Excision of Lesions Miscoding: How Common Errors Lead to Denials and What You Can Do to Fix Them

By: Yvette Crowell, Perspective Partners

In dermatology practices, excision of lesions is a routine procedure, but misbilling of these services is surprisingly common. A significant number of claims for excision of lesions are denied or underpaid due to incorrect coding. According to recent studies, misbilling of excised lesions accounts for up to 20% of claim denials in dermatology practices. This is often due to errors such as incorrect CPT codes, improper documentation, and failure to adhere to payer-specific guidelines. The financial impact of these errors can be significant, causing unnecessary delays and lost revenue for healthcare providers.

The Importance of Correct Coding for Excision of Lesions

The excision of lesions is coded based on a variety of factors, including the type of lesion, the size of the excision, and the location of the lesion. Correct coding is essential for ensuring that the procedure is reimbursed appropriately and that the practice remains compliant with payer policies. However, even minor errors can lead to denials and revenue loss.

CPT codes for excision of lesions include:

• 11600 – Excision of malignant skin lesion, face, ears, eyelids, nose, lips; excised diameter of 0.5 cm or less
• 11601 – Excision of malignant skin lesion, face, ears, eyelids, nose, lips; excised diameter of 0.6 to 1.0 cm
• 11602 – Excision of malignant skin lesion, face, ears, eyelids, nose, lips; excised diameter of 1.1 to 2.0 cm
• 11603 – Excision of malignant skin lesion, face, ears, eyelids, nose, lips; excised diameter of 2.1 to 3.0 cm
• 11604 – Excision of malignant skin lesion, face, ears, eyelids, nose, lips; excised diameter of 3.1 to 4.0 cm
• 11400 – Excision of benign skin lesion, face, ears, eyelids, nose, lips; excised diameter of 0.5 cm or less
• 11401 – Excision of benign skin lesion, face, ears, eyelids, nose, lips; excised diameter of 0.6 to 1.0 cm
  
  

What Can Go Wrong: Common Billing Mistakes

Incorrect billing for excision of lesions often stems from several common mistakes, which include:

1. Incorrect Code Selection:

• Mistake: Choosing the wrong CPT code for the excised lesion type or size. For example, coding for malignant lesions when the excised lesion is benign, or coding for a larger excised diameter when the lesion is smaller.
  
  
• Impact: Using the wrong CPT code can lead to underpayment or denial, as insurance companies may determine the claim does not align with the reported diagnosis.
  
  

2. Improper Documentation of Lesion Size:

• Mistake: Failing to accurately measure the excised lesion and document its size in the patient’s medical records.
• Impact: If the lesion size is not properly documented, the provider may either upcode or downcode the procedure, leading to discrepancies between the actual procedure and what was billed. This can result in underpayment, overpayment, or outright denial of the claim.
  
  

3. Failure to Document Location:

• Mistake: Not specifying the location of the excised lesion, which is particularly important for face and neck lesions.
• Impact: The excision of lesions on the face, ears, or eyelids requires specific codes and may receive higher reimbursement rates due to the complexity of the procedure. If the location is not clearly documented, the insurer may either reject the claim or reimburse at a lower rate.
  
  

4. Coding for a Simple Excision When Complex Excision Was Performed:

• Mistake: Coding for a simple excision when a complex excision was actually performed. Complex excisions involve multiple layers of tissue removal, typically requiring more time, expertise, and resources.
• Impact: This mistake often occurs when the physician fails to document the complexity of the procedure. Billing a simple excision code for a complex excision leads to underpayment.
  
  

5. Not Reporting Modifiers:

• Mistake: Failing to use the appropriate modifier codes, such as modifier 25 for a significant, separately identifiable service performed during the same visit.
• Impact: Without proper modifiers, insurers may deny or reduce the payment for the procedure, as they may interpret it as part of a bundled service.
  
  

The Financial Impact of Mis-Coding

According to a 2023 survey by the American Academy of Dermatology, about 20% of dermatology claims face delays or denials due to incorrect coding of excised lesions. This can result in significant revenue loss. For a busy practice, this could mean thousands of dollars in lost revenue each year due to errors in CPT code selection, improper documentation, or failure to comply with payer requirements.

Incorrect coding also leads to increased administrative costs, as staff spend time appealing denied claims and resubmitting corrected documentation.

How to Fix the Problem: Best Practices for Correct Coding

1. Accurate Measurement and Documentation:

• Always measure the excised lesion accurately and record the size in the patient’s chart. Document location, type, and complexity of the excision (e.g., simple or complex) to support the procedure code.
  
  

2. Use Correct CPT Codes:

• Ensure you select the correct CPT code based on the type of lesion (malignant or benign), size, and location. Utilize online coding resources, tools, or consult with experienced coders to double-check code selections.
  
  

3. Appropriate Modifiers:

• Add appropriate modifiers such as modifier 25 if a separate, significant procedure is performed during the same visit. Make sure that all modifiers are justified by the documentation.
  
  

4. Training for Coders and Providers:

• Provide ongoing coding training for staff, especially those involved in excision procedures. Regularly review coding updates and changes from the American Medical Association (AMA) and payer-specific policies.
  
  

5. Clear Documentation of Procedure Complexity:

• Clearly document whether the excision was simple or complex, as this will directly impact coding and reimbursement. Ensure that details like the number of layers removed or skin grafts used are included.
  
  

6. Pre-Billing Audits:

• Implement pre-billing audits to check for discrepancies in coding before claims are submitted. This will help identify potential errors early, reducing the risk of denials.
  
  

Conclusion: Avoiding Lesion Excision Mis-Coding

Correct coding for excision of lesions is essential to ensure that dermatology practices are properly reimbursed and remain compliant with payer requirements. By focusing on accurate measurement, detailed documentation, and using the correct CPT codes, practices can significantly reduce the likelihood of denied claims and underpayment. Regular staff training, along with pre-billing audits, can help prevent misbilling errors and ensure that excision procedures are coded accurately for maximum reimbursement.

With proper documentation and correct coding, dermatology practices can avoid the costly consequences of misbilling and continue providing high-quality care to their patients.

If you need help with your coding & billing of dermatology services/procedures, Perspective Partners is here to help. Give us a call today or schedule an appointment to start your path to financial reward.