A Mohs note usually records only the stages of a surgery and doesnโt include the block counts. A biologic claim is processed by the health plan rather than the patientโs medical group, which results in a balance on the account receivable. Balances like these happen frequently and can cause excessive work for your staff to track down who actually owns the balance.
California dermatology billing services need to be able to solve exceptions like these. Compare coding and dermatology billing support, California payer workflows, A/R ownership and prices for dermatology practices, Mohs surgery and aesthetic services.
California payer rules begin with the member’s plan
Different payer rules can affect the same patient. The payer name can be a starting point, but several other factors can affect where a claim is submitted. Your staff needs a central location to document payer work to verify eligibility, claims routing, and authorizations and to manage disputes.
Medi-Cal Fee-For-Service and Managed Care
Californiaโs Department of Health Care Services (DHCS) publishes information on Medi-Cal fee-for-service billing and coverage. The DHCS manages both the FFS and Managed Care programs, but the contracts vary by county. In Managed Care, staff must verify the memberโs plan and the assigned medical group and determine which entity manages the referral and authorization process, as these functions can be split between the plan and the delegated group.
If a patientโs L.A. Care coverage is confirmed, the Billing team needs to verify if the claim routes to the plan or the assigned group under their arrangement. Identify the responsible entity, payer ID and approval reference in the practice management system. Follow DHCS instructions for fee-for-service, including the submission of Treatment Authorization Request forms, if applicable.
Covered California and commercial networks
Covered California is Californiaโs health insurance marketplace. Participating insurers, such as Anthem Blue Cross, Blue Shield of California and Health Net, offer various products and networks. The insurer or its designated payer handles claims. Confirm your participation for the memberโs exact product, rendering clinician and location.
For a group with offices in Fresno and Bakersfield, keep participation records for each billing entity, clinician, site and product. If a payer approves a clinician, but only one site is listed, or the group affiliation is not shown, have Credentialing confirm the omission. A claim rejection queue is an expensive way to identify a roster problem.
Original Medicare and Medicare Advantage
The Noridian Jurisdiction E Part B materials deal with Original Medicare claims in Northern and Southern California, along with relevant local coverage determination and billing articles. These materials are quite handy in the case of review of Mohs documentation, biopsy codes, and pathology billing service. There might be differences in referral, authorization, network, and claims submission procedures for Medicare Advantage, so please check each individual plan for directions on how to bill.
California payment disputes and privacy
For plans under the jurisdiction of the California Department of Managed Health Care (DMHC), follow the Provider Dispute Resolution process of the responsible payer for an eligible payment dispute and retain the remittance, submission proof and determination. DMHC review depends on jurisdiction and eligibility. California also restricts out-of-network charges for nonemergency services at contracted facilities.
A vendor that is handling your protected health information needs to have appropriate HIPAA safeguards and a business associate agreement (BAA) to be your business associate. Californiaโs Confidentiality of Medical Information Act also applies, if appropriate. Ask the team how they limit employee access to and control activities on patient information. Also, find out how the team manages subcontractors that handle patient information.
Dermatology Coding Checks that Change a Claim
There is a need for your billing team to show how it transitions from the clinical note to a specific code, diagnosis, and payer edit. Use CPT and HCPCS instructions for code selection, NCCI edits and payer policy for coverage. Test your choices with a de-identified chart sample.
Office Visits and Modifier 25
An established-patient office visit, e.g., CPT codes 99213 or 99214, may be assigned modifier 25, if in the same visit the clinician also performs a significant, separately identifiable evaluation and management (E/M) service and a procedure. The documentation must support the level selected and the E/M service code indicates work beyond the usual procedures and includes care provided. In Original Medicare, if a record supports a diagnosis for both the E/M service and procedure, the two services may share a diagnosis.
An office visit may include a biopsy along with an E/M for the evaluation of a patient with poorly controlled psoriasis, and a change in the treatment plan. The E/M service for the psoriasis evaluation may be justifiable, and if the payer allows it, the E/M may be coded and paid separately. The documentation for the E/M must be adequate to justify the level of service and the treatment plan change. If the record only describes the assessment of the lesion for the biopsy and there is no other significant medical decision making, code only the biopsy (non-MUE).
Modifier 59 and Special Procedures
For a procedure pair that has a Medicare NCCI edit, check if the edit allows for a modifier, and if the documentation supports a distinct service. Use modifier 59 only when appropriate, and a more specific modifier is not available to describe the situation. Some payers accept modifier XS for a separate structure.
For example, a clinician performs cryotherapy on an actinic keratosis on the left temple and performs a punch biopsy on a different lesion on the forearm. The documentation should specify both lesions and the site and diagnosis for each service. Check the code pair. The payer may determine that a modifier is accepted. Work of varying degrees of integrality is left bundled.
Biopsies, Destruction, and Excisions
Biopsies: For the CPT codes 11102-11107, a description of the method and location is required for each lesion biopsied, and application of primary and add-on instructions is based on the mix of techniques and overall method of biopsy. A tangential biopsy may be documented in the record as a shave biopsy, and vice versa, particularly in an abbreviated description of the procedure. It is important to clarify the true nature and intent of the procedure if this is not clear in the record.
Destruction: Actinic Keratoses can be destroyed by CPT 17000, with CPT 17003 representing an add-on code for up to 14 lesions. CPT 17004 is for the destruction of 15 or more lesions, and is reported for the total number destroyed. Link ICD-10-CM L57.0 if supported. benign and malignant lesion destruction is to be coded according to the appropriate family, and the payersโ coverage policies are to be reviewed.
Excisions: The code depends on the anatomic site, the type of lesion and the diameter of the excised tissue. Capture the clinical diameter of the lesion, plus the narrowest margin needed for removal, as measured on the patient. If pathology is required to support the code, capture that charge in a tracked queue. Appoint someone to reconcile the report and check the payerโs requirements.
Mohs and Dermatopathology
The codes 17311-17315, based on anatomic site, stages and tissue blocks, reflect the family of codes for Mohs micrographic surgery. In Mohs, the same physician plays the role of the surgeon and the pathologist. Reconcile the operative report with the tissue map and block count per stage, including justification for any additional block charge. Evaluate repair report against documentation and rules.
The components of Mohs surgery and related pathology remain bundled. Other pathology services require independent justification and review, based on CPT, NCCI and the payerโs policies. In the case of independent dermatopathology, verify who performed the technical service and who interpreted the slides. Review the lab arrangement and payer policies for global services, and TC and modifier 26 reporting.
Phototherapy, Biologics and Prior Authorization
Codes for phototherapy rely on the treatment delivered. CPT 96910 describes a photochemotherapy regimen of UVB with a topical agent. CPT 96912 describes PUVA. CPT 96913 describes intensive, directly supervised photochemotherapy for severe photoresponsive dermatoses. Document the modality and regimen; verify the requirements and check coverage for the indications.
For office-administered biologics, ensure the authorization matches the drug, diagnosis, approved units, ordering or rendering provider, and site as required by the plan. Determine whether the product flows through the medical benefit or specialty pharmacy. Reconcile the dose with the HCPCS billing units and administration record.
As per the Single-Dose Container Policy of CMS, Medicare Part B drugs discarded units are applicable. JW reports the applicable discarded units. JZ reports the discarded units as zero. Review the codeโs billing unit and payerโs instructions for the drug and setting.
A pharmacy-benefit approval and a practiceโs buy-and-bill order can end up in the same chart. Designate someone to confirm the procurement route, and whether the practice is able to bill the drug with the approval on file. The same is true for procedure authorizations. Match the approved service and site to the actual claim.
Medical and Cosmetic charges require different workflows
A patient comes in for a biopsy of a suspicious lesion and requests the cosmetic removal of an unrelated lesion. The clinician documents the reason for each service and site of each lesion. The front desk team explains the elective charge to the patient, including the expected financial responsibility of the patientโs insurance. The billing team appropriately assigns the charges to the payer or patient account.
The financial responsibility and acknowledgement of the elective service, and the receipt should be routed together. The biopsy should be documented and routed separately, along with the potential diagnosis and coverage. For uninsured or self-pay patients, account for the federal requirements for a good faith estimate. If the coverage or patient liability is not clear, confirm the payerโs rules and contractual restrictions.
The Centers for Medicare and Medicaid Services (CMS) require an Advance Beneficiary Notice of Noncoverage (ABN) for certain services where payment is expected to be denied. ABNs can be voluntary and explain financial responsibility to the beneficiary for a service, for example, if the service is deemed to be purely cosmetic. Medicare Advantage determines coverage through a different process. Medi-Cal restricts its members to only covering medically necessary services. Confirm any financial responsibility with the program or plan.
California Dermatology Clinics Need These Services
Dermatology billing services in California cover charge entry and coding for a skin practice, deny and appeal claims, post payments and receivables, and other revenue cycle management (RCM) activities. A service agreement should clarify which activities remain with the skin practice and what activities are outsourced to the billing service.
Responsibilities to put in writing
- Eligibility and authorization. Assign a person to verify benefits, confirm responsible payers, and obtain approvals that donโt correspond to the procedure, drug, or site.
- Charge entry and reconciliation. Reconcile schedules with signed notes and surgical logs and confirm the charge description records (CDR) match the procedure performed. Assign an owner to held and missing charges.
- Coding review and claim submission. Confirm that procedures, diagnoses, modifiers, and units were reported appropriately. Track clearinghouse and payer acknowledgements and place unresolved issues on a correction queue.
- Payment posting and patient billing. Post the ERA, reconcile payments and adjustments, investigate credit balances, and issue statements for patient balances. Establish a policy for the approval of write-offs.
- Denials and A/R follow-up. Document each reason for a claim stall, assign a corrective action, or initiate an appeal, inquire of the payer, or follow-up on the patient. Track the filing and dispute limits of each item.
- Credentialing and Enrollment. Indicate the employee responsible for payer follow-up and/or corrections for roster updates. Confirm the group, clinician, location, product, and participation status for each payer.
- Reporting. Give claim status, denial reasons, A/R aging, and payment variation to practice leaders. A report should identify who owns each exception and what action remains to be taken.
Employees involved in claims and billing are permitted access to the information necessary to accomplish their assigned responsibilities.
Choose the Ideal Billing Scope for Your Medical Facility
Discuss your procedure mix and what type of activities your staff want to retain. Let HMS USA help you identify the staff responsible for coding, denials, and open A/R.
In-house billing, outsourcing and shared responsibilities
A well-staffed in-house team can work closely with clinicians, review records quickly and answer patient questions with the right context. Outsourcing can give a small practice access to specialty coders and payer follow-up capacity it would be hard to staff on its own. A shared model can suit practices that want to keep chart review or patient calls internal.
| Model | What you gain | What you have to manage |
|---|---|---|
| In-house | Direct control over systems, coding queries and patient communication. | Recruiting and backfill, coding audits, payer education, software and queues that build up when staff are stretched. |
| Full outsourcing | A contracted team for claim submission, follow-up and reporting, with broader coverage if included in scope. | Vendor oversight, escalation routes, access to claim data and any front-desk or clinical tasks your team retains. |
| Shared model | The ability to keep work your staff handles well and delegate a specific gap, such as denials or payment review. | Clear queue boundaries, shared access where appropriate, and a handoff process for claims that need input from both teams. |
For a California practice with expensive local recruiting, payroll and office overhead, compare the fully loaded cost of the internal team. Include employer contributions, benefits, training, backfill and billing tools. On the vendor side, include the work that stays with your employees. For example, if your nurses still manage biologic authorizations, the outsourcing quote covers only part of that workload.
A Mohs group with a strong coder may need help with underpayments or aging claims. A solo dermatologist may prefer a broader agreement that includes posting and patient statements. The cost comparison changes with the scope.
Pricing models for dermatology billing
The price depends on the claim volume, procedures, payer mix, condition of your A/R and work the vendor agrees to handle. Ask each bidder to price the same scope using the same collection and volume assumptions.
| Pricing model | How the fee works | Terms to check |
|---|---|---|
| Percentage of collections | The contracted rate applies to defined eligible receipts. | Which insurance and patient payments count, whether refunds and recoupments reduce the fee base, and how drug receipts and older balances are treated. |
| Flat fee | A fixed charge covers an agreed scope and volume, sometimes by provider or location. | Claim caps, overage charges, covered sites and separate fees for credentialing, appeals or patient support. |
| Hybrid | A base fee covers specified work and a variable fee applies to a defined category, such as eligible collections or recovery work. | Whether minimums, recovery fees and add-ons overlap. Ask the bidder to show how the invoice is calculated from sample figures. |
An aesthetic clinic that collects its own cosmetic payments should confirm how those receipts affect the vendor’s fee. A buy-and-bill practice should also check whether drug reimbursement enters the same fee base as professional fees. High drug receipts can change the total fee substantially even if claim volume stays the same.
For equally scoped quotes with no extra charges, divide the flat fee by the percentage expressed as a decimal. The result is the eligible collections amount at which the two fees match. If the flat quote excludes authorizations or legacy A/R, price those separately and compare again.
Ask for an itemized proposal that covers setup, clearinghouse and statement charges, credentialing, patient calls, aged A/R and data exports. Have your compliance lead review the fee arrangement and any restrictions in your payer contracts. The contract should spell out which receipts generate fees and how to reconcile them against your ledger.
Set a baseline for collections and claim performance
A vendorโs clean claim percentage is difficult to interpret without a benchmark. A claim can pass a clearinghouse edit and still deny at the payer. Ask your team to capture claim acceptance and payer payment as separate metrics. Similar claims groups by payer, location and service line are preferable for comparison.
- First-pass acceptance. Track the proportion of submitted claims that are accepted the first time they are presented for adjudication. Indicate whether the source of the acceptance is a clearinghouse or payer acknowledgment.
- Initial denial rate. Use adjudicated claims as the denominator for a claim-level measure. Track denial dollars to help focus on an expensive drug denial for example.
- A/R aging and held charges. Review the balance of outstanding receivables by age, payer and owner. Track unbilled charges for pathology, incomplete authorization and other exceptions, separately.
- Net collection rate. Compare payments, net of refunds and recoupments, to the collectible amount for the same group of claims. Agree on how contractual allowances and approved write-offs are reported.
- Underpayments. Compare the amount remitted to the amount allowed, contracted or billed by the payer. Separate payer shortfalls from patientโs deductibles, coinsurance and other responsibility.
If a report indicates an increase in authorization denials, request cause by drug, site and payer. An approval issued for the wrong site requires a different type of correction from an approval missing from the billing record. Expect the vendor to identify the owner of each exception and fully document the resolution. Use your baseline to judge the trend.
You can audit the dermatology billing partner of your choice
During the sales process, the best indicator of what a vendor will do is to take a โbehind-the-scenesโ look at the actual work. Create de-identified scenarios and provide them to each bidder. Request the bidder provide you with its rationale for coding, payer analysis, and follow-up plans. A good bidder will be able to explain what items require a physicianโs clarification and what items do not.
Vendor evaluation checklist
- Review case credentials and case mix. Verify the credentials of the coders assigned to your work. Request examples from medical dermatology, Mohs surgery, and a case mix of a combined medical and cosmetic practice like yours.
- Test a payer scenario. Have the vendor explain how it manages a delegated Medi-Cal claim, how it would determine if a provider is participating in a Covered California product, and how it manages coverage for Essential Health Benefits.
- Review sample worklists. Look for what the next action will be. Verify the practice can export the data.
- Verify privacy and access controls. Review the BAA, user access, audit logs, and incident reporting. Ask who has access to patient data and how access is removed.
- Define patient support. Explain what the scope of work will be if the vendor collects patient balances, corrects a posting error, issues a refund, or follows up on a disputed account.
- Read the exit terms. Explain what the scope of work will be if the contract is terminated. Keep control of system credentials and access to remittances.
Red flags in a billing proposal
Consider the following to be red flags: Guaranteed collections, the automatic modifier, and clean claim rates, especially if there is no explanation. Other red flags include an undefined fee base, open A/R quoted as full-service, an unexplained write off policy, and a vendor that restricts your access to your claim data.
Protect open claims during a vendor change
Take an inventory of submitted claims, clearinghouse edits and rejections, pending appeals, pathology holds, patient credits and refunds due. Designate a single owner for each claim. Keep the original claim and remittance advice and proof of submission so the claim can be easily identified for the next submission by the new staff.
A reconciliation of payer connectivity and remittance connectivity, as well as the work queues should be verified with the new staff. Legacy A/R fees and ownership should also be granted in the agreement. A signed handoff inventory of claims gives your practice a way to reconcile unresolved claims against the work the vendor agreed to take.
Get a Dermatology Billing Proposal for Comparison
Share your payer mix, procedure mix, and A/R concerns with HMS USA. Utilize those to talk about a scope of work and fee structure for your practice.
FAQs
What do dermatology billing services include?
Dermatology billing services typically cover charge entry, procedure and diagnosis coding review, claims, payment posting, denials, accounts receivable and patient statements. A broader scope can include eligibility checks, prior authorization, payer enrollment and reporting. The agreement should identify who resolves missing information and who approves write-offs.
How much does outsourced dermatology billing cost in California?
The cost depends on claim volume, procedure mix, payer mix and scope. Vendors may charge a percentage of eligible collections, a fixed fee or a combination. To compare quotes, use the same collections base and include any charges for authorizations, credentialing, older accounts and software.
Do California dermatology practices need a local billing company?
A remote billing company can serve a California practice. Check whether the team can verify your Medi-Cal plans, identify delegated medical groups and manage your commercial networks. Ask who handles patient calls, who can access records and how the vendor documents follow-up when a claim needs attention.
Can you bill an office visit with a skin biopsy?
Yes, when the same clinician performs a significant, separately identifiable E/M service beyond the work normally included in the biopsy and the record supports both services. Apply modifier 25 to the supported E/M line. An evaluation limited to the usual procedural work is included in the biopsy.
Can insurance and self-pay services share one visit?
Yes. A clinic can collect for an elective cosmetic service and submit a claim for separately documented medical care that meets the payer’s requirements. Assign each charge to the appropriate account and use the applicable notices. Check payer and program rules to establish patient liability for each service.
Will a new billing company work existing accounts receivable?
It depends on the agreement. Some vendors include open accounts receivable in the base fee, and others price that work separately. Define which claims transfer, how collections on those accounts are billed, who handles pending appeals, and how the clinic will see the disposition of each account.
Make the decision about the scope
Select the scope of work model that would cover those functions that require help in your practice. Ensure that the coding, payer exceptions, and balances are put down in black and white. HMS USA has billing, coding, credentialing, denial management, and accounts receivable services. The appropriate scope would depend upon the procedures and payers that you bill.
