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Dermatology Billing Service with Coding Expertise

November 5, 2012

Dermatology Billing ServiceThe skin is the body’s largest organ.  It is the main medium through which the entire human body interacts with the outside world.  Because the skin is exposed to so many potential pathogens, dermatological science has developed over recent decades to treat a number of conditions through a number of procedures.  Some dermatological services are considered cosmetic by third-party payers, while others, such as the excision of basal cell carcinoma, are inarguably life-saving.  Professional medical billing specialists who specialize in dermatology coding and billing know the ins and outs of every procedure and diagnosis from a reimbursement standpoint.

No one argues that the services that dermatologists provide do not benefit patients, but there are procedures and conditions diagnosed by dermatologists that are not considered essential medical services to preserve function or promote improved health. 

Removal of skin tags (CPT 11200 and 11201) is generally considered a cosmetic procedure that is not covered by most commercial insurers or government health plans.  A skin tag is a localized benign hyperplasia of the skin that presents little threat to the overall health of the patient.  A professional medical billing specialist can review the patient record to recognize when CPT codes 11000 and 11001 are more accurate based on the documented diagnosis and reason for the procedure.  If a dermatologist submits specimens to a laboratory to rule out malignant dermal neoplasia, the diagnosis coding will reveal that the nature of the tags was in question at the time of removal, and that they were submitted to a pathologist for confirmation of the disease process involved.  The procedure performed was not a routine skin tag removal, but a biopsy. 

The language of CPT is very specific.  Codes exist for biopsies (11000 and 11001) and the method of obtaining the involved tissue does not affect the coding.  CPT specifies that biopsies can be obtained through destruction, shaves, or excision.  CPT also states that the surgical removal of an overall lesion is included in the obtaining of biopsy tissue.  Dermatologists should not bill for an excision and a biopsy during the same encounter if the same lesion is involved. 

Download: Dermatology Practice Turn Around Case Study

A dermatologist unfamiliar with the grammar and methodology of CPT may think that an excision is a biopsy, and vice versa.  The American Medical Association (AMA), the body that administers CPT methodology, is clear when it publishes that submitting representative tissue for pathologist review is a component of the shave, excision, or destruction of distinct lesions.  An excisional biopsy is still an excision, though providers are cautioned to call the delivered service an excision submitted for pathological examination rather than a biopsy.  This will eliminate confusion should a healthcare claim be audited.  Effective documentation precludes misunderstanding in the case of RAC audits, insurer QA audits, or appeals. 

Excisions themselves include a number of conundrums for dermatology providers.  The procedure code indicates whether a benign or malignant lesion is being excised.  The ICD-9-CM diagnosis code must describe a benign or malignant lesion to match the CPT code.  If they do not, the claim will be denied for not making sense, and it will have to be corrected and recoded, resulting in a loss of timely reimbursement for medically necessary services.

Excision codes are billed by the site of an excision as well as size.  When two skin excisions are preformed on a patient’s arm, for example, only one code is billed if the separate incisions were performed for the same reason.  The largest dimension of the two excisions is added together to determine the appropriate procedure code.  Some physicians still calculate the square centimeters of skin area involved and bill for that in error.  Certified medical billers and coders know how to bill dermatology procedure codes to keep a private practice free from charges of falsified or abusive billing to Medicare, Medicaid, Tricare, and commercial insurance companies.


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