Best Practices for Dermatology Medical Billing

April 22, 2021 by Antonio Arias, MBA, CHBME

Topics: Medical Billing, Dermatology

dermatologist inspecting a patient's skin

Dermatology practices have unique medical billing and coding challenges that are specific to the specialty. Since dermatology requires both medical and surgical aspects, dermatology medical billing can be complicated and requires an in-depth understanding of dermatology CPT codes, the appropriate use of modifiers, and other factors. 

By following this guide for dermatology billing best practices, dermatology practices can optimize their billing processes and boost their revenue cycle management! Read on for the most common dermatology billing codes and tips for accurate medical billing.

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Why Dermatology Practices Need Efficient Medical Billing Processes

An accurate and efficient medical billing experience is essential for your dermatology practice to receive its maximum reimbursement for services. While every medical specialty needs precise billing procedures to receive payments in return for treatments, dermatology practices have to take extra steps to ensure accuracy. Proper medical billing for dermatology practices includes giving special attention to compliance guidelines and the specialty’s unique use of modifiers. 

Unlike other medical specialties, dermatology is multifaceted. Procedures can range from simple cosmetic surgeries to complicated skin grafts and medical billing must reflect this. Dermatologists typically see more patients than the average physician does in other specialties, so your medical billing and coding must be efficient to overcome the large size, and be as accurate as possible so you can receive proper compensation. 

Most Common Dermatology Billing Codes

Below are some of the most commonly used dermatology CPT codes that dermatology practices utilize.  

Skin Biopsy

During a skin biopsy, a dermatologist removes skin samples from the surface of the body. The cells sampled will be examined to determine information about certain skin conditions or diseases. 

CPT Code 11102

Tangential biopsy of skin; single lesion.

CPT Code 11103

Tangential biopsy of skin; each separate or additional lesion.

CPT Code 11104

Punch biopsy of kin; single lesion.

CPT Code 11105

Punch biopsy of skin; each separate/additional lesion.

CPT Code 11106

Incisional biopsy of skin; single lesion.

CPT Code 11107

Incisional biopsy of skin; each separate/additional lesion.

CPT Code 40490

Biopsy of lip.

CPT Code 69100

Biopsy of external ear.

Lesion Removal

Lesions, whether benign, premalignant, or malignant, may be removed by any method, including electrosurgery, cryosurgery, laser, or chemical treatment.  If multiple lesions are removed, multiple procedure codes may be used.

CPT Code 17000

Destruction of premalignant lesions (eg, actinic keratoses); first lesion.

CPT Code 17003

Destruction of premalignant lesions (eg, actinic keratoses); 2 – 14 lesions.

CPT Code 17110

Destruction of benign lesions other than skin tags or cutaneous vascular proliferative lesions; up to 14 lesions.

dermatologist performing a skin exam on an older patient

Mohs Micrographic Surgery

This surgical technique involves the removal of skin cancer. Mohs surgery is usually conducted in several stages, including the removal of tumor tissue and pathologic examination.

CPT Code 17311

Mohs micrographic technique on head, neck, hands, feet; first stage.

CPT Code 17312

Mohs micrographic technique on head, neck, hands, feet; each additional stage.

CPT Code 17313

Mohs micrographic technique on trunk, arms, and legs; first stage.

CPT Code 17314

Mohs micrographic technique on trunk, arms, and legs; each additional stage.

Excisions of Lesions

These procedures involve the surgical removal of lesions and the surrounding tissue. 

CPT Code 11403

Excision, benign lesion including margins; trunk, arms, or legs.

CPT Code 11603

Excision, malignant lesion including margins; trunk, arms, or legs.

Wound Repairs 

Depending on the severity of the repair, wound closures are classified as simple, intermediate, or complex.

CPT Codes 12031 & 12032

Repair; intermediate; wounds of scalp, axillae, trunk and/or extremities (excluding hands and feet).

CPT Codes 13120 & 13121

Repair; complex; scalp, arm, and/or legs.


Pathology procedures study skin and tissue at the microscopic cellular level using advanced laboratory tests and equipment. 

CPT Code 88305

Level IV – surgical pathology, gross & microscopic exam.

CPT Code 88304

Level III – surgical pathology, gross & microscopic exam.

CPT Code 88312

Special stain including interpretation and report.

CPT Code 88341

Immunohistochemistry or immunocytochemistry.

Laser Therapy Treatments

Laser therapy utilizes different laser wavelengths to treat a variety of skin conditions and cosmetic purposes. 

CPT Codes 96920 & 96921

Laser treatment for inflammatory skin disease.

Phototherapy Treatments

Phototherapy treatments use UV light to treat skin conditions such as eczema and psoriasis. 

CPT Code 96900

Actinotherapy (UV light).

CPT Code 96910

Photochemotherapy; tar and ultraviolet B or petrolatum and ultraviolet B.

CPT Code 96567

Photodynamic therapy by external application of light to destroy premalignant and/or malignant lesions.

CPT Code J7308

Aminolevulinic acid HCL for topical administration.

Evaluation and Management 

Evaluation and management dermatology CPT codes are divided into broad categories such as office visits, hospital visits, and consultations. 

CPT Code 99203

Office or other outpatient visit for evaluation and management of new patient, detailed.

CPT Code 99213

Office or other outpatient visit for evaluation and management of an established patient for 15 minutes.

CPT Code 99214

Office or other outpatient visit for evaluation and management of an established patient, detailed.

Top Tips to Improve Medical Billing in Your Dermatology Practice

woman doing medical billing for a dermatology practice

Proper medical billing and coding for dermatology practices can be challenging, but it doesn’t need to be! Follow these best practices to experience the most streamlined billing process for your practice. 

Maintain Your Clean Claim Rate Above 95%

Your medical practice’s clean claim ratio is the average number of claims paid on the first submission. While every dermatologist would love to reach a percentage above 95%, it’s the meaning behind the number that really matters. Anything lower than a 95% clean claims ratio means your medical practice is losing revenue and increasing expenses with the time, money, and energy it costs to edit and resubmit any rejected claims. The higher your clean claim rate, the less valuable time your personnel will spend trying to rework claims and the more time they will have with patients. 

Submit Accurate Claims

Properly filling out claims and avoiding common errors, such as incorrect patient or insurance information and duplicate claims, can avoid the wasted effort involved in editing and resubmitting incorrect claims. When up to 80% of medical bills are estimated to contain errors that cause weeks of editing and resubmission, likely, your billing will not be efficient as it should be without a second pair of eyes reviewing your bills. 

Keep Up With Modifier Changes

The use of modifiers in dermatology billing commonly trips up the billing process. To avoid any claim delays or denials, it’s important for your dermatology practice to understand how to use them and to keep up with any changes to modifier rules, as the regulations are always shifting. Here are some of the more common dermatology modifiers to watch and when to use them.  

Modifier 25

This modifier should only be used along with E/M CPT codes for patients who are already established with the practice. Don’t use it with new patients or along with other dermatology CPT codes.

Modifier 59

The 59 modifier is attached to other dermatology CPT codes to indicate a service or procedure was distinct or separate from others performed on the same day. The recently added Medicare X-modifiers can be used in place of the “59” modifier.

The X-modifiers include:

  • XE – A distinct service provided in a separate encounter
  • XU – A service that’s distinct because it doesn’t usually overlap the main service or it’s unusual
  • XS – A distinct service performed on a separate structure or organ
  • XP – A distinct service that’s performed by another provider

Outsource Your Medical Billing

With recent billing changes and strident compliance standards to uphold, dermatology practices can gain a lot of time and energy (as well as peace of mind!) when trusting an outsourced third-party to manage their medical billing. For dermatology practices to realize their true revenue potential, a responsible and achievable plan for financial health must be prioritized. By outsourcing medical billing, your practice can have the most efficient and accurate bill processing possible.  

Streamline Medical Billing in Your Dermatology Practice With NCG Medical

When considering outsourcing medical billing, you have to make sure that it is the right decision for your dermatology practice. Part of that decision involves trusting an experienced third-party to hold the responsibility of your medical billing. An outsourced medical billing firm can typically maintain better consistency and control of a dermatology practice’s finances since the internal team must balance the rest of the operations of the practice.  

At NCG Medical, we’ve spent the past 40 years tailoring our medical billing services to meet the needs of many different specialties, including medical billing, revenue cycle management, credentialing, and more. Our dermatology insurance billing services can give you the medical billing expertise your practice needs to grow and thrive in today’s modern medical landscape. Contact us today!

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