Dermatology Billing Guidelines for 2026: Complete CPT, ICD-10, CMS & Reimbursement Guide
- Sirius solutions global
- Jan 28
- 6 min read
Last Tuesday, a dermatology practice in Michigan called us frustrated. They would been losing money for months but couldn't figure out why. Their schedule was packed 40-50 patients daily, performing biopsies, excisions, Mohs surgeries. Yet their revenue kept declining.
We ran a 90-day billing audit. The problem became clear within hours: they were billing simple excisions (11400-series codes) for procedures that should have been coded as complex repairs requiring layered closure (13100-series). The difference? About $75-125 per procedure. Over three months, this single coding error cost them nearly $18,000 in lost reimbursement.
The frustrating part? Their clinical documentation was perfect. Operative notes clearly described layered closures with undermining and intermediate suturing. But nobody had trained their billing team to recognize when documentation supported higher-level codes. They were literally leaving money on the operating table.
This isn't unusual. Dermatology billing in 2026 has become incredibly complex. Between constantly changing CPT codes, strict modifier requirements, payer-specific bundling rules, and aggressive medical necessity audits, even experienced practices struggle to capture maximum appropriate reimbursement.
At Sirius Solutions Global, we've specialized in dermatology revenue cycle management for over five years. We've seen every billing mistake imaginable—and more importantly, we've helped practices fix them. This guide shares everything you need to know about dermatology billing compliance and revenue optimization in 2026.
Why Dermatology Billing Requires Specialized Expertise
Dermatology might seem straightforward a biopsy is a biopsy, an excision is an excision, right? Not even close.
The Clinical Complexity Creates Coding Nightmares
Consider a typical dermatology session: Patient presents with multiple suspicious lesions. You perform three punch biopsies on different sites, excise one melanoma with complex layered closure, destroy five actinic keratoses with cryotherapy, and do a skin exam documenting ABCDE criteria for 15 additional lesions.
How do you code that?
Primary biopsy code (11104) plus two add-ons (11105 x2)
Excision code based on lesion size and site
Complex repair code for the closure
Maybe a separate E/M code if significant evaluation occurred beyond the procedures
Destruction code (17000) for the first AK, plus add-on codes for additional lesions
Proper modifiers indicating distinct procedures
Miss even one element and you've underbilled. Add an inappropriate code and you risk an audit. The margin for error is razor-thin.
Documentation Determines Everything
In dermatology more than almost any specialty, your operative note literally determines your reimbursement. The difference between billing a simple closure versus intermediate versus complex entirely depends on documented technique.
"Closed with sutures" gets you simple closure codes paying $100-150.
"Layered closure with 4-0 Vicryl deep dermal sutures followed by 5-0 nylon superficial interrupted sutures with undermining of wound edges" gets you intermediate or complex closure codes paying $250-450.
Same procedure. Same clinical work. Vastly different reimbursement based purely on documentation quality.
Essential Dermatology CPT Codes You Need to Master
Let's cut through the complexity. Here are the codes generating the most revenue and causing the most confusion for dermatology practices in 2026.
Evaluation and Management (E/M) Codes
New Patient Codes:
99202: Straightforward medical decision-making (MDM) - ~$73
99203: Low complexity MDM - ~$109
99204: Moderate complexity MDM - ~$167
99205: High complexity MDM - ~$211
Established Patient Codes:
99212: Straightforward MDM - ~$55
99213: Low complexity MDM - ~$93
99214: Moderate complexity MDM - ~$132
99215: High complexity MDM - ~$185
The Critical Question: When can you bill E/M codes separately from procedures?
Only when the evaluation is significant and separately identifiable from the procedure itself. If the patient comes in for biopsy of a specific lesion and you do the biopsy, that's just the procedure. But if the patient comes in for full-body skin exam, you identify multiple concerning lesions requiring discussion of risks/benefits/treatment options, AND you perform a biopsy—that's billable E/M service with modifier 25.
Biopsy Codes (11102-11107)
Tangential Biopsies (Shave/Scoop):
11102: First lesion - ~$92
11103: Each additional lesion - ~$48
Punch Biopsies:
11104: First lesion - ~$99
11105: Each additional lesion - ~$51
Incisional Biopsies:
11106: First lesion - ~$134
11107: Each additional lesion - ~$59
The Coding Trap: Don't mix biopsy types. If you do three punch biopsies, code 11104 + 11105 + 11105. If you do two punch and one shave, code 11104 + 11105 + 11102 (or vice versa depending on which was first).
Lesion Destruction (17000-17286)
Premalignant Lesion Destruction:
17000: First lesion - ~$97
17003: 2-14 additional lesions (total) - ~$91
17004: 15+ lesions - ~$135
Critical Rule: These are bundled codes. Don't bill 17000 fifteen times for fifteen lesions. Bill 17000 once for the first, then 17004 once for the remaining 14+.
Benign Lesion Destruction:
17110: Up to 14 lesions - ~$139
17111: 15+ lesions - ~$290
Excision Codes (11400-11646)
Excision coding depends on THREE factors: lesion pathology (benign vs. malignant), anatomical location, and excised diameter (including margins).
Benign Lesion Excisions (11400-11446): Vary by site and size. Example trunk excisions:
11400: ≤0.5 cm - ~$142
11401: 0.6-1.0 cm - ~$171
11402: 1.1-2.0 cm - ~$200
11403: 2.1-3.0 cm - ~$246
Malignant Lesion Excisions (11600-11646): Higher reimbursement than benign. Example trunk excisions:
11600: ≤0.5 cm - ~$192
11601: 0.6-1.0 cm - ~$228
11602: 1.1-2.0 cm - ~$280
11603: 2.1-3.0 cm - ~$379
The Measurement Rule: Measure the lesion PLUS margins. A 1.5 cm melanoma excised with 0.5 cm margins = 2.5 cm excised diameter = code 11603 (2.1-3.0 cm), not 11602.
Repair Codes (12001-13160)
Simple Repair: Single-layer closure, minimal undermining Intermediate Repair: Layered closure or extensive undermining Complex Repair: Complicated wound closure requiring extensive undermining, stenting, retention sutures
Your operative note must explicitly describe technique to support intermediate or complex codes. "Closed with sutures" defaults to simple repair.
Common Dermatology Billing Mistakes That Cost Real Money
Let's examine the errors we see costing practices thousands monthly:
Mistake #1: Undercoding Excisions
Practices measure the lesion itself but forget to add margins when selecting excision codes. A 1.2 cm basal cell with 0.4 cm margins should be coded as 1.6 cm excised diameter, not 1.2 cm.
Lost revenue per case: $50-80 Annual impact: $12,000-$20,000 for practices doing 15-20 excisions weekly
Mistake #2: Not Billing Intermediate/Complex Repairs
When documentation supports layered closure, bill for it. Many practices default to simple repair codes even when operative notes describe intermediate or complex techniques.
Lost revenue per case: $100-200 Annual impact: $25,000-$50,000+ for active surgical practices
Mistake #3: Bundling Destruction Codes Incorrectly
Billing 17000 fifteen times instead of 17000 + 17004 once. Or worse, billing only 17000 and missing the additional lesions entirely.
Lost revenue: Variable, but easily $3,000-$8,000 annually
Mistake #4: Missing the E/M with Modifier 25
When you perform significant separate evaluation before a procedure, that's billable. But you must use modifier 25 on the E/M code to indicate it's distinct from the procedure.
Lost revenue per case: $75-150 Annual impact: $15,000-$40,000 depending on practice volume
Mistake #5: Inadequate Medical Necessity Documentation
"Lesion noted, excised, sent to path" won't cut it anymore. Payers want documentation explaining WHY excision was necessary: "2.1 cm pigmented lesion on back with irregular borders, color variegation, recent size increase per patient report. Clinical suspicion for melanoma. Excision recommended and performed."
Critical ICD-10 Diagnosis Codes for Dermatology
Your diagnosis codes must support medical necessity. Common codes include:
Malignant Neoplasms:
C43.9: Malignant melanoma of skin, unspecified
C44.91: Basal cell carcinoma, unspecified
C44.92: Squamous cell carcinoma, unspecified
Benign Neoplasms:
D22.9: Melanocytic nevus, unspecified
D23.9: Other benign neoplasm of skin, unspecified
Actinic Keratosis:
L57.0: Actinic keratosis
Other Common Conditions:
L70.0: Acne vulgaris
L40.0: Psoriasis vulgaris
L30.9: Dermatitis, unspecified
R21: Rash and other nonspecific skin eruption
Link diagnosis codes correctly: Excision of melanoma requires C43.x code. Excision of benign nevus requires D22.x or D23.x code. Wrong diagnosis = denied claim.
Top Dermatology Medical Billing Companies in 2026
Based on denial reduction, specialty expertise, compliance track records, and client outcomes:
Sirius Solutions Global – Leading with deep dermatology focus, expert handling of skin substitute changes, and proven 15-25% revenue lifts.
AnnexMed
CureMD
Practolytics
Medisys Data
How Sirius Solutions Global Maximizes Dermatology Revenue
After examining these complexities, it's clear dermatology billing requires specialized expertise. Here's how we help practices optimize revenue:
Procedure-Specific Code Validation
Our certified dermatology coders review operative notes against billed codes, catching undercoding before claims submit. We verify:
Excised diameters include documented margins
Repair codes match documented closure techniques
Destruction codes bundle correctly
Biopsy add-on codes are properly sequenced
Automated Documentation Checks
Our platform flags potential problems: missing measurements, vague closure descriptions, unclear medical necessity language. Providers receive real-time feedback improving future documentation.
Payer-Specific Intelligence
We track payer policies on modifier requirements, bundling edits, medical necessity criteria. Claims are scrubbed against payer-specific rules before submission.
Results Our Dermatology Clients Experience:
18-30% revenue increase within 6 months (from proper coding, not upcoding)
98%+ clean claim rates
Denial rates under 3%
Collections within 28-32 days average
Schedule a complimentary dermatology billing analysis: (469) 694-5375 | Info@siriussolutionsglobal.com | www.siriussolutionsglobal.com