Navigating the intricate medical billing landscape is a formidable challenge in itself, but when it comes to dermatology medical billing, the complexity reaches an entirely new level. Whether you’re a seasoned practitioner or a novice, here lies your guide to overcoming dermatology billing challenges.
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What This Article Covers
- What Is Dermatology Medical Billing?
- Common Codes
- Revenue Cycle Management
- Overcoming Billing Challenges
- Best Practices
- Outsourcing Medical Billing and Coding
- Next Steps
What Is Dermatology Medical Billing?
Dermatology medical billing is the process of accurately documenting and submitting medical claims for dermatological procedures and services to insurance companies or other relevant payers.
It requires an understanding of medical coding, insurance policies and regulatory compliance.
Common Codes
Dermatology billing codes use a standard alphanumeric system to classify various services for accurate communication with insurers. We’ve highlighted some common codes below.
Skin Biopsy
You use these codes when a dermatologist removes skin samples from the surface of the body for examination.
| CPT Code | Description |
|---|---|
| 11102 | Tangential biopsy of skin; single lesion |
| 11103 | Tangential biopsy of skin; each separate or additional lesion |
| 11104 | Punch biopsy of skin; single lesion |
| 11105 | Punch biopsy of skin; each separate/additional lesion |
| 11106 | Incisional biopsy of skin; single lesion |
| 11107 | Incisional biopsy of skin; each separate/additional lesion |
| 40490 | Biopsy of lip |
| 69100 | Biopsy of the external ear |
Lesion Removal
You use these codes when a dermatologist removes benign, premalignant or malignant lesions.
| CPT Code | Description |
|---|---|
| 17000 | Destruction of premalignant lesions; first lesion |
| 17003 | Destruction of premalignant lesions; second through 14 lesions |
| 17004 | Destruction of premalignant lesions; 15 or more lesions |
| 17110 | Destruction of benign lesions other than skin tags or cutaneous vascular proliferative lesions; up to 14 lesions |
| 17111 | Destruction of benign lesions other than skin tags or cutaneous vascular proliferative lesions; up to 15 or more lesions |
| 11200 | Removal of skin tags; up to and including 15 lesions |
| 11201 | Removal of skin tags; each additional 10 lesions |
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Urticaria
You use these codes for urticaria or hives, a skin condition with red, itchy and swollen welts.
| CPT Code | Description |
|---|---|
| L50 | General code for urticaria |
| L50.0 | Allergic urticaria |
| L50.1 | Idiopathic urticaria |
| L50.2 | Urticaria due to cold and heat |
| L50.3 | Dermatographic urticaria |
Acne
You use these codes to specify disorders of skin appendages.
| CPT Code | Description |
|---|---|
| L70.0 | Acne vulgaris |
| L70.1 | Acne conglobata |
| L70.2 | Acne varioliformis |
| L70.3 | Acne tropica |
| L70.4 | Infantile acne |
| L70.5 | Acne excoriee des jeunes filles |
| L70.8 | Other acne |
| L70.9 | Acne, unspecified |
Mohs Surgery
You use these codes for Mohs surgery, a technique to remove skin cancer in layers and check each layer for cancer cells.
| CPT Code | Description |
|---|---|
| 17311 | First stage of Mohs surgery for lesions on complex locations; up to 5 blocks |
| +17312 | Each additional stage of Mohs surgery for lesions on complex locations; up to 5 blocks |
| 17313 | First stage of Mohs surgery for lesions on trunk, arms or legs; up to 5 tissue blocks |
| +17314 | Each additional stage of Mohs surgery for lesions on trunk, arms or legs; up to 5 tissue blocks |
| +17315 | Each additional block after the first 5 tissue blocks for any location |
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Revenue Cycle Management Process
Given the unique spectrum of dermatology services, you need to follow a specialized revenue cycle management process. We’ve highlighted the same below.
Patient Registration
You need to collect and verify your patient’s personal and insurance information, such as name, date of birth, address, phone number, email and policy number.
You also need to inform them about their financial responsibilities and payment options.
Don’t forget to obtain prior authorizations for procedures or treatments that require preapproval from insurance companies.
Insurance Eligibility Check
Before the patient’s appointment, you should contact their insurance provider to confirm their:
- Insurance status and validity
- Service benefits and coverage
- Financial responsibilities (co-payment, deductible and out-of-pocket expenses)
- Prior authorization or referral needs
- Network status for your services
Insurance eligibility checks help you avoid claim denials and rejections, reduce billing errors, increase patient satisfaction, and optimize your revenue cycle.
Charge Entry
You need to record billable items like treatments, procedures and medications from the patient’s visit.
You might face some difficulties while capturing charges for the same procedure on different skin areas in one visit. Different skin areas relate to different organ systems, which change billing and coding rules.
You should double-check for any discrepancies between the services rendered and the charges entered to avoid billing errors.
Medical Coding
Translate provided medical services into appropriate billing codes, such as ICD-11 and CPT/HCPCS. This step is crucial for accurate claim submission and reimbursement.
Claim Submission
Compile all the relevant information, including patient details, insurance information, billed charges and medical codes into a structured claim format.
Most insurance companies accept the CMS-1500 claim format, but you should recheck with your patient’s insurance provider to avoid denials. Then, submit the claim electronically using appropriate channels.
Pay attention to submission deadlines, as late submissions might result in rejections.
Denial Management
If the insurance provider denies your claim, investigate whether the denial cause is due to coding errors, missing information or coverage disputes. Rectify the issue promptly and resubmit the claim.
Effective denial management is essential to prevent revenue loss and maintain a steady cash flow for your dermatology practice.
Payment Posting
You need to record and reconcile payments received from both the payer and the patient. Verify that the payment aligns with the expected reimbursement and justify any adjustments or deductions.
Additionally, you need to apply the payment to the correct account and service line and update the patient’s balance accordingly.
Data Reporting
You should generate and review accounts receivable, payment collection and denial reports. You can use business intelligence tools or business analytics systems to identify trends and make strategic decisions.
To maintain a healthy revenue cycle, we recommend you measure and monitor AR days. A high AR percentage may mean problems with claim submission, follow-up or insurance payment.
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Overcoming Billing Challenges
In the world of dermatology, effective medical billing encounters unique obstacles. However, strategies exist to conquer these hurdles. We’ve outlined the same below.
Coding Accuracy
Coding errors are like rain on a freshly painted canvas — they blur the picture insurers need to see. A single misstep in assigning codes to procedures like excisions, biopsies, phototherapy and cosmetic transformations can result in claim denials and payment delays.
Let’s not forget the mischievous duo: upcoding and undercoding.
Imagine you ordered a regular-sized pizza but got charged for an extra-large. That’s upcoding! It’s using a bigger code for a service than it actually deserves. While it might seem like a good deal, it’s not fair or honest.
Now think of getting charged for a kid’s meal when you ordered a combo. That’s undercoding! It’s using a smaller code for a service even if it was more complex.
Solutions
- Conduct regular training sessions for your coding/billing staff to keep them updated about the latest coding changes and compliance needs.
- Perform regular audits to identify and correct billing errors and inconsistencies.
- Use a medical billing solution to access built-in coding databases.
Complex Processes
Manually handling claims and patient payments takes time. You need to navigate through paperwork, cross-reference information and perform repetitive tasks, leading to extended processing times and revenue bottlenecks.
Solutions
- Use medical tools and medical practice management applications to incorporate automation into your medical billing processes to reduce errors and save time.
- Build good relationships with insurance companies to negotiate better contracts, resolve disputes faster and receive timely payments.
Documentation
You use Modifier 25 when you provide an E/M service and a minor procedure on the same day, whereas you use Modifier 59 when you perform two separate and distinct procedures or services on the same day.
You need proper documentation to support these modifiers. Otherwise, insurance companies may question the medical necessity of billed services, leading to claim denials, reimbursement delays and even audits.
Solutions
- Use dermatology EMR/EHR systems to maintain accurate patient documentation.
- Document every patient encounter in detail, including the chief complaint, diagnosis, treatment plan and follow-up instructions. Include any relevant tests, biopsies or excisions.
Changing Regulations
The health care industry is subject to frequent regulatory changes. Keeping up with these changes such as updates to ICD-11 and CPT codes is crucial. Failure to comply with new regulations can result in claim denials or financial penalties.
Solutions
- Attend workshops, webinars or seminars focused on billing updates.
- Subscribe to newsletters and online forums that provide timely updates.
- Conduct routine audits to ensure compliance.
Prior Authorization
Some dermatological procedures require prior authorizations from insurance companies — you need to submit detailed information about the medical necessity of the procedure before performing it. Failure to obtain prior authorization can result in claim denials or non-reimbursement.
Solutions
- Create a dedicated system to track and manage prior authorizations.
- Familiarize yourself with each payer’s prior authorization requirements.
Insurance Verification
Verifying patients’ insurance coverage and benefits is time-consuming but critical. Without proper verification, you might not be aware of coverage limitations, pre-authorizations or patient responsibilities. This can lead to unexpected billing issues and disputes.
Solutions
- Verify your patient’s insurance coverage before providing services.
- Create standardized insurance verification forms that capture all necessary information.
- Explore advanced technology solutions that use artificial intelligence (AI) to streamline insurance verification processes.
Unbundling Errors
Unbundling is the practice of billing separately for services that you should bill together under a single code. It’s considered unethical and can trigger audits or penalties.
Solutions
- Familiarize yourself with bundled codes that encompass a group of related services.
- View the National Correct Coding Initiative (NCCI) edits maintained by the Centers for Medicare & Medicaid Services (CMS) to get guidance on code bundling.
Outdated Patient Information
Keeping patient information current is crucial in dermatology billing. Outdated details can create challenges like:
- Insurance Hurdles: If insurance details are outdated, payers will deny your claims. It’s like trying to use an expired coupon — it won’t work.
- Missed Communication: With old contact info, patients can miss important calls and reminders. It’s like having a bad phone connection — you can’t get the message through.
- Patient Discontent: Patients expect accurate billing. Incorrect details can lead to wrong statements.
- Financial Impact: Inaccurate info affects payments. Denied claims mean less money.
Solutions
- Train your front desk staff to ask patients to review and update their information at each visit. Have them verify personal details, contact information, insurance details and any changes to medical history.
- Request patients to update their information on an annual basis, even if they haven’t visited your clinic in a while.
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Best Practices
We’ve outlined some dermatology billing best practices to help you fortify your financial health and streamline administrative processes.
Submit Clean Claims
A clean claim is one that’s free from errors, inaccuracies and inconsistencies. When you submit clean claims, insurance companies can process them more efficiently, leading to quicker reimbursement.
Understand the Coding System
You should have knowledge of different coding systems to produce accurate medical bills. The three main coding systems include:
- CPT: You use them to describe medical services and procedures. They cover services such as biopsies, excisions, lesion removals and other procedural interventions.
- ICD-11: You use these codes to document diagnoses and conditions.
- HCPCS: You use these codes, specifically Level II codes, to identify dermatology-related equipment and supplies.
Submit Claims on Time
Insurance companies often have specific timeframes within which you should submit claims. Late submissions can lead to claim denials or delays in processing. Always submit claims on time.
Monitor Unsettled Claims
By addressing unpaid claims, you’re taking steps to collect the money you’re owed. Timely payments enable you to cover operational costs and invest in your practice growth.
Use Digital Tools
Digital tools streamline billing processes, making tasks such as claim submission, coding and payment posting faster and more efficient. Integrated digital charge capture enables you to assign codes to help you prevent lost or missed charges, enhancing accuracy and saving time.
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Outsourcing Medical Coding and Billing
Outsourced billing services help you manage complex medical billing processes and maximize revenue with accurate and transparent financial records.
We’ve listed some benefits of outsourcing medical coding and billing tasks below.
Minimal Denials
According to Experian’s State of the Claims 2022 report, 42% of respondents said that denials are increasing. And denied claims mean delayed reimbursements, extra administrative work and potentially lost revenue.
When you outsource, experienced billing professionals handle your claims. They have a deep understanding of coding rules and regulations. This reduces the chances of claim denials due to coding errors, missing information or improper documentation.
Lower Operating Costs
Outsourcing eliminates the need to hire, train and manage an in-house billing team. You save on salaries, benefits, office space and the cost of billing software, helping you allocate resources to core medical activities while maintaining financial efficiency.
Higher Patient Satisfaction
When patients step into your practice, they want your undivided attention. They want to feel heard, understood and valued. But if your staff is tangled in the web of billing intricacies like coding, claim submissions and follow-ups, their focus might shift away from what truly matters — the patient.
By entrusting your billing processes to seasoned experts, your team can provide better attention to patients, leading to improved patient satisfaction.
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Next Steps
Dermatology medical billing is a complex process that requires accuracy, efficiency and compliance. You need to follow coding guidelines and standards, document every patient encounter in detail, verify insurance coverage and eligibility, submit clean claims, and monitor key performance indicators to keep your practice running.
To streamline this process, you can invest in medical billing solutions. But how do you choose the right one for your business? Don’t worry!
You can access our free comparison report to compare multiple solutions simultaneously. It also displays individual product scores, benefits, and functional, technical and vendor requirements.
What strategies do you believe are most effective in ensuring accurate dermatology medical billing while maintaining a patient-centered approach to care? Please let us know in the comments below.