Payer guide · Medicare

Medicare Dermatology Billing: LCDs, MACs, and Coverage Limits

Medicare is the dominant payer in most dermatology practices, and it is the one payer whose coverage rules you can read before you bill. Nearly every recurring Medicare denial in dermatology traces back to a local coverage determination the practice has never opened — most often the benign lesion removal LCD, which sets the specific clinical criteria a note must state before destruction or excision of a non-malignant lesion is payable.

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Coverage is decided by your MAC, not by Medicare nationally

Medicare Administrative Contractors publish their own local coverage determinations and billing articles. Two identical practices in different jurisdictions can face different documentation requirements for the same CPT code, and a practice with locations across a jurisdiction line effectively bills two payers.

Before disputing a Medicare denial, read the LCD and the associated billing and coding article for your jurisdiction. The article, not the LCD, usually carries the diagnosis code list and the documentation wording the reviewer applies.

The benign lesion rules that generate most denials

Removal of a benign lesion is generally not covered for cosmetic reasons. Coverage turns on documented symptoms — bleeding, intense itching, pain, physical evidence of inflammation, or obstruction of a body opening.
The note must state the symptom, not just the diagnosis code. A code list satisfies the edit; only the narrative survives a records request.
Destruction of multiple benign lesions is unit-sensitive. Units billed must match lesion counts documented in the body of the note.
Suspicion of malignancy must be recorded as the reason for removal where that is the indication, and the pathology result does not retroactively change what the note said.

ABNs, and the modifier that goes with them

Where a service is likely to be denied as non-covered, an Advance Beneficiary Notice signed before the service is what makes the patient responsible. Collected afterwards, it is worth nothing.

The ABN has to be paired with the correct liability modifier on the claim, otherwise the denial routes the balance to the practice rather than to the patient. Cosmetic services that are statutorily excluded follow a different track from services that are merely expected to be denied.

Global periods, MPPR, and the quiet write-offs

Minor procedures carry 0 or 10 day global periods; the same-day evaluation is only separately payable when it is separately identifiable.
Multiple procedure payment reduction applies when several procedures occur in one session. Expecting full allowance on every line and writing off the difference as a contractual hides a genuine underpayment when the reduction is applied incorrectly.
Post-operative visits inside a global period are reported but not separately paid, and a practice that stops reporting them loses the record it needs when the global is questioned.

Frequently asked questions

Why did Medicare deny a lesion destruction as not medically necessary?

Almost always because the note recorded a diagnosis but not the covered symptom the LCD requires. The fix is the note template, not the appeal.

Does the MAC jurisdiction change how we code?

It does not change CPT selection, but it can change the diagnosis codes accepted and the documentation wording expected, which changes whether the claim is paid.

Can we bill the patient for a Medicare denial?

Only where the service is statutorily excluded, or where a valid ABN was signed before the service and the corresponding modifier was reported on the claim.