Dermatology CPT Codes and Billing Guidelines 2024

The dermatology industry is booming. Thus, as a dermatology practice or a dermatologist, you may have experienced patients crowding your front door as the demand upticks. This rise in demand should have positively impacted your revenue, but if it’s the other way around, you may need to take a step back and analyze what is not working for you!

A good practice is to start with medical billing and coding. We will discuss the dermatology CPT codes and billing guidelines, so you can take your practice to the peak of its success and enjoy a steady cash flow.

Dermatology CPT Codes 2024

Before we look at the billing and coding guidelines, let’s first explore all the relevant Dermatology billing codes:

Dermatology CPT Codes for Skin Biopsy

A dermatologist removes skin samples from the body’s surface during a skin biopsy. They then examine the collected cells to discover more about particular illnesses or skin conditions. 

• CPT Code 11102: Skin tangential biopsy (scoop, shave, curette, saucerize, etc.); individual lesion.
• CPT Code 11103: Add-on code for skin tangential biopsy, each additional lesion.
• CPT Code 11104: Punch biopsy of a single lesion and, if necessary, simple skin closure. 
• CPT Code 11105: Add-on code for punch biopsy; each additional lesion.
•  CPT Code 11106: Incisional skin biopsy, such as wedge, including, simple closure; individual lesion. 
• CPT Code 11107: Add-on code for incisional skin biopsy; each additional lesion.
• CPT Code 40490: Lip excision procedure.
• CPT Code 69100: External ear excision procedure.

Dermatology CPT Codes for Removal of Lesion

It can involve techniques such as chemical therapy, electrosurgery, laser surgery, or cryosurgery to remove premalignant, benign, or malignant lesions. Besides, you can apply multiple procedure codes if more than one lesion is removed. 

• CPT Code 17000: Destruction of premalignant lesions, such as actinic keratoses; initial lesion.
• CPT Code 17003: Destruction of 2 to 14 premalignant lesions, such as actinic keratoses.
• CPT Code 17110: Removal of up to 14 benign lesions that are not skin tags or cutaneous vascular lesions. 

Dermatology CPT Codes for Micrographic Surgery Using Mohs

During this surgical technique, skin cancer is eradicated. Mohs surgery usually involves removing the tumor’s tissue and then doing a pathologic assessment. 

• CPT Code 17311: Mohs micrographic technique on feet, hand, and neck; initial stage.
• CPT Code 17312: Mohs micrographic technique on feet, hand, and neck; each new stage.
• CPT Code 17313: Mohs micrographic technique on legs, arms, and trunk; initial stage.
• CPT Code 17314: Mohs micrographic technique on legs, arms, and trunk; each new stage.

Dermatology CPT Codes for Lesions Excisions

It involves removing lesions and the surrounding tissue through surgery.

• CPT Code 11403: Excision, benign lesions such as the trunk, margins, legs, or arms.
• CPT Code 11603: Excision, malignant lesions such as trunk, margins, legs, or arms.

Dermatology CPT Codes for Wound Healing

The wound closure complexity varies according to the extent of the repair. That is, it can be elaborate, moderate or simple.

• CPT Code 12031 and 12032: Ad interim; reconstructive; for wounds on the scalp, axilla, trunk, and limbs (but not the hands or feet). 
• CPT Code 13120 and 13121: Extensive; complications; leg, arm, and scalp repair.

Dermatology CPT Codes for Pathology

Pathology procedures investigate skin and tissue at the microscopic cellular level using advanced laboratory apparatus and assays. 

• CPT Code 88304: A level III study focuses on surgical pathology and includes both a microscopic and gross analysis. 
• CPT Code 88305: At Level IV, surgical pathology is necessary, including a microscopic and gross investigation. 
• CPT Code 88312: Special stain including report and interpretation.
• CPT Code 88341: Analyses involving immunocytochemistry or immunohistochemistry.

Dermatology CPT Codes for Laser Therapy and Phototherapy

Laser therapy utilizes various laser wavelengths to treat different skin conditions and for cosmetic purposes. Contrarily, phototherapy uses UV light to treat skin conditions like psoriasis and eczema.

• CPT Code J7308 – Topical administration with aminolevulinic acid HCL. 
• CPT Code 96567 – Treatment of malignant and premalignant. lesions with exogenous photodynamic therapy.
• CPT Code 96900 – Actinotherapy (UV light).
• CPT Code 96910 – Photochemotherapy (petrolatum and ultraviolet B or tar and ultraviolet B).
• CPT Code 96920 and 96921 – Laser treatment for inflammatory skin conditions.

Evaluation and Management (E/M) Dermatology Billing Codes

When you submit a claim for a dermatology service/procedure using E/M codes, you are required to establish whether the patient is new or returning to your medical practice. 

New Patient	Existing Patient
A person who has not received any care service from a physician or other qualified provider in your practice in the past 3 years.	A person who has received any care service from a physician or other qualified provider in your practice within the past 3 years.

Besides, you can bill based on the time or complexity of the dermatology service/procedure.

New Patient E/M CPT Codes

• CPT Code 99202 – 15 to 29 minutes. A new patient’s E/M in an office or other outpatient setting requires a medically necessary history, examination, and straightforward decision-making. 
• CPT Code 99203 – 30 to 44 minutes. A new patient’s visit to a physician’s office or other outpatient setting requires a medically necessary history, examination, and low-level decision-making.
• CPT Code 99204 – 45 to 59 minutes. A new patient’s E/M in an office or other outpatient setting requires a medically necessary history, examination, and moderate decision-making.
• CPT Code 99205 – 60 to 74 minutes.  A new patient’s E/M in an office or other outpatient setting requires a medically necessary history, examination, and high decision-making. 

Established Patient E/M CPT Codes

• CPT Code 99212 – 10 to 19 minutes. An established patient’s visit to a physician’s office or other outpatient settings requires a medically necessary history, examination, and straightforward decision-making.
• CPT Code 99213 – 20 to 29 minutes. An established patient’s visit to a physician’s office or other outpatient setting requires a medically necessary history, examination, and low-level decision-making.
• CPT Code 99214 – 30 to 39 minutes. Level IV established patient visits. It involves a detailed history, detailed examination, and moderate decision-making.
• CPT Code 99215 – 40 to 54 minutes. Highest level established patient visits. It involves a comprehensive history, comprehensive examination, and high decision-making.

Dermatology CPT Codes with Modifiers

Some dermatology billing codes include modifiers. They are as follows:

• Modifier 25 – You can use this modifier in connection with E/M CPT codes for already established patients. You can not use it with other dermatology CPT codes or for claims involving new patients. 
• Modifier 59 – This modifier with other CPT codes indicates a procedure/service, i.e., separate from other procedures/services performed on the same day.

Common Dermatology Billing & Coding Mistakes

Now that you have a complete list of all the dermatology billing codes that you will be using to submit your insurance claims, it is time to understand the common billing errors that may affect your revenue cycle:

Coding Errors

Errors in coding can present a significant challenge for dermatology billing. These mistakes happen when you incorrectly allocate codes to diagnoses and treatments. These mistakes may lead to payment delays, claim rejections, or insurance company audits.

A research study found that bills that totaled over $10,000 contained an average error of $1,300.

ABC News

Inadequate Documentation

Inadequate or missing paperwork is another frequent issue that makes invoicing for dermatology difficult. Insufficient information in medical records makes it difficult to demonstrate the medical necessity of the procedures carried out, which can result in claim denials or fewer reimbursements.

Inaccurate patient information accounts for 22% of all medical billing errors.

Gitnux

Unbundling of Services

When distinct processes or services are invoiced separately rather than as a single, all-inclusive package, this is known as unbundling. Even though this might appear a small mistake, insurance payers who favor a bundled approach may become concerned.

Inappropriate unbundling can result in significant overpayments.

AAPC

Lack of Patient Understanding

Ineffective patient communication is another major challenge affecting the revenue cycle of dermatology practices. Inaccurate billing information shared with patients may cause delays or nonpayment of invoices. Patients often lack an understanding of their insurance coverage and benefits, which could cause disagreements and payment delays.

A survey revealed that 75% of patients stated that out-of-pocket charge estimates before treatment would improve their ability to pay for healthcare services.

Globe NewsWire

Ignoring Denials

Ignoring claim denials and rejections is a major issue negatively impacting your practice’s finances. Even though proactively analyzing denials helps you understand the root cause in your medical billing workflow, it is still not advisable to rework each denied claim. Why? The reason is simple, there is a cost associated with appealing and resubmitting claims. Hence, decide wisely before reworking on a denied claim.

Claim rework costs $25 on average per claim. If you rework 100 claims a month, it will cost you $2,500 on average. This cost is exclusive of the employee’s per-hour rate and benefits.

MGMA

Dermatology Billing Guidelines

The dermatology billing guidelines describe rules and regulations associated with the reimbursement process related to the rendered dermatology care services. It involves accurately documenting and reporting the provided procedures/services aligning with the relevant insurance payer’s requirements.

A study revealed that 90% of all denied claims are preventable, while you can appeal two-thirds of these denials.

HFMA

Let’s take a look at these guidelines for quick reimbursements and a steady cash flow:

Comprehensive Documentation

The dermatology billing guide emphasizes complete and accurate documentation. As a result, dermatologists must maintain thorough records of all rendered services, including the reason for the appointment, the results of the examination, and the recommended course of treatment. Besides, proper documentation demonstrates the medical necessity of the services, preventing claim denials and rejection. 

Coding Accuracy

Another guideline is accurate coding. When you choose the appropriate and correct CPT codes for each procedure that best describes the dermatology services, the chances of claim delays, rejections, and denials reduce significantly. Besides, it steers you clear of any legal repercussions and heavy penalties. If you want to learn about dermatology CPT codes, this guide has covered them in detail above.

A research study revealed that hospital billing errors account for 63% of coding mistakes in the US.

Gitnux

Medical Necessity

Medical necessity is another dermatology billing guideline you should pay close attention to. It directs dermatologists to provide the necessary evidence or documents describing why a particular procedure or service was performed. This document should include the diagnosis of the patient’s condition. You may also need to submit other supporting documents with the diagnosis. 

Research found that 8% of claims denials were due to lack of preauthorization, 2% for medical necessity, and 14% for excluded services.

MCG Health

Use of Modifier

Modifiers are codes that denote unique situations or offer further details about a service. Under the dermatology coding guidelines, dermatologists must use correct modifiers when indicating several operations, bilateral procedures, or limited services. 

37% of claim denials are due to the use of incorrect modifiers.

Etactics

Compliance

Dermatology billing guidelines stress abiding by the law and moral principles. While charging for dermatology treatments, dermatologists must follow all applicable laws, rules, and professional norms. Penalties, fines, or even the loss of one’s professional license may follow non-compliance.

Bundle-up Services 

Another medical billing and dermatology coding guideline is to understand the varying requirements of different insurers regarding bundled treatments to avoid unbundling errors. Whenever possible, choose comprehensive billing and ensure that the codes match the rendered bundled services by cross-checking them. 

“Unbundled” charges i.e., billed individually even if they are a component of the same service package represent about 7% of medical billing errors.

Gitnux

Clear Patient Communication

Dermatology practices should employ clear and transparent communication strategies to educate patients about their financial obligations, billing procedures, and insurance coverage. Giving patients cost estimates before operations might also aid in their understanding of their financial responsibilities, resulting in faster reimbursements.

With so many billing challenges to overcome and several dermatology coding guidelines to follow, it is common for one to feel overwhelmed. But worry not, if you don’t want to handle billing and coding in-house, you can outsource dermatology billing to a professional medical billing company.

Bottom Line

Dermatology billing codes, ranging from modifiers to E/M codes and skin biopsy to lesion excision, must be used precisely during claim submission. You should focus on complete documentation, accurate coding, and compliance to counter common dermatology billing challenges and ensure a steady cash flow and healthier revenue cycle.

We hope this comprehensive guide will serve as a roadmap for your dermatology practice to handle its billing and coding requirements. However, if you still find it difficult, you can partner with a professional medical billing and revenue cycle management (RCM) service provider, like MediBill MD.