Coding dermatology encounters in 2024

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, March 1, 2024

Academy coding staff address important coding topics each month in DermWorld Coding Consult. Read more Derm Coding Consult articles.

Embracing advanced coding technology and tools

In the rapidly evolving realm of health care, dermatology stands at the forefront of technological advancements in medical record documentation and coding. Electronic health records (EHRs) have become integral to medical record documentation, coding, and billing since their inception. As EHRs continue to evolve to be more streamlined, dermatologists, non-physician clinicians (NPCs), and coding and billing staff are leveraging EHR functionalities for comprehensive documentation. This includes appropriate patient history, visual aids, and treatment plans that result in more accurate code selection.

As we step into 2024, the integration of artificial intelligence (AI) into coding processes is a groundbreaking development, providing tools that enhance accuracy and streamlined coding assistance. AI has made significant strides in health care platforms, and dermatology is no exception. Now more than ever, AI-assisted coding tools have become indispensable, analyzing medical record documentation to identify pertinent information relevant to the selection of associated codes and reduce the risk of coding errors. This technological leap empowers dermatologists, NPCs, and their coding staff to optimize efficiency, resulting in more accurate code selection and improved patient care.

Accurate and comprehensive documentation is essential for proper coding and reimbursement as well as maintaining a high standard of patient care. Therefore, dermatologists and/or NPCs, and their coding and billing staff should familiarize themselves with AI-driven coding solutions to enhance efficiency and accuracy in dermatology coding.

Continuous coding education: A cornerstone for success

In the dynamic coding field of dermatology, staying informed about coding guidelines is paramount. Regular updates from the American Medical Association CPT Editorial Panel (AMA CPT) and Centers for Disease Control and Prevention/National Center for Vital Health Statistics (CDC/NCVHS) necessitate continuous education to adapt to new or revised codes and coding guidelines. As a result, both federal and private payers revise and/or update their coverage and billing policies which may impact dermatology coding and reimbursement for services rendered to dermatologic patients.

Dermatologists and NPCs must actively engage in continuous coding education to remain abreast of the latest changes and best practices. Sign up for health insurance payer listservs and bulletins, and most importantly, participate in Academy dermatology-specific coding education sessions through webinars and conferences to stay updated on the latest coding changes and best practices in dermatology.

Documentation precision using dermatology-specific coding guidelines

Dermatology coding requires a nuanced understanding of specialty-specific guidelines. Adherence to these guidelines is crucial for accurate billing and reimbursement. Dermatologists and NPCs must stay informed about updates to code sets such as ICD-10-CM, CPT, and HCPCS Level II, ensuring that their documentation aligns with the latest coding standards.

Accurate coding begins with comprehensive documentation for services and procedures rendered. Dermatologists and NPCs must ensure thorough documentation capturing essential elements of an encounter, including a pertinent history of the presenting problem, examination findings, and the medical decision-making process. In dermatology, this may involve detailed descriptions of skin lesion(s), their sizes and locations, as well as lesion characteristics that deem them medically necessary to be treated. Other important elements include the method or technique used to treat the presenting problem, and any complications that may arise.

Clear communication between coding staff and clinicians is essential to address any ambiguities in documentation and ensure accurate code assignment. Accurate documentation will result in the appropriate ICD-10-CM and CPT code selection and assignment, leading to correct and timely reimbursement.

Staying informed about dermatology-specific coding updates is crucial for accurate billing and reimbursement. For this reason, dermatologists must ensure that their coding practices align with the latest editions of code sets such as ICD-10-CM, CPT, and HCPCS Level II.

Mastery of ICD-10-CM and CPT coding for dermatology

The International Classification of Diseases, 10th Edition, Clinical Modification (ICD-10-CM) is a system used to capture and report diagnoses in health care. The CDC/NCVHS — who are tasked with managing and updating this rigorous coding system — provide regular updates to ensure that the codes align with the latest medical knowledge and technology.

Selecting the appropriate ICD-10-CM code is vital for accurately representing the patient’s condition and justifying the medical necessity for the service/procedure rendered. Dermatologists and NPCs must familiarize themselves with the latest diagnosis coding updates for dermatology-related codes to ensure coding precision. This includes learning and understanding new codes for emerging conditions, revisions to existing codes, and deletions of outdated codes.

The AMA Current Procedural Terminology (CPT^®) code set is used to describe medical, surgical, and diagnostic services. Dermatologists and NPCs often perform services and/or procedures, sometimes singly as well as a combination of various techniques to complete a treatment. Similarly, staying informed about the latest CPT code updates and guidelines for dermatologic services and procedures is essential for accurate billing and reimbursement. Additionally, understanding bundling and unbundling rules is crucial to avoid coding errors that can lead to claim denials.

As the incorporation of AI continues to grow and evolve in the health industry, dermatologists should pay attention to any new codes introduced for innovative procedures or technologies.

E/M services and evolution of time-based coding

Evaluation and management (E/M) services play a crucial role in dermatology encounters. As time-based coding gains prominence, dermatologists and NPCs must accurately document the level of complexity and time (if reporting claims based on time) spent during patient encounters, ensuring compliance with specific documentation requirements for time-based coding. These requirements ensure that the record reflects the level of service provided during each encounter. This is particularly important for services that involve a vast amount of time coordinating care with other health care professionals, where time spent with the patient is a key factor.

Teledermatology and virtual care

Teledermatology has become a staple application of electronic health visits. While initially utilized as a means of providing dermatologic care to underserved rural areas, teledermatology has quickly grown to become an essential part of dermatology health care delivery as more and more patients request virtual appointments.

The integration of telehealth in dermatology health care delivery is transformative. Dermatologists and NPCs are increasingly providing virtual care necessitating adherence to telehealth-specific coding guidelines. Dermatologists and NPCs may provide virtual inter-professional consultations, review images submitted by patients, and offer other virtual patient care and follow-ups. As such, adherence to telehealth-specific coding guidelines is essential to ensure accurate claim reimbursement. Teledermatology encounters must be documented appropriately and accurately, to include a relevant history, examination findings, and medical decision-making, just as you would for in-person visits.

Reporting teledermatology encounters also involves using a specific place of service code and modifiers to indicate that the service(s) were provided virtually. Although most payers cover and pay for virtual encounters, dermatologists and/or NPCs must familiarize themselves with the rules and regulations governing telehealth coding in 2024, including any updates or changes in reimbursement policies. This includes the appropriate use of telehealth modifiers, such as GT (via interactive audio and video telecommunications systems) or 95 (synchronous telemedicine service rendered via real-time interactive audio and video telecommunications systems), to ensure accurate reimbursement and prevent inadvertent claim denials.

Strategic use of modifiers

Modifiers play a pivotal role in preventing claim bundling and denials. Because dermatologists and NPCs routinely perform multiple services, sometimes in combination with each other, to a patient on the same date of service, they must adhere to coding rules and guidelines by utilizing modifiers effectively.

Modifiers consist of two-digit numeric or alpha-numeric characters that provide a means for dermatologists and NPCs to report or indicate that a service/procedure they performed to a patient was altered by a specific circumstance(s) without changing the code or its definition. Modifiers also allow dermatologists/NPCs to effectively respond to payment policy requirements established by payers and other entities that may be responsible for claim adjudication and reimbursement.

The correct use of modifiers will result in efficient and timely claim adjudication with the appropriate payment. Dermatologists and/or NPCs can append modifiers to appropriately bypass payer edits (under the appropriate circumstances) and/or indicate that the service is being provided during the global period. Understanding payer edits and checking for CMS’ National Correct Coding Initiative (NCCI) edits when reporting multiple procedure/service codes is essential to prevent claim denials.

The path forward

As we navigate the intricacies of dermatology coding in 2024, a combination of up-to-date coding knowledge, meticulous medical record documentation, and adherence to coding rules and guidance is essential. By embracing technologic advancements and staying informed, dermatologists and NPCs can contribute to improved patient care, accurate reimbursement, and valuable data for research and analysis in dermatology. In this dynamic landscape, continuous learning and adaptation are the keys to success.

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