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Dermatology Billing for Intermediate Closure

December 5, 2012

Dermatology BillingHow many times during a work day does a dermatologist remove a benign or malignant lesion by excision?  If the dermatologist has a full schedule, probably three or four lesions are excised per day (if not more). These procedures are documented in the medical record, and the records are translated into medical code for billing purposes.  Accurate coding methodology leads to clean claims being submitted, and clean claims improve a dermatology practice’s financial bottom line.

Medical billing is a complex network of precise code definitions interpreted by third-party payers to ensure that a dermatologist receives appropriate payment for medically necessary services rendered.  Federal and state laws govern medical coding, in addition to administrative rulings from the U.S. Department of Health and Human Services.  Level I HCPCS codes are defined by the American Medical Association and then adopted by the Centers for Medicare and Medicaid Services.  Physician associations issue coding compliance guidelines by medical specialty.  Commercial insurers write new definitions into provider contracts that apply only to claims to that payer.  

Medical billing, medical coding, and medical documentation are specialized professions that have their own administrative bodies.  Professional coding associations and health information management associations, certify that their members are proficient in handling the back office administrative tasks that are involved in submitting timely accurate healthcare claims for reimbursement.

When a dermatologist excises a skin lesion, it is expected that he or she will close the wound created.  Current Procedural Terminology (CPT, also known as HCPCS Level I) codes define what is included and what is excluded from a particular code’s definition.  In the case of a skin lesion excision, simple closure of the wound is considered an essential component of the excision and it is not billed separately.

Some skin lesions are not limited to the dermis.  They may extend below the epidermal epithelium, requiring a more extensive excision and more than a simple closure.  

According to CPT, simple closure involves superficial wound closure to include the dermis, the epidermis, or subcutaneous fat that does not significantly involve other structures or tissues.  It is, by definition, a one layer closure.  Simple closure does not get assigned its own code when it is performed in conjunction with a skin lesion excision.  There are times, however, when a lesion requires more than a one layer closure.  More complicated closures are not bundled into a skin lesion excision.

Download: Dermatology Practice Turn Around Case Study

If a dermatologist needs to close two layers, such as the superficial (non-muscle) fascia, in addition to the dermis, it is appropriate to code and bill for both the excision and the closure.  CPT requires it and the National Correct Coding Initiative does not find this code paring medically unlikely.  The healthcare reimbursement system is designed to give dermatologists appropriate compensation for the level of service delivered.  When a wound closure is more than simple, but less than complex, it is required that the closure be reported with the codes 12031-12057 to signify an intermediate wound closure.

CPT goes further to define an intermediate level closure as defined by 12031-12057.  Single layer closure that involves a heavily contaminated wound that requires extensive cleaning or debridement is also considered to be described by these codes.  This could occur in the excision of a sebaceous cyst that the patient had scratched with an abrasive substance that caused a localized infection requiring washing and tissue exploration.

The documentation needs to support the codes assigned.  With the welter of regulations imposed on the billing process, it takes a professional to review medical records and assemble healthcare claims.  Documentation and coding specialists can identify when services can be unbundled for independent billing, and when services need to be bundled to ensure statutory and contractual compliance.



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