What to know about coding dermatology encounters after the Public Health Emergency (PHE) and beyond

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, January 1, 2025

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

Editor’s Note: The online version of this article was updated on Jan. 14, 2025, to reflect the extension of some telehealth coverage through March 31, 2025. The Public Health Emergency (PHE), declared in response to the COVID-19 pandemic, brought significant changes to health care, including dermatology, particularly in coding and billing practices. These adjustments ensured continuity of care during the crisis. However, as the PHE concludes and many flexibilities end, dermatologists and non-physician clinicians (NPCs) must understand both the permanent and temporary shifts that will impact coding compliance in 2025 and beyond. As patient care continues to be provided as a hybrid care model where patients can alternate between in-person and teledermatology encounters, dermatologists/NPCs face unique challenges in determining which codes and modifiers to report that accurately reflect the type of care provided.

It is important that the clinical documentation clearly distinguishes between teledermatology and in-person encounters. While the use of teledermatology efficiently delivers care that does not require in-person visits, face-to-face encounters are necessary for the delivery of care like skin examinations, biopsies, and/or excisions/destructions, which cannot be performed remotely.

Thus, the evaluation and management (E/M) coding guidelines for in-person office encounters remain largely unchanged from the 2021 updates that prioritize medical decision making (MDM) or total time spent over history and physical exam components.

This article offers a comprehensive overview of key changes affecting dermatology coding, covering teledermatology post-PHE, and in-office visits to ensure accurate claim reporting.

Adapting to post-PHE dermatology coding: What stays and what changes?

One of the biggest changes during the PHE was the expanded use of telehealth. Teledermatology became essential for managing patient care, particularly for follow-up visits, chronic condition management (like acne, eczema, and psoriasis), as well as initial consultations, in some cases.

After the end of the PHE, many telehealth flexibilities were extended through Dec. 31, 2024. Although some were temporary, a few have been made permanent. To ensure coding preparedness in dermatology, it is important to understand which PHE flexibilities will end or continue in 2025 as announced in the Medicare physician fee schedule final rule.

CMS extends flexibilities

The final rule includes extended flexibilities by CMS following revised regulation § 410.78(a)(3) to allow continued coverage of audio-only services under certain circumstances for CY 2025. Coverage for audio-only encounters was set to expire on Dec. 31, 2024.

Specifically, CMS finalized several telehealth-related policies effective Jan. 1, 2025, including:

Audio-only telehealth services

CMS clarified that an interactive telecommunications system — when used to provide Medicare telehealth services to beneficiaries in their homes — may include two-way, real-time, audio-only communication technology on a permanent basis.

Audio-only services will be covered when, based on clinical judgment, the service is furnished to established patients in their homes for purposes of diagnosis, evaluation, or treatment of a mental health disorder (including substance use disorders) if the distant site clinician is technically capable of using an interactive telecommunications system, but the patient is not capable of or does not consent to, the use of video technology.

Virtual encounter rendering service address

During the PHE, dermatologists were allowed to report teledermatology services from their currently enrolled location instead of their home address when providing telehealth services from their home. This flexibility was slated to expire on Dec. 31, 2024.

In the CY 2025 MPFS FR, CMS finalized that it would continue to permit dermatologists/NPCs to use their currently enrolled practice location instead of their home address when providing telehealth services from their home for billing purposes.

Virtual direct supervision

CMS has permanently adopted a definition of direct supervision that allows dermatologists and NPCs to oversee auxiliary personnel virtually using real-time audio and video telecommunications for services furnished ‘incident to’ a dermatologist’s or NPC’s professional services. This applies to services with a PC/TC indicator of ‘5,’ including phototherapy codes (96900-96912), CPT^® code 99211, and other office or outpatient E/M visits for established patients who do not require the physical presence of the supervising clinician. The flexibility of direct supervision was extended and slated to expire on Dec. 31, 2024.

However, given the importance of certain services being furnished under direct supervision in ensuring quality of care and patient safety, and in particular the ability of the supervising dermatologists to intervene if complications arise, or where unexpected or adverse events may arise for procedures that may be riskier or more intense, CMS extended this flexibility for direct supervision temporarily to allow direct supervision through real-time audio and visual interactive telecommunications through Dec. 31, 2025.

Temporary virtual supervision for other ‘incident to’ services

In CMS regulation § 410.32(b)(3), CMS defines supervision as “General Supervision, Direct Supervision, and Personal Supervision.”

Notwithstanding the temporary measures implemented in response to the PHE, direct supervision requires the dermatologist (or other supervising practitioner) to be present in the office suite and immediately available to furnish assistance and direction throughout the performance of a service. It does not mean that the dermatologist (or other supervising practitioner) must be present in the room (immediately available [in-person, physical, not virtual, availability]) when the service is performed.

During the PHE, CMS amended the definition of “direct supervision” (85 FR 19245 through 19246) at § 410.32(b)(3)(ii) to state that the necessary presence of the dermatologist (or other practitioner) for direct supervision can include a virtual presence using two-way, real-time, audio/video communications technology for diagnostic tests, and incident to services and still meet the “immediately available” criteria.

Therefore, CMS will allow dermatologists or NPCs to provide supervision via real-time audio and video telecommunications technology for all other ‘incident to’ services requiring direct supervision through Dec. 31, 2025.

Virtual presence for teaching physicians

Teaching physicians may maintain a virtual presence during the key portion of services involving residents in all teaching settings for billing purposes. This applies only to clinical situations where the service is provided virtually (e.g., a three-way telehealth visit involving the patient, resident, and teaching physician at separate locations) and is allowed through Dec. 31, 2025.

Other teledermatology updates include:

New E/M codes for services performed via teledermatology

During the PHE, dermatologists were able to use teledermatology for follow-up encounters and chronic care management and report these encounters with standard E/M codes (99202-99205 and 99211-99215). For example, ongoing care for conditions like acne or psoriasis could be effectively managed via teledermatology when no in-person examination was required.

However, effective Jan. 1, 2025, E/M service codes 99202-99205 and 99211-99215 will no longer be used to report services conducted via teledermatology. Services that are performed via telephone calls will also be impacted as the AMA CPT has deleted the telephone codes 99441 – 99443. To mitigate this issue, the AMA CPT Editorial Panel has introduced 17 new telemedicine codes (98000-98016) specifically for reporting synchronous, online, and other non-face-to-face E/M services. These codes address both audio-video and audio-only encounters.

• CPT code 98000 – 98007 can be used to report synchronous (real-time) audio-video encounters.

• CPT codes 98008 – 98015 can be used to report synchronous audio-only encounters for both new and established patients.

• CPT code 98016 covers brief communication technology-based services (virtual check-ins) for established patients, lasting 5-10 minutes.

• CPT code 98016 can be reported in lieu of G2012 when the service is provided to Medicare beneficiaries.

The virtual check-in must be patient-initiated and intended to evaluate whether a more extensive visit is required (e.g., an office or other outpatient E/M service [99212, 99213, 99214, 99215]). The virtual check-in encounter does not require video technology. If the patient-initiated check-in leads to an E/M service on the same date of service, and when time is used to select the level of that E/M service, the time from CPT code 98016 is not reported but the work performed may be added to the time of the face-to-face E/M encounter performed on the same date of service.

Audio-only (telephone) codes 98008-98015 are reported when the service exceeds 10 minutes of medical discussion between the dermatologist/NPC and the patient.

These CPT codes are not reportable when the service is rendered to a Medicare beneficiary.

Check directly with your private payer(s) for specific coding and reporting guidance.

A detailed description and utilization guidance of the new telemedicine codes can be reviewed in 2025 Coding & Billing for Dermatology.

Online digital E/M services

Encounters provided using asynchronous technology (e.g., not live or real-time, via an electronic health record (EHR) portal, email, or text), can be reported using online digital E/M service codes (99421, 99422, 99423). These services must be patient-initiated and involve a clinical evaluation, assessment, and management. These codes cannot be reported for non-evaluative electronic communication of test results, scheduling of appointments, or other communication that does not include an E/M. If a face-to-face or synchronous E/M service is provided within seven days of the online encounter, the digital E/M cannot be separately reported.

The coding guidelines state that if a face-to-face (99202-99215) or a synchronous audio-video (98000-98007) E/M service is provided to the same patient by the same clinician within seven days of an online digital (99421-99423) E/M service, the work devoted to the online digital E/M service is incorporated into the separately reported E/M visit ([99202-99215] [98000-98007]).

Reporting Medicare synchronous O/O E/M encounters (99202 – 99215): Jan. 1, 2025 – March 31, 2025

Medicare has announced that it will continue to cover audio-video and, under specific conditions, audio-only telemedicine E/M services. This includes reimbursing for teledermatology encounters rendered to Medicare beneficiaries when reported using the standard office/outpatient E/M code set (99202 – 99215). These services, delivered via synchronous (real-time) two-way communication technology, will remain covered through March 31, 2025.

As the health care landscape evolves, understanding Medicare’s telehealth policies is crucial for dermatology coding in 2025. The extension of telehealth flexibilities and the classification of telemedicine evaluation and management (E/M) codes play a significant role in how dermatology practices will bill for teledermatology services.

Coding and payment policies for CPT codes 98000 – 98015 versus 99202 – 99215

CMS has maintained that they will not assign relative value units (RVUs) nor recognize telehealth code 98000-98015 for reimbursement. As such, CMS has designated a Procedure Status Indicator (PSI) of "I" for CPT codes 98000–98015, indicating that these codes are not reimbursable by Medicare and cannot be used for teledermatology services provided to Medicare beneficiaries. However, these codes may be billable to private payers, depending on each payer's specific payment policies and guidelines. Practices should verify coverage with individual payers before reporting these codes.

Teledermatology encounters rendered to Medicare beneficiaries will continue to be reported with the office/outpatient E/M CPT codes 99202 – 99215. These encounters should be reported with the correct Place of Service (POS) code and, when applicable, an appropriate modifier follows:

Reimbursement for teledermatology encounters provided to Medicare beneficiaries located in their homes is paid at the non-facility MPFS rate. CMS cites statutory obligations to ensure telehealth payments match in-person rates regardless of service delivery modality.

Dermatology practices must continue using existing office/outpatient E/M codes (99202–99215) for telehealth billing, with the appropriate POS codes and modifiers, where appropriate. CMS also plans to issue additional educational materials to guide proper billing practices for Medicare teledermatology services. Understanding these coding and policy changes will be critical for dermatology practices to maintain compliance and optimize reimbursement for telehealth services.

Stay tuned for more updates on teledermatology coding news for Medicare beneficiaries after March 31, 2025.

Teledermatology: Advancing equity and efficiency in modern health care

Teledermatology continues to play a major role in health care delivery even after the PHE, thereby highlighting the importance of accurate documentation and coding of the hybrid care landscape. This in turn has shined a light on payer documentation review to ensure appropriate use of CPT and diagnosis codes as well as modifiers for accurate claim submission.

While many CMS flexibilities remain in place, private payer policies continue to evolve, with some reverting to pre-pandemic standards. Dermatologists and NPCs must ensure that they are using the correct codes, modifiers, and succinct documentation that support the service provided to avoid claim denials and unintended audits that can impact the practice revenue stream.

As dermatology practices adjust to post-PHE coding requirements, it’s important to stay updated on CMS guidelines and private payer-specific policies. By staying informed of these changes and understanding both CMS guidelines and private payer policies, dermatologists can continue to deliver high-quality equitable care in the post-PHE era. Although CMS guidelines may be broadly applicable, private payers may have different requirements for reporting telehealth and face-to-face services.

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