As you know, CMS and other third-party payers recently have been scrutinizing CPT code 88305 (histopathology code for most skin tissue specimen). It is important to understand the new rules and regulations governing the dermatopathology billing by dermatologists. First, this article will review the family of surgical pathology CPT codes and then will look at recent direct billing regulations for those services by dermatologists.
The most common code we use is 88305. This code is almost always used for every pathology specimen that we generate, and sometimes it may be used incorrectly. Therefore, it is necessary to know the exclusions for 88305.
Cysts, skin tags, lipomas, abscess, Duputyren’s contracture, fissure, fistula, foreskin but not newborn, and debridement diagnoses should be all reported by 88304. Cyst and acrochordon are probably the most relevant diagnoses to our daily practice. Oral mucosa biopsy readings, such as tongue, gingiva or dental cyst specimen examinations, can be reported by 88305. Nasal mucosa histopathology also should be reported by 88305.
On the other hand, skin specimen without a diagnosis from a reconstructive surgery or scar revision should be reported by 88302, which also covers normal newborn foreskin as well as digits removed by traumatic amputation.1
Next, let’s discuss frozen section codes 88331 and 88332. CPT code 88331 is used to bill for the first block of the frozen section specimen and 88332 is for each additional frozen section specimen and can be billed in units.1
These codes are still technically allowed by third-party payers to be billed during Mohs micrographic surgery as long as there is no biopsy report on that particular lesion before Mohs surgery is performed or the biopsy dates back to 6 months or earlier. However, each time you bill these codes with Mohs surgery codes, it is almost guaranteed you will be denied first and then have to appeal with office notes and justification for why you did the frozen sections. Fortunately, these codes are still easily reimbursed when they are used with margin-controlled excisions.
Recent Rules and Regulations
Here is a review of the most recent rules and regulations for dermatopathology billing by dermatologists. The best way to do this is by presenting different scenarios as examples. To begin with, remember 88305 has two components:
• Professional component that includes the appropriate reporting of histopathologic interpretation of the specimen
• Technical component that is the preparation of the actual slide itself
Hence, each component can be billed separately or together as a whole (one service) if they are performed by the same entity.
The easiest arrangement for the dermatologist is to read his or her own slides and to bill for his or her own professional component as long as slides are prepared by a different entity and billed by that entity directly for the technical component.
Hiring A Dermatopathologist
It gets complicated when the dermatologist wants to hire a dermatopathologist for the reading of the slides. Let’s look at this now in a detailed fashion.
What if the practice does not want to build a laboratory to process the specimen but still wants to charge for the professional component? It is possible to do that by hiring a part-time dermatopathologist and the specimen then would be sent to an outside lab for processing. The outside lab would bill Medicare and other third-party payers directly for the technical component.
The only condition here is that the dermatopathologist has to read the slides in the dermatologist’s office on premises to avoid the Medicare anti-markup restriction and also to comply with the “Stark same building” criterion. The salary arrangement has to meet the applicable Stark exception criteria as well as safe harbor rules under Medicare and Medicaid anti-kickback law.
Another important caveat is if the hiring dermatologist is done by a solo practice with only one doctor then the dermatopathologist should be a W2 employee — not an independent contractor. Thus, the practice can be considered as a group practice under the Stark law. These conditions will meet the in-office ancillary services exception but may be costly to the practice. Therefore, the economic impact of hiring a dermatopathologist as an employee must be balanced with the income that will be produced.1
The above scenario will get more complicated if the dermatology group has more than one office. Then, the dermatopathologist has to meet one of the 2 criteria to avoid the Medicare anti-markup restriction:
1. The dermatopathologist has to provide at least 75% of his or her services through that particular dermatology practice that he or she is working for. This condition makes it practically impossible for the dermatopathologist to work somewhere else.
2. The dermatopathologist should provide the reading of the specimen onsite in a location where each of the referring dermatologists provides substantially the full range of their services. This is a very difficult criterion to meet.1
Of course if the dermatologist wants to bill for 88505 as a whole including both technical and professional components, then an in-house lab has to be built to prepare the slides in any of the scenarios discussed above.
It is important to remember that the dermatopathologist has to be credentialed under the dermatologist’s tax ID number. Also, coverage for malpractice has to be provided for the dermatopathologist. Of course, the complex Clinical Laboratory Improvement Amendments (CLIA) certificate should not be forgotten. It is crucial to discuss this ahead of time with the dermatopathologist in order to keep up with the required paperwork for the maintenance of the CLIA certificate as part of the dermatopathologist’s job description.1
Direct Billing Laws
Finally, some states have very specific direct billing laws, therefore dermatology practices have to be careful.1 For example, some state laws specify that the dermatopathologist has to be an owner, partner or a W2 employee of the practice (not an independent contractor). This means the practice must provide expensive benefits, such as a pension plan, health insurance, vacation and holidays to the part-time dermatopathologist. Other costs for the professional billing component include computer software to create acceptable reports that should at least include the description of gross specimen. It is not enough to report the diagnosis such as basal cell carcinoma without a description. For the technical component, building a laboratory with appropriate specifications, including cryostats, slide baths, cabinetry, fume hoods and other components, can be quite expensive.
As you can see, it has become very difficult and costly to direct bill pathology services for dermatology practices. Therefore, it is crucial that dermatologists do their homework before they embark on hiring a dermatopathologist. The number one factor is to see if the practice has enough volume to make this endeavor profitable.
Finally, some third party payer contracts require the specimen of their members be sent to large labs, such as Quest or LabCorp, that exclude the practice’s dermatopathology services.
Dermatopathology has always been part of dermatology practice and it has been attacked several times in the past not only by third-party payers but also other specialties, in particular pathologists. I always wonder how many times we can weather the storm.
Dr. Kircik is an associate clinical professor of dermatology at Indiana University Medical Center. He is also the Medical Director of Derm Research, PLLC, and Physicians Skin Care, PLLC, in Louisville, KY.
Disclosure: Dr. Kircik has no conflicts of interest to report in relation to the content of this column.
Reference
1. Coding and Documentation for Dermatology. 2012;74-88.
As you know, CMS and other third-party payers recently have been scrutinizing CPT code 88305 (histopathology code for most skin tissue specimen). It is important to understand the new rules and regulations governing the dermatopathology billing by dermatologists. First, this article will review the family of surgical pathology CPT codes and then will look at recent direct billing regulations for those services by dermatologists.
The most common code we use is 88305. This code is almost always used for every pathology specimen that we generate, and sometimes it may be used incorrectly. Therefore, it is necessary to know the exclusions for 88305.
Cysts, skin tags, lipomas, abscess, Duputyren’s contracture, fissure, fistula, foreskin but not newborn, and debridement diagnoses should be all reported by 88304. Cyst and acrochordon are probably the most relevant diagnoses to our daily practice. Oral mucosa biopsy readings, such as tongue, gingiva or dental cyst specimen examinations, can be reported by 88305. Nasal mucosa histopathology also should be reported by 88305.
On the other hand, skin specimen without a diagnosis from a reconstructive surgery or scar revision should be reported by 88302, which also covers normal newborn foreskin as well as digits removed by traumatic amputation.1
Next, let’s discuss frozen section codes 88331 and 88332. CPT code 88331 is used to bill for the first block of the frozen section specimen and 88332 is for each additional frozen section specimen and can be billed in units.1
These codes are still technically allowed by third-party payers to be billed during Mohs micrographic surgery as long as there is no biopsy report on that particular lesion before Mohs surgery is performed or the biopsy dates back to 6 months or earlier. However, each time you bill these codes with Mohs surgery codes, it is almost guaranteed you will be denied first and then have to appeal with office notes and justification for why you did the frozen sections. Fortunately, these codes are still easily reimbursed when they are used with margin-controlled excisions.
Recent Rules and Regulations
Here is a review of the most recent rules and regulations for dermatopathology billing by dermatologists. The best way to do this is by presenting different scenarios as examples. To begin with, remember 88305 has two components:
• Professional component that includes the appropriate reporting of histopathologic interpretation of the specimen
• Technical component that is the preparation of the actual slide itself
Hence, each component can be billed separately or together as a whole (one service) if they are performed by the same entity.
The easiest arrangement for the dermatologist is to read his or her own slides and to bill for his or her own professional component as long as slides are prepared by a different entity and billed by that entity directly for the technical component.
Hiring A Dermatopathologist
It gets complicated when the dermatologist wants to hire a dermatopathologist for the reading of the slides. Let’s look at this now in a detailed fashion.
What if the practice does not want to build a laboratory to process the specimen but still wants to charge for the professional component? It is possible to do that by hiring a part-time dermatopathologist and the specimen then would be sent to an outside lab for processing. The outside lab would bill Medicare and other third-party payers directly for the technical component.
The only condition here is that the dermatopathologist has to read the slides in the dermatologist’s office on premises to avoid the Medicare anti-markup restriction and also to comply with the “Stark same building” criterion. The salary arrangement has to meet the applicable Stark exception criteria as well as safe harbor rules under Medicare and Medicaid anti-kickback law.
Another important caveat is if the hiring dermatologist is done by a solo practice with only one doctor then the dermatopathologist should be a W2 employee — not an independent contractor. Thus, the practice can be considered as a group practice under the Stark law. These conditions will meet the in-office ancillary services exception but may be costly to the practice. Therefore, the economic impact of hiring a dermatopathologist as an employee must be balanced with the income that will be produced.1
The above scenario will get more complicated if the dermatology group has more than one office. Then, the dermatopathologist has to meet one of the 2 criteria to avoid the Medicare anti-markup restriction:
1. The dermatopathologist has to provide at least 75% of his or her services through that particular dermatology practice that he or she is working for. This condition makes it practically impossible for the dermatopathologist to work somewhere else.
2. The dermatopathologist should provide the reading of the specimen onsite in a location where each of the referring dermatologists provides substantially the full range of their services. This is a very difficult criterion to meet.1
Of course if the dermatologist wants to bill for 88505 as a whole including both technical and professional components, then an in-house lab has to be built to prepare the slides in any of the scenarios discussed above.
It is important to remember that the dermatopathologist has to be credentialed under the dermatologist’s tax ID number. Also, coverage for malpractice has to be provided for the dermatopathologist. Of course, the complex Clinical Laboratory Improvement Amendments (CLIA) certificate should not be forgotten. It is crucial to discuss this ahead of time with the dermatopathologist in order to keep up with the required paperwork for the maintenance of the CLIA certificate as part of the dermatopathologist’s job description.1
Direct Billing Laws
Finally, some states have very specific direct billing laws, therefore dermatology practices have to be careful.1 For example, some state laws specify that the dermatopathologist has to be an owner, partner or a W2 employee of the practice (not an independent contractor). This means the practice must provide expensive benefits, such as a pension plan, health insurance, vacation and holidays to the part-time dermatopathologist. Other costs for the professional billing component include computer software to create acceptable reports that should at least include the description of gross specimen. It is not enough to report the diagnosis such as basal cell carcinoma without a description. For the technical component, building a laboratory with appropriate specifications, including cryostats, slide baths, cabinetry, fume hoods and other components, can be quite expensive.
As you can see, it has become very difficult and costly to direct bill pathology services for dermatology practices. Therefore, it is crucial that dermatologists do their homework before they embark on hiring a dermatopathologist. The number one factor is to see if the practice has enough volume to make this endeavor profitable.
Finally, some third party payer contracts require the specimen of their members be sent to large labs, such as Quest or LabCorp, that exclude the practice’s dermatopathology services.
Dermatopathology has always been part of dermatology practice and it has been attacked several times in the past not only by third-party payers but also other specialties, in particular pathologists. I always wonder how many times we can weather the storm.
Dr. Kircik is an associate clinical professor of dermatology at Indiana University Medical Center. He is also the Medical Director of Derm Research, PLLC, and Physicians Skin Care, PLLC, in Louisville, KY.
Disclosure: Dr. Kircik has no conflicts of interest to report in relation to the content of this column.
Reference
1. Coding and Documentation for Dermatology. 2012;74-88.
As you know, CMS and other third-party payers recently have been scrutinizing CPT code 88305 (histopathology code for most skin tissue specimen). It is important to understand the new rules and regulations governing the dermatopathology billing by dermatologists. First, this article will review the family of surgical pathology CPT codes and then will look at recent direct billing regulations for those services by dermatologists.
The most common code we use is 88305. This code is almost always used for every pathology specimen that we generate, and sometimes it may be used incorrectly. Therefore, it is necessary to know the exclusions for 88305.
Cysts, skin tags, lipomas, abscess, Duputyren’s contracture, fissure, fistula, foreskin but not newborn, and debridement diagnoses should be all reported by 88304. Cyst and acrochordon are probably the most relevant diagnoses to our daily practice. Oral mucosa biopsy readings, such as tongue, gingiva or dental cyst specimen examinations, can be reported by 88305. Nasal mucosa histopathology also should be reported by 88305.
On the other hand, skin specimen without a diagnosis from a reconstructive surgery or scar revision should be reported by 88302, which also covers normal newborn foreskin as well as digits removed by traumatic amputation.1
Next, let’s discuss frozen section codes 88331 and 88332. CPT code 88331 is used to bill for the first block of the frozen section specimen and 88332 is for each additional frozen section specimen and can be billed in units.1
These codes are still technically allowed by third-party payers to be billed during Mohs micrographic surgery as long as there is no biopsy report on that particular lesion before Mohs surgery is performed or the biopsy dates back to 6 months or earlier. However, each time you bill these codes with Mohs surgery codes, it is almost guaranteed you will be denied first and then have to appeal with office notes and justification for why you did the frozen sections. Fortunately, these codes are still easily reimbursed when they are used with margin-controlled excisions.
Recent Rules and Regulations
Here is a review of the most recent rules and regulations for dermatopathology billing by dermatologists. The best way to do this is by presenting different scenarios as examples. To begin with, remember 88305 has two components:
• Professional component that includes the appropriate reporting of histopathologic interpretation of the specimen
• Technical component that is the preparation of the actual slide itself
Hence, each component can be billed separately or together as a whole (one service) if they are performed by the same entity.
The easiest arrangement for the dermatologist is to read his or her own slides and to bill for his or her own professional component as long as slides are prepared by a different entity and billed by that entity directly for the technical component.
Hiring A Dermatopathologist
It gets complicated when the dermatologist wants to hire a dermatopathologist for the reading of the slides. Let’s look at this now in a detailed fashion.
What if the practice does not want to build a laboratory to process the specimen but still wants to charge for the professional component? It is possible to do that by hiring a part-time dermatopathologist and the specimen then would be sent to an outside lab for processing. The outside lab would bill Medicare and other third-party payers directly for the technical component.
The only condition here is that the dermatopathologist has to read the slides in the dermatologist’s office on premises to avoid the Medicare anti-markup restriction and also to comply with the “Stark same building” criterion. The salary arrangement has to meet the applicable Stark exception criteria as well as safe harbor rules under Medicare and Medicaid anti-kickback law.
Another important caveat is if the hiring dermatologist is done by a solo practice with only one doctor then the dermatopathologist should be a W2 employee — not an independent contractor. Thus, the practice can be considered as a group practice under the Stark law. These conditions will meet the in-office ancillary services exception but may be costly to the practice. Therefore, the economic impact of hiring a dermatopathologist as an employee must be balanced with the income that will be produced.1
The above scenario will get more complicated if the dermatology group has more than one office. Then, the dermatopathologist has to meet one of the 2 criteria to avoid the Medicare anti-markup restriction:
1. The dermatopathologist has to provide at least 75% of his or her services through that particular dermatology practice that he or she is working for. This condition makes it practically impossible for the dermatopathologist to work somewhere else.
2. The dermatopathologist should provide the reading of the specimen onsite in a location where each of the referring dermatologists provides substantially the full range of their services. This is a very difficult criterion to meet.1
Of course if the dermatologist wants to bill for 88505 as a whole including both technical and professional components, then an in-house lab has to be built to prepare the slides in any of the scenarios discussed above.
It is important to remember that the dermatopathologist has to be credentialed under the dermatologist’s tax ID number. Also, coverage for malpractice has to be provided for the dermatopathologist. Of course, the complex Clinical Laboratory Improvement Amendments (CLIA) certificate should not be forgotten. It is crucial to discuss this ahead of time with the dermatopathologist in order to keep up with the required paperwork for the maintenance of the CLIA certificate as part of the dermatopathologist’s job description.1
Direct Billing Laws
Finally, some states have very specific direct billing laws, therefore dermatology practices have to be careful.1 For example, some state laws specify that the dermatopathologist has to be an owner, partner or a W2 employee of the practice (not an independent contractor). This means the practice must provide expensive benefits, such as a pension plan, health insurance, vacation and holidays to the part-time dermatopathologist. Other costs for the professional billing component include computer software to create acceptable reports that should at least include the description of gross specimen. It is not enough to report the diagnosis such as basal cell carcinoma without a description. For the technical component, building a laboratory with appropriate specifications, including cryostats, slide baths, cabinetry, fume hoods and other components, can be quite expensive.
As you can see, it has become very difficult and costly to direct bill pathology services for dermatology practices. Therefore, it is crucial that dermatologists do their homework before they embark on hiring a dermatopathologist. The number one factor is to see if the practice has enough volume to make this endeavor profitable.
Finally, some third party payer contracts require the specimen of their members be sent to large labs, such as Quest or LabCorp, that exclude the practice’s dermatopathology services.
Dermatopathology has always been part of dermatology practice and it has been attacked several times in the past not only by third-party payers but also other specialties, in particular pathologists. I always wonder how many times we can weather the storm.
Dr. Kircik is an associate clinical professor of dermatology at Indiana University Medical Center. He is also the Medical Director of Derm Research, PLLC, and Physicians Skin Care, PLLC, in Louisville, KY.
Disclosure: Dr. Kircik has no conflicts of interest to report in relation to the content of this column.
Reference
1. Coding and Documentation for Dermatology. 2012;74-88.
