Dermatology deals with skin, its structure, functions, and ailment. The fact that it is the largest organ of the integumentary system indicates the wide scope of dermatology.  This forces dermatologists to go through a multitude of medical procedures and treatments under their umbrella. The wide array of cosmetic procedures contributes to abundant administrative responsibilities, increasing stress and burden. Furthermore, dermatology billing comes with numerous complexities that increase the chances of errors.  Negligence of these errors can lead to revenue loss and financial instability.

This blog is the ultimate guide to dermatology billing, showcasing insurance policies and procedures, common billing challenges, and how a good medical billing company can help achieve financial stability in the long run.

Introduction to Dermatology Billing

 

Dermatology practices face distinct billing issues due to their complexity and services. From routine skin exams to specialized procedures like Mohs surgery or cosmetic treatments, precise billing techniques are pivotal to maximizing revenue while complying with evolving payer-specific regulations.

 

Common Billing Codes in Dermatology Billing

 

Accurate and precise billing codes in dermatology are crucial for an efficient billing process. There are two primary coding systems, CPT and ICD-10 codes, utilized in dermatology billing. These codes range from minor office visits to complex procedures like excisions or biopsies.  Some of the codes are mentioned below.

CPT Codes

These codes indicate medical, surgical, and diagnostic services:

• 11100: Biopsy of skin, subcutaneous tissue, and/or mucous membranes (single lesion)
• 17000: Destruction of premalignant lesion (first lesion).
• 17311: Mohs micrographic surgery, including the removal of all gross tumors.
• 96910: Photochemotherapy; Tar and ultraviolet B (Goeckerman treatment) or petrolatum and ultraviolet B.

ICD-10 Codes

These codes represent diagnoses. Some examples might include:

• 0: Acne vulgaris
• 1: Other seborrheic keratosis.
• 311: Basal cell carcinoma of the skin of the nose.

Evaluation and Management v/s Procedures

 

Evaluation and Management, also known as E/M, is a medical coding process utilized by dermatologists to represent services to patients. E/M codes are five-digit CPT codes that range from 99202 to 99499. In dermatology billing, accurate utilization of E/M codes in conjunction with procedural billing is pivotal for getting appropriate reimbursement for the services provided.  E/M services can be billed along with treatment if the visit includes a separately identifiable service, such as when a patient presents with a new or complex condition requiring significant evaluation and management.

However, recent clarifications have indicated that minor procedures such as mole removal, biopsy, or botox injections are not billable for E/M services unless a distinct, documented evaluation process is involved.

Insurance Policies and Procedures Covered Under Dermatology Billing

Navigating the complexities of various insurance policies and procedures is a major aspect of dermatology billing. Different insurance plans have varied coverage criteria, copays, and deductibles, but understanding these variations is essential for precise billing and timely reimbursement.

• Medicare and Medicaid: These government programs have unique dermatological billing criteria. For example, Medicare may pay for dermatological services that are medically necessary but not cosmetic procedures.
• Tricare: It covers dermatology services for the diagnosis and treatment of skin disorders, which include medically necessary treatment for acne, Photodynamic therapy, and Photochemotherapy.
• Commercial Insurance: Commercial payers have their own set of regulations and policies for dermatological services. Fostering positive relationships with the payers may help them understand and navigate the policies better.
• Worker’s compensation: Dermatology billing is included under worker’s compensation in the United States if an injury or skin disorder has occurred due to any work-related incident.

The Unique Challenges in Dermatology Billing

 

Dermatology billing is fraught with unique challenges due to the nature of the treatments and services provided. Addressing these challenges in a timely manner is essential to retaining efficiency in the billing process.

1. Medical Necessity

One of the key aspects of successful billing is establishing medical necessity for the services rendered. For this, payers usually require a document that justifies the reasons for rendering the services. For example, treatments such as botox injections, laser hair removal, or certain skin resurfacing procedures may not be covered by insurance unless they are deemed medically necessary. Failure to present medical necessity for the treatments will lead to claim denials, resulting in revenue loss for the providers.

2. Inadequate Documentation

Dermatologists maintain clear and thorough patient records that outline the patient’s condition, the need for treatment, and the outcomes. Incomplete or inadequate documentation makes invoicing for dermatology difficult, resulting in fewer reimbursements and financial instability.

3. Handling Cosmetic and Elective Procedures

Dermatology billing faces unique challenges in distinguishing between medically necessary services and elective or cosmetic procedures, as many practices offer a blend of both, which is often not covered by insurance plans. A lack of understanding of these insurance plans can have adverse effects on the claims, leading to denials and fewer reimbursements. Transparent processes for cosmetic billing, including upfront payment policies, transparent pricing, and patient communication, are crucial for a streamlined revenue cycle.

4. Prior Authorization

Obtaining prior authorization is crucial in dermatology billing, especially for high-cost or specialized treatments such as biologic therapies. Payers require prior authorization to ensure medical necessity and insurance coverage of the patients. Failure to obtain prior authorization can lead to enhanced claim rejection rates, leaving the patient responsible for the cost of the services.

5. Denial Management

Despite best efforts, claim denials occur in dermatology practices due to coding errors, missing information, or changing payer regulations. A robust denial management strategy is necessary to mitigate these discrepancies, improve cash flow, and enhance operational improvements.

 

How a Specialized Medical Billing Company Can Help

Given the challenges in Dermatology practice, outsourcing the services to a specialized company can bring many opportunities. Here’s why a specialized billing company can be a better option for your practice:

1. Expert Knowledge

Specialized billing companies understand the intricate nuances of dermatology coding, payer policies, and reimbursement protocols. With years of experience in this field, dedicated billers and coders handle the complexities while allowing physicians to focus more on patient care.

2. Accurate and Complete Documentation

A specialized billing company gives equal importance to each claim and ensures they are submitted without any error. Furthermore, they ensure each piece of documentation incorporates complete patient information and accurate codes, preventing claim denials rate.

3. Cost Effectiveness

Hiring a full-time, in-house team or giving training to the in-house team can be a significant investment. However, partnering with a specialized billing company can eliminate overhead costs and free up some additional amount that can be utilized to enhance in-house operations.

4. Regulatory Compliance

Specialized medical billing companies stay updated with changing regulations, ensuring that your practice complies with regulations like HIPAA and other billing guidelines. This reduces costly fines and loss of reputation.

5. Enhanced Revenue

Incorrect or incomplete claims often result in denials or delays, impeding your revenue negatively. Specialized medical billing employs experienced billers and coders who reduce errors, thereby improving the rate of successful claims. It improves the overall bottom line of your practice.

Conclusion

Dermatology billing is a complex field that requires expertise in coding, payer policies, and compliance regulations. Accurate billing practices are vital for maintaining financial health and optimizing revenue cycles. By partnering with a specialized medical billing company, dermatology practices can enhance their financial performance and navigate insurance reimbursements and regulatory requirements efficiently, allowing them to focus on patient care.