CMS targets procedures and visits

By Carl Johnson, MD, FAAD


This is the first article in a six-part series that will focus on areas where dermatology is vulnerable, and how members can take action to preserve the ability to practice the full scope of dermatology for the benefit of patients. Watch for the Adapt, Commit, Thrive (ACT) logo in the next five issues of Member to Member to keep abreast of the critical issues facing the specialty in light of health system reform implementation.




As we all know, there is strong momentum in Congress, at the Centers for Medicare and Medicaid Services (CMS), and among private payers to control health care spending. CMS continues to use various methods to identify overvalued or misused codes and to reduce payments. One method that is increasingly used by payers is identifying patterns where services are regularly performed and billed together during the same visit, especially evaluation and management (E/M) services that are billed routinely with procedures.

When E/M services are usually performed on the same day as the procedure, CMS and the Relative Value Scale Update Committee (RUC) now remove the time associated with the cognitive portion of the procedure from its value. At the same time, payers are questioning the payment of separate cognitive services on the same day as the procedure. CMS and private insurers are often eliminating payment for either the procedure or the E/M visit, when both are performed on the same day.

Diagnosing and treating multiple issues in one visit is appropriate for dermatologic patient care, and the Academy will work to uphold our right to do so because it is in the best interest of our patients.

Because of the unique nature of dermatology, our patients are often seen for multiple issues at the same appointment. This practice is convenient for our patients because they do not have to schedule additional appointments for each issue. Diagnosing and treating multiple issues in one visit is appropriate for dermatologic patient care, and the Academy will work to uphold our right to do so because it is in the best interest of our patients.

Understanding that it is the Academy’s position that both payers and providers are expected to use correct coding principles, it is incumbent upon every physician to learn to accurately select and apply codes. To this end, the Academy is focused on ensuring that its members are educated about how to code appropriately and accurately — including appropriate use of modifier 25 — and provide sufficient supporting documentation as it relates to procedures and visits.

Mind your modifiers

Modifier 25, which is meant to signify an E/M service performed during the same encounter as a procedure, too often is not recognized and is unjustly denied by insurers. Many payers claim to recognize modifier 25, but the claim edit is often set to pay for either the E/M or the procedure — but not both — on the same day. Practice staff should find out which payers claim to recognize and reimburse for the modifier, and what documentation is required.

Misuse of modifier 59 is another area of concern in our dermatology practices. Simply stated, it tells the payer that two or more procedures were performed at the same visit/encounter on different sites of the body or to different incisions of the same anatomic location. It should never be used strictly to prevent a service from being bundled or to bypass the insurance carrier’s claim edit system. When using modifier 59, documentation substantiating that the services were performed separately should be included in the patient’s medical record.

From the government’s perspective, payments made based on coding errors result in misuse of taxpayer dollars. When that happens, they classify it as fraud and abuse, at which point an audit is initiated by either CMS or a Recovery Audit Contractor (RAC), depending on the audit type. The biggest audits now center on office E/M visits billed with modifier 25. RACs have an incentive to investigate in that they receive a contingency fee for every error they find for which Medicare corrects and recoups funds.

Code with confidence

Streamlining your claims process is crucial to keeping your practice running smoothly and profitably. Fortunately, the AAD offers the following resources to help you code with confidence:

  • Pre-orders are now being accepted for the 2014 Coding and Documentation for Dermatology manual, which includes new and revised AMA CPT procedure codes, ICD-10 codes and implementation information, RAC Audit Toolkit, and much more.
  • The AAD’s expert coding staff regularly provides webinars about the most significant topics in coding and reimbursement.
  • Derm Coding Consult provides practices with reliable and timely information about coding issues.
  • The coding and reimbursement section of AAD.org offers a wealth of resources to help you and your practice staff understand the intricacies of correct coding, ICD-10 transition, RAC audits, and dealing with Medicare, managed care, and self-pay patients.
  • Cracking the Code, a monthly column in Dermatology World addresses important coding and documentation questions.
  • Coding courses are available at the Academy’s Annual and Summer meetings.

AADA advocates for you

In the coming weeks, the AADA will issue a series of action alerts that will detail the activities related to several critical issues facing the specialty. The changing health care environment will have major effects on the dermatology specialty.

Our AADA takes these challenges very seriously and is taking ongoing proactive and aggressive steps to advocate to policymakers to ensure the viability of dermatology and to keep AAD members informed about what they should do to protect their patients and their practices.

Carl Johnson, MD, is chair of the Academy’s Private Sector Advocacy Task Force. He is board-certified in dermatology and pediatrics, and spent 10 years in the U.S. Army and 20 years in dermatology private practice. He is now retired.

Email the Member to Member editor at members@aad.org.

Related resources: