Jiro Health: Modifier 25 Rule Change Could Reduce Private Practice Revenue by Nearly $1 Billion Annually

A new analysis from Jiro Health estimates that a proposed change to Medicare payments involving Modifier 25 could reallocate approximately $889 million in annual Medicare fee-for-service payments. The findings indicate that 81.5% of the modeled reductions would be tied to private practices and solo physicians.

The proposal, part of the 2027 Medicare Physician Fee Schedule, would reduce payment by 50% for a lesser-valued service when an evaluation and management service is provided on the same day as a procedure. Jiro Health's analysis highlights that the financial impact would be concentrated among specific specialties.

Dermatology alone is projected to account for nearly $400 million, or 44.5%, of the total reduction. Six specialties, including podiatric medicine and surgery, orthopaedic surgery, otolaryngology, ophthalmology, and family medicine, would collectively absorb an additional $336 million.

"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," said Greg Field, CEO of Jiro Health. "Real-world data gives clinicians and policymakers a clearer view of who would absorb the change before it takes effect."

The Centers for Medicare & Medicaid Services (CMS) received over 10,000 comments during its public comment period, with roughly 85% opposing the proposal. The final 2027 Physician Fee Schedule is expected this fall, with any changes taking effect January 1, 2027. Jiro Health is also offering confidential, practice-level analyses to healthcare providers.