Coding

Covering benign skin lesions

Make sure your documentation can stand up to scrutiny.

BY PAUL M. LARSON, MBA, MMSC, COMT, COE, CPC, CPMA

I am often asked whether benign skin lesion removals are a covered service; the complicated answer is “sometimes.” Here, I explain when the removal is a covered service by insurance, and when it is not.

Denied coverage

Medicare clearly defines its policy on cosmetic surgery coverage. The Medicare Benefit Policy Manual (MBPM) Chapter 16, §10 states, “No payment may be made … for certain items and services … [including] Cosmetic Surgery.” Additionally, in the same Manual, Chapter 16, § 120 notes: “Cosmetic surgery or expenses incurred in connection with such surgery is not covered.”

However, not all benign lesions can be identified as such in advance. No National Coverage Determination discusses this, so you must look at Local Coverage Determinations (LCD) published by Medicare Administrative Contractors (MACs). The Part A Medicare MAC for Florida publishes one such policy. In their most recent policy, they state: “Benign skin lesions are common in the elderly and are frequently removed at the patient’s request to improve appearance. Removal of certain benign skin lesions that does not pose a threat to health or function, are considered cosmetic and … are not covered by the Medicare program.”¹

Exceptions for acceptance

This policy notes that coverage might be provided when there is a threat to health or function; most MACs have similar coverage statements.

As always, the documentation you provide in the medical record is crucial to making sure the coverage, if provided by the payer, is fully supported in your notes. The Florida policy notes:

“There may be instances … the removal … is medically appropriate. Medicare will, therefore, consider their removal as medically necessary and not cosmetic, if one or more of the following conditions are present and clearly documented in the medical record:

• The lesion has one or more of the following characteristics: bleeding, itching, pain; change in physical appearance (reddening or pigmentary change), recent enlargement, increase in number; or

• The lesion has physical evidence of inflammation, e.g., purulence, edema, erythema …

• The lesion obstructs an orifice; or

• The lesion clinically restricts vision; or

• There is clinical uncertainty as to the likely diagnosis, particularly where malignancy is a realistic consideration based on the lesion appearance; or

• A prior biopsy suggests or is indicative of lesion malignancy; or

• The lesion is in an anatomical region subject to recurrent trauma, and there is documentation of such trauma …

The policy goes on to state, “Payment for the excision of benign lesions of skin includes payment for simple repairs. Separate payment may be made for medically necessary layered closures, adjacent tissue transfers, flaps and grafts …”.

It is clear that lesion removable is payable by insurance in some circumstances, even if the lesion is determined to be benign or requires larger repair. Be sure your chart note reflects all complaints regarding the lesions, or the examination notes a threat to health (such as possible malignancy if that is a concern). Weak documentation in the chart won’t support a claim; policies also generally match the Florida one, which states: “A medical record statement of ‘irritated skin lesion’ is insufficient justification for lesion removal when solely used to reference a patient’s complaint or a physician’s physical findings.”

Conclusion

In some cases, the lesion is clearly benign on exam, the patient does not complain (except those related to appearance), and the patient still desires removal. The same payer policy speaks to this. It notes, [if] “one or more of these benign asymptomatic lesions [is] removed for cosmetic purposes, the beneficiary becomes liable … The physician has the responsibility to notify the patient in advance that Medicare will not cover [it, and] the beneficiary will be liable for the cost of the service.” Further, it goes on to state: “In the absence of signs, symptoms, illness or injury (V50.1) should be reported, and payment will be denied … the decision to submit a specimen for pathological interpretation will be independent of the decision to remove or not remove the lesion.”

You must know proper documentation principles based on payer guidelines to support claims when lesions are benign (or properly ask the patient to pay for removal). Sending a specimen to pathology is not a requirement for coverage. Discuss with the patient in advance whether a claim to insurance is warranted, and when it is not, inform them of the fact.

As always, “Good Coding” to you! OP

REFERENCE:

Mr. Larson is a senior consultant at Corcoran Consulting Group. He specializes in coding and reimbursement. Mr. Larson is based in Atlanta.