Physician Advocacy Halts Insurer’s Controversial Reimbursement Policy

CHICAGO, IL – April 17, 2026 – In a significant victory for organized medicine, Blue Cross Blue Shield of Michigan (BCBSM) has postponed a contentious reimbursement policy that would have cut payments for many services provided on the same day as a minor procedure. The decision, announced April 15, comes after a wave of intense advocacy from physician groups, particularly from the osteopathic medical community, who warned the policy would harm patient care and create unsustainable administrative burdens.

The proposed policy targeted a billing tool known as Modifier 25, which is critical for physicians who provide multiple, distinct services in a single patient visit. The postponement is being hailed by medical associations as a crucial win that safeguards physician reimbursement and protects patient access to timely, comprehensive care.

“This decision reflects the power of collaboration across osteopathic medical societies and reinforces our shared responsibility to protect access to high-quality care,” said AOA CEO Kathleen S. Creason, MBA, in a statement responding to the news.

A Closer Look at the Controversial Policy

Originally slated to take effect on May 1, 2026, the BCBSM and Blue Care Network (BCN) policy would have imposed a 50% payment reduction on most non-preventive office and outpatient evaluation and management (E/M) services when billed with Modifier 25 on the same day as a minor procedure. While the procedure itself would be fully paid, the E/M service—the cognitive work of diagnosing and managing a patient's condition—would be cut in half.

Modifier 25 is a CPT code modifier used to signal that a physician performed a “significant, separately identifiable” E/M service on the same day as another procedure. For example, if a patient sees a dermatologist for an annual skin check (the E/M service) and the physician also identifies and removes a suspicious mole (the procedure) during that same visit, Modifier 25 allows the physician to be paid for both the evaluation and the procedure.

BCBSM had justified the proposed change as a move to align with industry benchmarks and prevent paying twice for practice expenses it claimed were bundled into both the E/M service and the procedure payment. However, medical societies swiftly and forcefully rejected this rationale. They argued that the valuation process for medical codes, overseen by the American Medical Association and the Centers for Medicare & Medicaid Services (CMS), already accounts for overlapping practice expenses. Critics labeled the 50% cut a “duplicative and unjustified further reduction” on legitimate, necessary medical services.

The Power of a Unified Voice

The reversal marks a testament to the effectiveness of coordinated physician advocacy. The Michigan Osteopathic Association (MOA) and the American Osteopathic Association (AOA) were at the forefront of the opposition. Working in concert with specialty groups like the American Academy of Osteopathy (AAO), the American College of Osteopathic Family Physicians (ACOFP), and the American Osteopathic College of Dermatology (AOCD), they mobilized to educate the insurer on the policy's damaging consequences.

Osteopathic physicians were among the first to sound the alarm, recognizing the profound impact the policy would have on their unique approach to care. Their early and vocal concerns helped elevate the issue, prompting broader engagement from the entire Michigan medical community, including the Michigan State Medical Society (MSMS), which also engaged in aggressive advocacy efforts.

“This outcome underscores the importance of physician-led advocacy in ensuring that reimbursement policies reflect the realities of clinical practice,” said AOA President Robert G. G. Piccinini, DO, D.FACN. The delay, he noted, allows for a more thoughtful review of the policy's far-reaching implications for both physicians and patients.

Protecting OMT and Patient Access

For the osteopathic community, the fight was particularly personal due to the policy's threat to Osteopathic Manipulative Treatment (OMT). OMT is a set of hands-on techniques used by osteopathic physicians (DOs) to diagnose, treat, and prevent illness or injury. It is frequently performed during an office visit where a separate E/M service is also provided to manage a patient's overall health.

Under the proposed policy, a DO who conducted a patient evaluation and then performed medically necessary OMT in the same visit would have seen the payment for their evaluation service slashed by 50%. Physician groups argued this would create a financial disincentive to provide comprehensive, efficient care. It could force doctors to ask patients to schedule a separate appointment for the hands-on treatment, leading to delays in care, increased costs for patients through extra co-pays, and additional time off work.

Dr. Piccinini highlighted this specific concern, stating, “Modifier 25 plays a critical role in accurately capturing distinct services such as osteopathic manipulative treatment (OMT) provided during patient encounters.” The postponement ensures, for now, that this vital, patient-centered care is not financially penalized.

One Battle in an Ongoing War

The dispute over Modifier 25 in Michigan is not an isolated event but rather a symptom of a larger, national trend. Major insurance payers across the country have increasingly targeted Modifier 25 with similar payment reduction policies. Insurers like Anthem, Cigna, and Horizon BCBS have all attempted to implement or have successfully implemented policies that reduce or deny payments for E/M services billed with the modifier.

These policies are often framed by insurers as efforts to curb fraud and abuse, as Modifier 25 has historically been a focus of audits. However, provider organizations argue that these across-the-board cuts punish all physicians for the potential misdeeds of a few and unfairly bypass the established system of documentation and auditing. They contend that if a payer suspects improper billing, the correct response is to request medical records for review, not to preemptively cut payments for all providers.

While Michigan physicians can breathe a sigh of relief, advocacy groups remain vigilant. The AOA and MOA have pledged to continue monitoring developments and working with BCBSM to ensure any future policies are fair, accurate, and supportive of patient-centered care. The postponement is a pause, not a permanent cancellation, and the broader struggle to balance cost control with quality healthcare continues.