence was possible because the association had a monitoring system and a rapid response mechanism. If a similar policy surfaces in your state, your state association is the fastest route to organized opposition.
- Talk to your billing partner about payer-specific denial tracking. A spike in Modifier 25 denials or reduced payments from a single payer is the earliest indicator that a reimbursement policy has changed. Your billing company should be flagging these patterns in real time, not at the end of the month.
Common Mistakes That Weaken Modifier 25 Claims
Even without a formal payer policy change, Modifier 25 claims are among the most frequently denied and audited codes in podiatry. The OIG’s December 2025 audit of podiatrists’ E/M claims found that a significant portion did not comply with Medicare requirements, with documentation gaps and incorrect coding as the primary drivers. These are the mistakes that make claims vulnerable regardless of which payer is reviewing them.
The first and most common error is billing Modifier 25 when the E/M documentation only supports the procedure. If a patient presents for nail debridement and the provider’s note documents only the nail condition, there is no separately identifiable E/M service to report. The modifier requires a distinct clinical problem, evaluated and managed independently of the procedure.
The second error is using vague or duplicative diagnoses. Billing the E/M with the same diagnosis code that supports the procedure suggests to the payer that the evaluation was not separate. If the procedure is nail debridement coded to B35.1 (tinea unguium), the E/M should be linked to a distinct diagnosis such as E11.621 (type 2 diabetes with foot ulcer) or I73.9 (peripheral vascular disease) that documents the separately identifiable clinical concern.
The third error is a timing and volume pattern that triggers automated flags. When every encounter for every patient includes Modifier 25, payer algorithms flag the practice for prepayment review. One question we hear constantly from practice managers is how to tell whether their Modifier 25 usage rate is within normal range. There is no published benchmark, but when more than 70 to 80 percent of procedure visits carry the modifier, most payers consider that a utilization outlier.
How Outsourced Billing Helps Monitor Payer Policy Changes
The Regence episode highlights a structural problem for practices that manage billing internally. A single-practice billing team is focused on claim submission, denial follow-up, and payment posting. Monitoring payer policy bulletins across five, ten, or twenty contracted plans requires a different kind of attention. When a payer issues a reimbursement policy update in a PDF attached to a provider portal notification, an in-house biller focused on daily claim volume may not see it in time to prepare.
Across the billing companies we vet, a recurring pattern is that the most effective teams have a dedicated compliance or policy monitoring function separate from daily production billing. That function reads payer bulletins, MAC notifications, and CMS transmittals on a defined schedule and pushes relevant changes to the coding and billing staff before the effective date. For podiatry practices, the payer changes most likely to affect revenue in 2026 and 2027 involve Modifier 25 reimbursement, skin substitute payment methodology, routine foot care Q modifier documentation requirements, and prior authorization expansions for DME and orthotics. Practices navigating the new MIPS 2026 Podiatry Value Pathway alongside these payer-level changes face an even higher compliance burden that makes specialized billing support worth evaluating.
Providers often come to us after discovering a reimbursement cut that had been in effect for months without anyone on their billing team noticing. By that point, the underpayments have accumulated and the window for appeals may have narrowed. A billing partner with a dedicated policy monitoring workflow prevents that lag.
Federal vs. Commercial Modifier 25 Threats in 2026
The current Modifier 25 pressure is coming from two directions simultaneously. Understanding the difference helps practices prioritize their response.
| Factor | CMS CY 2027 Proposed Rule | Regence BlueShield Policy |
|---|---|---|
| Payer type | Medicare Part B | Commercial and Medicare Advantage |
| Payment reduction | 50% on same-day E/M with global-period procedure | Reimbursement reduction on Modifier 25 claims (specific percentage not publicly disclosed) |
| Status | Proposed. Comment period closed September 14, 2026. | Withdrawn. Regence reversed the policy before September 1, 2026 effective date. |
| Scope | National, all Medicare Part B providers | Idaho, Oregon, Washington, Utah |
| Industry response | Same Day Care Coalition formed; 100+ specialty organizations filed joint comment | APMA formal letter and direct engagement; policy reversed |
| Specialties most affected | Podiatry, dermatology, otolaryngology | Podiatry and other specialties billing Modifier 25 in those four states |
The practical takeaway is that even if the CMS proposed rule is not finalized as written, commercial payers may implement their own versions independently. Practices need to track both the federal rule and individual payer policies in parallel.
Frequently Asked Questions
Modifier 25 is appended to an E/M service code when a physician performs a significant, separately identifiable evaluation and management service on the same day as a procedure. In podiatry, it applies when a provider addresses a clinical problem distinct from the scheduled procedure during the same visit.
APMA sent a formal letter opposing the policy and engaged directly with Regence leadership. The association argued that reducing reimbursement for separately identifiable E/M services would discourage thorough patient evaluation. Regence announced it would not implement the policy before its scheduled September 1, 2026 effective date.
No. The Regence policy was a separate commercial and Medicare Advantage payer decision. The CMS CY 2027 proposed rule, which includes a 50 percent reduction for same-day E/M services billed with Modifier 25, is a distinct federal policy. The two are independent, though they share the same underlying logic.
The planned policy would have applied to Regence BlueShield plans in Idaho, Oregon, Washington, and Utah. Following the reversal, providers in those states will not see a Modifier 25 reimbursement change from Regence at this time.
Monitor each payer’s provider portal and bulletin notifications. Look for language referencing clinical validation of Modifier 25, same-day E/M reimbursement changes, or pre-payment review of claims where E/M is billed alongside procedures. A sudden increase in Modifier 25 denials on your remittance advice is often the first practical indicator.
Yes. If the medical record documents a distinct, separately identifiable E/M service with a diagnosis separate from the procedure, the claim is defensible on appeal. Include the clinical documentation showing the separate problem, decision-making, and any additional orders or treatment plans that resulted from the E/M service.
The medical record must show that the E/M service involved a separately identifiable clinical problem, separate from the procedure. The note should document the history, exam findings, and medical decision-making related to that distinct problem. Using a separate diagnosis code for the E/M service strengthens the claim. The note should not merge the procedure documentation with the E/M documentation into a single undifferentiated narrative.
Next Steps
Review our guide to the CMS proposed 50% Modifier 25 payment cut for 2027 to understand the federal side of this issue. If your practice is also navigating the MIPS 2026 reporting requirements that tie into these payment changes, our overview covers the new specialty-specific pathway. For practices concerned about documentation compliance, start with the documentation audit checklist in the steps above and contact a billing partner who specializes in podiatry to review your Modifier 25 claim patterns.
Your billing team should never be the last to know about a payer reimbursement cut.
The podiatry billing companies in our network monitor payer policies, track Modifier 25 denial patterns, and defend your claims on appeal. Get matched with a billing partner who keeps your revenue protected.
