Optimizing Physician Compensation: Modifier 51 Analysis and the Impact on Physician Compensation

After a merger in 2023, some specialists noticed their work relative value units (wRVUs), a key factor in determining pay, started to drop, raising concerns among physicians. Our consultants were engaged to perform a claims audit that independently applied modifier 51 logic to more than one million rows of billing data.

We used advanced data tools to clean and analyze the client’s billing information, creating tables and visualizations to identify trends and pinpoint the timeline of changes. Leveraging our expertise with the Medicare Claims Processing Manual and reimbursement policies, we applied Medicare’s coding logic to assess modifiers' proper use and impact.

We suspected the sudden decline in wRVUs was linked to new management’s handling of Modifier 51 (multiple procedure) rules. Many payers will apply multiple procedure reductions and advise the modifier to be excluded from data submissions. Since these modifiers are excluded from billing data, we surmised the client’s previous processes may have inadvertently ignored many multiple procedure discounts that were subsequently captured under new management processes. To test this theory, we applied special logic to test claims over an extended historical period to determine which services qualified for discounts.