Dermatology Billing Services: Biopsy Codes, Mohs Surgery Staging, and the Lesion-Counting Rules That Cost Practices Thousands

By Medtransic | February 15, 2026 | 16 min read | Updated: February 15, 2026

Quick Summary: Dermatology billing spans biopsies, excisions, Mohs surgery, lesion destructions, pathology, phototherapy, and cosmetic vs. medical distinctions — each with per-lesion counting rules, size-based code selection, and modifier requirements that general billing companies consistently get wrong.

At Medtransic, dermatology is one of the specialties where per-lesion counting rules, size-based code selection, and the cosmetic vs. medical distinction create a billing environment that punishes generalist billing companies. A single dermatology encounter might involve an E/M visit, two biopsies from different sites, destruction of seven actinic keratoses, and excision of a suspicious lesion — and each of those services has its own CPT code family, its own counting logic, and its own modifier requirements.

Dermatology practices have one of the highest outpatient volumes in medicine, and industry data shows denial rates averaging 11.8% when billing is handled by non-specialists. A single wrong biopsy code, a missed add-on for additional lesion destructions, or an excision billed without the correct margin measurement can cost a practice hundreds of dollars per claim — and those errors compound across hundreds of claims per month.

This guide covers the coding rules, modifier logic, and payer-specific traps that make dermatology one of the most technically demanding specialties to bill — and what your billing company should be doing to capture every dollar your practice earns.

Why Dermatology Billing Overwhelms General Billing Companies

Dermatology is unique because it combines high-volume procedural work with precise per-lesion and per-size coding requirements. A general internist might bill a handful of CPT codes per visit. A dermatologist performing biopsies, destructions, and excisions in a single encounter might use six to eight different codes — each requiring correct lesion counts, anatomic site specificity, and modifier logic that determines whether the claim is paid or denied.

The complexity multiplies when you add Mohs surgery (which requires the provider to serve as both surgeon and pathologist, with stage-by-stage coding), pathology services (which must align with the surgical codes), and the cosmetic vs. medical distinction (which determines whether a procedure is billable to insurance at all) — a level of surgical coding complexity rivaled only by specialties like orthopedic billing. That's why Medtransic assigns dedicated dermatology coders to every skin care practice we serve — coders who understand that 11102 and 11104 are not interchangeable, that 17000 and 17003 have different counting thresholds, and that modifier -25 on a same-day E/M requires specific documentation that most providers don't realize they're missing.

Biopsy Codes: Tangential, Punch, and Incisional

Dermatology biopsy coding was overhauled to separate biopsies by technique — tangential (shave), punch, and incisional. Each technique has its own primary code and add-on code, and mixing them up is one of the most common errors in dermatology billing. For a broader reference, see our CPT codes cheat sheet.

Medtransic verifies biopsy technique documentation and lesion count on every dermatology biopsy claim. The documentation must specify the technique used (tangential, punch, or incisional), the number of lesions biopsied, the anatomic site of each lesion, and the clinical indication. Missing any of these elements gives payers grounds for denial.

Excision Coding: Size, Margins, and the Benign vs. Malignant Split

Excision coding in dermatology is driven by three factors: whether the lesion is benign or malignant, the anatomic location, and the total excised diameter (lesion plus margins). Getting any one of these wrong changes the CPT code — and the reimbursement.

Benign Excisions (11400–11446)

Malignant Excisions (11600–11646)

The difference between benign and malignant excision codes can be significant in reimbursement. The correct code depends on the pathology result, not the clinical suspicion at the time of excision. If a lesion is excised as suspicious but pathology returns benign, bill the benign excision code. If pathology confirms malignancy, bill the malignant code. Medtransic holds excision claims until pathology results are available to ensure the correct benign/malignant code is submitted.

Lesion Destruction: The Counting Rules That Drive Revenue

Lesion destruction (cryotherapy, electrosurgery, laser surgery, chemosurgery) is one of the highest-volume services in dermatology — and the counting rules are where billing companies most frequently leave money on the table.

Premalignant Lesion Destruction (Actinic Keratoses)

Benign Lesion Destruction

The critical distinction: premalignant destruction codes (17000/17003) are billed per individual lesion count, while benign destruction codes (17110/17111) are flat-rate regardless of how many lesions are treated (within their brackets). This means a practice that destroys 12 actinic keratoses and 8 warts in the same visit bills 17000 + 11 units of 17003 + 17110 — the premalignant and benign destructions are coded separately. Medtransic's coding team verifies lesion counts and diagnosis codes on every destruction claim to ensure the correct code family is used.

Mohs Surgery Billing: Stages, Tissue Blocks, and the Dual-Role Requirement

Mohs micrographic surgery is the highest-value procedure in most dermatology practices — and the most complex to bill. A single Mohs case can generate $1,500 to $5,000+ in charges depending on the number of stages and the complexity of reconstruction, but incorrect coding is one of the top reasons for post-payment audits and recoupments.

The Dual-Role Requirement

Mohs surgery requires that the same physician acts as both surgeon and pathologist — excising tissue and immediately examining it under the microscope to determine clear margins. If either role is delegated to another physician who bills separately, the Mohs codes cannot be used. The procedure must instead be coded as a staged excision with separate pathology services. This is not a documentation nuance — it is a fundamental requirement that determines whether you bill 17311 (which reimburses significantly higher) or a standard excision code.

Mohs CPT Codes by Location and Stage

Reconstruction After Mohs

Repair is not included in the Mohs surgery codes. If an intermediate or complex repair, adjacent tissue transfer (flap), or skin graft is performed after Mohs, it is billed separately. However, there are critical bundling rules:

• Simple closure: Included in the excision component of Mohs. Do NOT bill simple repair codes (12001-12021) with Mohs surgery.
• Intermediate repair (12031-12057): Separately billable. Document the wound length, layered closure technique, and anatomic site.
• Complex repair (13100-13160): Separately billable. Requires documentation of extensive undermining, debridement, or retention sutures.
• Adjacent tissue transfer/flap (14000-14302): Separately billable. Note: the excision of the malignant lesion is bundled into the flap code — do NOT also bill a separate excision code (11600-11646) when a flap is performed after Mohs.
• Skin graft (15100-15261): Separately billable. Document defect size, donor site, and graft type.

Medtransic reviews every Mohs operative report for stage count, tissue block count, anatomic site accuracy, dual-role documentation, and reconstruction coding before the claim is submitted. Mohs claims without complete documentation of the surgeon's pathology role are automatically flagged for provider clarification.

Modifier Rules That Make or Break Dermatology Claims

Dermatology uses a specific set of modifiers that apply to multi-procedure encounters, same-day E/M billing, and post-operative period services — many of which overlap with the modifier challenges seen in primary care billing. Getting these wrong is the single fastest way to generate denials or trigger audits.

At Medtransic, modifier -25 is the modifier we audit most carefully in dermatology. Payers know that dermatology practices frequently bill E/M visits alongside procedures, and they audit -25 usage aggressively. The E/M documentation must clearly demonstrate that the evaluation addressed a clinical issue that was significant and separately identifiable from the procedure — not just the standard pre-procedure assessment. Our coders review every same-day E/M + procedure combination against the documentation before submission.

Cosmetic vs. Medical: The Documentation Line That Determines Payment

Dermatology straddles the line between medical and cosmetic more than any other specialty. Many procedures — scar revision, lesion removal, laser treatment — can be either medical or cosmetic depending on the clinical indication and documentation. Payers deny cosmetic services outright, so this distinction directly determines whether a claim generates revenue or a denial.

The gray area is where revenue leaks happen. A seborrheic keratosis that is irritated, bleeding, or symptomatic is a medical removal — document the symptoms. The same lesion removed purely because the patient doesn't like how it looks is cosmetic. A scar revision that restricts range of motion is medical — document the functional impairment. The same procedure for appearance alone is cosmetic. Medtransic advises dermatology providers on documentation language that supports medical necessity for procedures that genuinely have a clinical indication, ensuring billable services aren't mistakenly classified as cosmetic.

The 7 Most Common Dermatology Denials (and How to Prevent Them)

Dermatology denial rates average 11.8% industry-wide — well above the 5-6% that a specialized denial management approach backed by disciplined revenue cycle management can achieve. Here are the seven denials we see most often and how Medtransic prevents each one.

1. Modifier -25 denied on same-day E/M: Office visit billed with a biopsy or destruction without documentation supporting a separately identifiable service. Prevention: Medtransic reviews every same-day E/M + procedure claim and flags cases where the documentation doesn't support -25 before submission.
2. Wrong biopsy technique code: Billing 11104 (punch) when the operative note describes a tangential (shave) technique, or using the wrong add-on code when multiple techniques are used on the same day. Prevention: Our coders match the biopsy technique described in the note to the correct code family — 11102/03 for tangential, 11104/05 for punch, 11106/07 for incisional.
3. Excision without size documentation: Submitting an excision code without documented lesion size and margin measurements taken before anesthesia. Payers downcode to the smallest size bracket or deny entirely. Prevention: Medtransic holds excision claims that lack pre-anesthesia measurements and requests clarification from the provider before submitting.
4. Destruction code counting errors: Billing 17000 + 17003 + 17004 together when only 17004 should be used (15+ lesions), or billing 17004 when fewer than 15 lesions were treated. Prevention: Our claim scrubbing verifies lesion counts against the code threshold automatically.
5. Mohs billed without dual-role documentation: Submitting 17311-17315 without operative note documentation confirming the surgeon also performed the pathology interpretation. This is an audit trigger that can result in recoupment of the entire Mohs payment. Prevention: Medtransic flags every Mohs claim that lacks explicit dual-role documentation.
6. Cosmetic procedure billed to insurance: Submitting a lesion removal or laser treatment with an ICD-10 code that doesn't establish medical necessity, or billing a procedure that the note describes as cosmetically motivated. Prevention: We verify that every procedure claim has a supporting diagnosis that establishes a medical (not cosmetic) indication.
7. Missing prior authorization for Mohs or advanced procedures: Some commercial payers require pre-authorization for Mohs surgery, particularly for non-head/neck locations or multiple same-day lesions. Prevention: Medtransic tracks auth requirements by payer and procedure, verifying coverage before the service date.

What to Demand From a Dermatology Billing Service

Dermatology billing requires per-lesion precision, technique-specific code selection, and cosmetic vs. medical judgment on every claim. Here's what to ask when evaluating a billing partner.

• Dermatology-specific coding expertise: Ask how many dermatology practices they serve and whether their coders can explain the difference between 11102, 11104, and 11106 without looking them up. If they can't name the biopsy technique families, they're not ready for dermatology.
• Biopsy counting logic: Ask them to explain how they code a same-day encounter with one tangential biopsy and two punch biopsies. The correct answer is 11102 + 11104 + 11105 — if they say 11102 + 11103 × 2, they don't understand technique-specific add-on rules.
• Excision size verification: Ask whether they hold excision claims until pathology results confirm benign vs. malignant, and whether they verify pre-anesthesia measurements are documented. If they submit excision claims before pathology is back, they're guessing on the benign/malignant code.
• Mohs surgery coding process: Ask how they verify dual-role documentation, count stages and tissue blocks, and handle same-day multi-lesion cases. If they can't explain when to use -59 on a second first-stage code, they shouldn't be touching Mohs claims.
• Destruction code threshold awareness: Ask them to explain the 17000/17003/17004 counting logic and when 17110 vs. 17111 applies. If they don't immediately reference the 15-lesion threshold, they're miscounting destructions.
• Denial rate across dermatology clients: Ask for their denial rate specifically for dermatology claims. Industry average is 11.8% — a specialist should be below 6%.
• Cosmetic vs. medical classification process: Ask how they determine whether a procedure is billable to insurance. If they don't reference documentation of symptoms, functional impairment, or clinical indication, they're likely either overbilling cosmetic services or underbilling medical ones.
• Pathology coordination: Ask whether they coordinate excision and biopsy claim coding with pathology results, and whether they hold claims pending pathology when the benign/malignant distinction affects code selection.

At Medtransic, dermatology billing is a core specialty. Our dermatology coders review every biopsy technique, excision measurement, lesion destruction count, and Mohs operative report before claims are submitted. We hold excision claims for pathology confirmation, verify modifier -25 documentation on every same-day E/M, and maintain payer-specific rules for Mohs authorization and multi-lesion billing. The result is clean claims, faster reimbursement, and a denial rate that stays well below the industry average.

• 97%+ Clean Claim Rate - Dermatology claims accepted on first submission
• <5% Denial Rate - Across Medtransic dermatology clients
• <28 days Average Days in AR - For dermatology practices using Medtransic
• 98%+ Net Collection Ratio - Revenue collected vs. owed