CMS 2027 Proposed Rule: How Modifier 25 Changes Could Impact Podiatry Practices

The podiatrist examines a patient who has a worsening foot ulcer considers infection risks updates the diabetic patient’s treatment plan and performs a wound procedure that is necessary all during the same appointment. The podiatrist’s evaluation uses judgment that goes beyond the wound procedure alone. Under existing Medicare billing rules the practice can report an identifiable evaluation and management (E/M) service, with Modifier 25 when the documentation supports it.

However, the CMS 2027 proposed rule could significantly change payment for these encounters.

What Is CMS Proposing for Modifier 25 in 2027?

CMS has proposed a multiple-procedure payment reduction approach for certain office and outpatient E/M services reported with Modifier 25.

Under the proposal, when a physician or another physician in the same group furnishes a separately identifiable office/outpatient E/M visit on the same day as a procedure with a 0-, 10-, or 90-day global period:

• Medicare would pay the highest-valued applicable service at 100%.

• Other covered surgical procedures or E/M services involved in the same-day payment calculation would receive 50% of their applicable payment.

• The policy would apply even when the E/M service qualifies as significant and separately identifiable.

CMS argues that same-day services may share resources already reflected in the payment for the surgical procedure, creating potential payment overlap.

The agency also requested comments on whether a different reduction percentage would be appropriate and whether similar policies should apply to other E/M service categories.

Current Modifier 25 Billing vs. the 2027 Proposal

Important: The proposed policy does not automatically reduce every E/M visit by 50%. Its effect depends on the combination of services, their global periods, and their relative payment values.

Why the Modifier 25 Proposal Matters for Podiatry Practices

Podiatry often involves evaluation and procedural treatment during the same visit.

A patient might come in for foot management and need debridement. Another patient could arrive with worsening pain. Require an evaluation, before a proper nail procedure. These situations often involve decision-making that goes beyond the typical work included in the procedure itself.

When physicians appropriately report both services, Modifier 25 distinguishes the additional E/M work.

The proposed rule could lower reimbursement even when documentation supports the services.

This creates several concerns for podiatry practice owners.

1. Reduced Revenue From Same-Day Visits

Practices that regularly bill an E/M service alongside a qualifying procedure may receive less revenue per encounter.

A small reduction in individual claims can become significant when repeated across hundreds of Medicare patient visits.

2. Greater Financial Pressure on Small Practices

Independent podiatry clinics must cover staff salaries, clinical supplies, equipment, documentation systems and administrative expenses.

Reduced payments on eligible same-day encounters could narrow operating margins without reducing the clinical work required.

3. Continued Documentation Requirements Despite Lower Payment

Even with reduced reimbursement, practices would still need to establish why the separate E/M visit was medically necessary.

Clinical records must distinguish additional evaluation and management from routine services included in the procedure.

4. Increased Need for Revenue Forecasting

Practice owners may need to take a look at their projected Medicare collections the way they bundle procedures and the specific billing rules from each payer before locking in their 2027 budgets.

The American Podiatric Medical Association (APMA) has expressed concern over drops in payments. In comments released on September 14 2026 APMA said the total impact of the proposed Physician Fee Schedule could lower Medicare payments, to physicians by about 6 percent.

This estimate includes the effect of several proposed payment changes—not just the use of Modifier 25.

How Much Revenue Could Podiatry Practices Lose?

Consider a podiatry practice that reports an eligible E/M service and surgical procedure during the same visit.

The following example uses hypothetical Medicare-approved amounts to illustrate the payment methodology.

Example assumes the procedure is the higher-valued service and no other payment adjustments apply. Amounts are illustrative, not actual Medicare fee schedule rates.

If the clinic has 100 visits each month the shown drop would add up to $5,000 every month or $60,000 every year assuming the number of services and the way they are paid for stays the same.

The real money effect will be different depending on the types of procedures the level of evaluation and management adjustments for where Medicare’s located current reductions, for multiple procedures and the rules that are finally decided.

Podiatry Services Most Likely to Be Affected

The proposed Modifier 25 payment changes deserve particular attention in podiatry because physicians frequently assess an underlying condition and perform a procedure during the same encounter.

The following examples illustrate situations worth reviewing. They do not establish automatic eligibility for separate E/M billing.

These CPT codes are examples, not a definitive list of procedures affected by the proposal. Confirm each code’s Medicare global-period indicator, coverage requirements and applicable coding instructions.

Example: Diabetic Foot Ulcer Management

A patient with diabetes goes to a podiatrist because a foot ulcer is getting worse. The physician checks the blood flow in the foot looks for signs of infection reviews how well blood sugar is being controlled and decides if more tests or specialist care are needed.

At the time the physician does a wound debridement that is medically necessary.

If the physician spends time and effort on evaluation and management—beyond what is normally expected before or after the debridement—then it may be right to report the evaluation and management service separately using Modifier 25.

Under the proposed 2027 payment plan Medicare might pay less for the lower-valued service even if both services meet all documentation rules.

This difference matters: the change is about payment amounts not, about removing the need to document separately when services are truly distinct. The clinical documentation rules still apply.

Modifier 25 Documentation Requirements: What Podiatrists Should Know

A reduced payment rate would not eliminate the need for accurate documentation.

CMS continues to require medical records to support the necessity of both the reported E/M service and the procedure.

For Modifier 25, the physician must document work that exceeds the usual preoperative and postoperative care included in the procedure.

A compliant record should clearly establish:

• Reason for the visit: Why the patient required clinical evaluation.

• Separate medical decision-making: What additional problems the physician assessed or managed.

• Clinical findings: Relevant examination findings and information reviewed.

• Treatment decisions: Changes in medications, diagnostic testing, referrals, or ongoing management when clinically appropriate.

• Procedure details: A distinct record supporting the procedure performed.

A separate diagnosis is not always necessary. Medicare permits the same diagnosis to support both services when the E/M work is significant, separately identifiable and properly documented.

When Modifier 25 May Not Be Appropriate

Consider a patient who presents with an uncomplicated ingrown toenail.

The podiatrist examines the toe, confirms the problem, explains the procedure, obtains consent and performs a nail avulsion.

If the physician performs no significant E/M work beyond the normal assessment and decision to perform the minor procedure, the encounter generally does not support a separate E/M service with Modifier 25.

An extensive note alone cannot establish separate medical necessity.

Podiatrists should document the actual services performed rather than add unnecessary details solely to support another billing code.

How the Proposed Rule Could Affect Podiatry Claim Management

Although the most immediate concern is reimbursement, the change could also affect billing operations.

More Attention to Claim-Level Payment Variations

Podiatry billing teams may need to compare actual Medicare payments against updated fee schedule expectations.

Without accurate payment estimates, reduced reimbursements could be mistaken for underpayments or processing errors.

Increased Importance of Coding Accuracy

Modifier 25 cannot be used simply because an E/M visit and procedure occurred on the same date.

Incorrect modifier reporting can lead to denials, record requests, claim corrections and compliance concerns.

The Department of Health and Human Services Office of Inspector General has also identified same-day E/M services paid without Modifier 25 as an active review area, further emphasizing the importance of accurate claims processing.

Payer-Specific Reimbursement Differences

The CMS proposal concerns Medicare Physician Fee Schedule payment policy.

Commercial insurers and Medicare Advantage plans may follow different contract terms and reimbursement methodologies.

Practices should not assume that every payer will adopt the same payment reduction.

For podiatry clinics operating in New York City, this makes payer-specific contract review particularly important.

Five Steps Podiatry Practices Should Take Before 2027

Rather than changing clinical practices in response to an unfinalized rule, podiatrists can prepare by reviewing existing billing patterns and financial exposure.

Importantly, practices should not separate medically necessary visits and procedures into different appointments solely to increase reimbursement. Treatment scheduling must remain driven by patient needs and clinical judgment.

How NYC Medical Billing Can Help Podiatry Practices Prepare

For podiatrists the upcoming 2027 changes show how important accurate coding and steady revenue cycle oversight are for podiatrists.

NYC Medical Billing helps healthcare practices with billing services coding reviews, claim management, denial follow-up and reimbursement monitoring.

A structured billing process can help podiatry practices spot wrongly reported modifiers check claims and review reimbursement trends as Medicare policies change for podiatrists.

These actions cannot stop a payment cut set by Medicare. They can help podiatrists tell real reimbursement changes, from avoidable coding mistakes and billing inefficiencies.

Frequently Asked Questions

Will Medicare eliminate Modifier 25 in 2027?

No. The proposed rule does not eliminate Modifier 25. It would change reimbursement for certain same-day office/outpatient E/M services and procedures when the specified conditions apply.

Will all podiatry E/M visits receive 50% less payment?

No. The proposal targets qualifying same-day combinations involving office/outpatient E/M services and procedures with 0-, 10-, or 90-day global periods. The highest-valued applicable service would receive full payment, while other services subject to the policy would receive reduced payment.

Does Modifier 25 require two different diagnoses?

No. Different diagnoses are not mandatory. The physician must demonstrate that the E/M service involved significant, medically necessary work beyond what is normally included in the procedure.

Can podiatrists still bill an E/M visit with nail debridement?

Yes, when the clinical record supports a significant and separately identifiable E/M service and all applicable Medicare billing requirements are met. Performing nail debridement does not automatically justify billing another visit.

When will the CMS 2027 Modifier 25 changes take effect?

The proposed implementation date is January 1, 2027. However, the policy must first be finalized. Practices should review the final CMS Physician Fee Schedule before treating the proposal as an active payment requirement.

Final Thoughts: Preparing for Potential Medicare Payment Changes

The CMS 2027 proposed rule presents a meaningful reimbursement concern for podiatry practices that routinely provide separately identifiable E/M services alongside procedural care.

If CMS finalizes the policy as proposed, qualifying encounters could generate less revenue despite unchanged clinical responsibilities and documentation standards.

Podiatrists should focus on three priorities: understanding their current Modifier 25 utilization, documenting separately identifiable services accurately and measuring their potential financial exposure.

Preparation today can help practices make informed billing and operational decisions when CMS announces its final policy.

Protect Your Podiatry Practice Revenue

Medicare payment changes can make an already demanding billing process more difficult. Your practice needs accurate modifier reporting, consistent follow-up and a clear understanding of where reimbursement may be affected.

Get Podiatry Billing Support Before the 2027 Changes Arrive

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