38 Surviving Financially

John L. Pfenninger, MD, and Rebecca Small, MD

One important way to survive financially is to be paid appropriately for the procedures performed in the office. Coding and billing for skin procedures can be very complex. It is essential for the practitioner to understand the idiosyncrasies of the ICD-9 and CPT codes if billing is to be completed correctly.¹^–⁷ The objective is not to charge as much as possible, but rather, to optimize billing once the proper procedure has been performed. Oftentimes, the same procedure can be billed using three or four different codes. Without exception, one method will pay more. Knowing the proper application of billing rules can, and does, make a significant difference in the financial bottom line of the practice.

Aesthetic procedures are not reimbursed by insurance carriers and, thus, there are no formal “rules” or “regulations” regarding the fees charged. The inclusion of these procedures has the potential to significantly augment practice revenue. Start-up costs for aesthetic procedures vary widely from relatively inexpensive products for chemical peels, to moderately expensive injectable products such as botulinum toxin and dermal fillers, to more expensive equipment such as aesthetic lasers.

Procedures have in the past and currently do reimburse more than cognitive visits on a time comparison basis. The primary care physician frequently turns away the most financially rewarding parts of the practice when sending patients for consultation. Many dermatologic procedures are easily learned, take little time to perform, and are appreciated by the patient since they do not have to arrange for a consult with another physician. These procedures often provide immediate or quick feedback to the clinician and patient about the diagnosis.

Unless a clinician is going to enter into the aesthetic field, the instruments used to perform dermatologic procedures are inexpensive. The most costly would be an electrosurgical unit and a liquid nitrogen gun (see Chapters 14 and 15). On the other hand, aesthetic equipment such as lasers can be very expensive, exceeding $150,000. However, when properly utilized on a frequent basis, lasers will offer the greatest revenue returns compared to other aesthetic procedures that require consumable products, such as botulinum toxin and dermal fillers. Cost versus fee charged for aesthetic laser treatments is more difficult to analyze due to the multiple variables involved such as methodology of acquiring the capital equipment, incidental disposable goods, cost of office space for storing the device, and maintenance contracts ($10,000 per year is common for aesthetic lasers).

A properly designed spreadsheet can be used to estimate whether major investments will provide an adequate financial return. Sales representatives will often paint a rosy picture and provide flow sheets which always conclude that there will be a significant return on investment. Major investments, however, require a careful independent study analysis of main factors.⁸

The purpose of this chapter is to help the reader become familiar with proper CPT coding for biopsies, destructions, and excisions of skin lesions. It will also help identify the pitfalls and common errors in coding and discuss financial considerations for aesthetic procedures. Tables 38-1 and 38-2 list common coding terminology and modifiers.

TABLE 38-1 Coding Terminology

Ablation	See “Destruction”
Balance billing	The process of charging a patient the difference between what the physician bills and what the insurance company pays. If a provider participates with an insurance carrier, only copays and deductibles may be charged to the patient. If there is no participation agreement, then the provider may bill the patient for any fees not paid by the insurance company.
Biopsy	The procedure used to obtain tissue for histologic examination. This can be done with shave, punch, excision, curettement, and incisional procedures.
Electrosurgery/fulgurate/desiccate/cauterize	The use of electrical current heat to treat/destroy an area.
CPT	Current Procedural Terminology, published and updated annually by the AMA. Every medical procedure has a CPT code number. The majority of billing is completed using CPT terminology.²
Cryosurgery	The use of low temperatures to destroy (by freezing) a lesion (liquid nitrogen; nitrous oxide closed system; chemical spray canisters).
Debridement	Removal of devitalized tissue, dirt, and/or eschar from wounds or infected areas.
Destruction	Treatment of a lesion using cryosurgery, chemical application, injection of a chemical, curettement, or electrosurgery. Using a shave technique would also qualify, but in general, reimbursement would be higher using a shave or biopsy code than a destruction code for benign lesions.
Explanation of benefits (EOB)	A sheet provided by insurance companies that is enclosed with the payments for various procedures explaining what is allowed, what is the patient’s responsibility (copay, deductible, not covered), what is not allowed (must be “written off” by the provider), and the amount of the enclosed payment.
Excision	Removal of a lesion using sharp dissection or electrosurgical cutting. In a shave excision, a slicing technique is used to remove either all or a portion of the lesion. It does not require suturing. Elliptical or fusiform excision includes full-thickness (through the dermis) removal of the lesion and requires closure, usually with sutures (or glue or adhesive strips).
Global period	Certain procedures have global periods. During this time, additional services (relating to the original procedure) cannot be charged. For most skin surgical procedures, this period is 10 days (no global period for shaves and punches).
ICD-9 (International Classification of Diseases, 9th Revision)	Every diagnosis has a specific numbered code. A diagnostic code is required to justify the reason for a CPT (procedure) code.¹ The ICD-10 codes are currently scheduled to be implemented October 1, 2013.
Incision and drainage (I&D)	Simple: Contents expressed after incision.
Incision and drainage (I&D)	Complex: Multiple conditions would qualify for a complex I&D, including the removal of a sac, such as in a sebaceous cyst, or insertion of a drain, such as iodoform gauze. The size and depth of the abscess could also be a factor, as well as excessive time required to complete the procedure. If multiple I&Ds of different lesions are done at the same time, it would also be considered “complex.”
J-codes	Nearly every injectable medication has a specific number assigned to it called the J-code. When administered, the physician charges for not only the administration itself (a CPT code), but also for the particular chemical delivered (identified by the J-code).
Modifiers	These are numbers appended to a CPT code while billing to indicate that more than just the usual services were provided for the particular CPT code. (See Table 38-2 for common modifiers).
Paring	Removal and/or decrease in the bulk of a lesion, by peeling or shaving it away using a scalpel or a sharp instrument.

TABLE 38-2 Common Modifiers

-25	Significantly separate E&M on the same day as a procedure.
	Example: If a patient comes in for a mole removal and you have documentation that you also treated the patient for hypertension, osteoporosis, smoking, etc., use the -25 modifier with the office visit code.
-50	Bilateral procedures.
	Example: If you perform sclerotherapy on both legs, you would use the -50 modifier with the sclerotherapy code.
-51	Multiple procedures.
	Example: When multiple procedures, other than E&M, are performed at the same session by the same provider, the primary procedure or service may be reported as listed. The additional procedure(s) or service(s) may be identified by appending modifier -51 to the additional procedure or service code(s). Note: This modifier should not be appended to designated “add-on” codes.
-59	Distinct procedural service.
	Example: If you performed a cyst excision and decided to also freeze some actinic keratoses, use the -59 modifier with the cryosurgery because it is a completely separate procedure from the excision.
-79	Unrelated procedure or service by the same physician during a postop period.
	Example: If a patient comes in to have sutures removed during the postop period, and you perform cryosurgery on some actinic keratoses at the same visit when the sutures are removed, then -79 is used to clarify a separate procedure during a postop period.