6 Essential Dermatology Billing Updates for Practices in 2025

The dermatology billing landscape is evolving rapidly, and practices need to stay ahead to maintain financial health. With healthcare spending projected to reach $6.2 trillion in 2028, proper billing and coding in dermatology are more important than ever. As new regulations, technology advancements, and reimbursement changes take effect in 2025, staying informed can help practices reduce errors and maximize revenue.

In this blog, we’ll explore six essential dermatology billing updates that every practice should be aware of in 2025. Whether you’re managing a dermatology clinic or an individual practice, these updates will provide crucial insights to ensure smooth operations and improved billing efficiency.

What Is Billing For Dermatology? 

Medical billing for dermatology is the process of submitting medical claims for the services that have been rendered to the patient. This process ensures that the provider gets reimbursed for the services they have provided.

Latest Dermatology Billing Updates in 2025

As we approach 2025, dermatology practices should stay informed about the evolving billing and coding practices to ensure compliance and improve the overall revenue of their practice. The healthcare industry is undergoing various changes and updates, and staying ahead of them is very important to ensure smooth operation.

Below are the top six dermatology billing updates for 2025 that every practice needs to be aware of.

1. Revised CPT Codes for Skin Biopsies and Lesion Excision

In 2025, there will be a revision to the CPT codes related to skin biopsies and lesion excision. These changes aim to capture the complexities of dermatologic procedures. Dermatology practices should stay updated about the changes to ensure accurate billing and avoid payment delays. With these updates, certain biopsies may now be categorized differently, affecting reimbursement rates.

Example:

Previously, excisions of benign skin lesions could be billed under the same CPT code regardless of lesion size. In 2025, there will be different codes for excision based on the size of the lesion (e.g., 11400 for excision of a benign skin lesion measuring 0.5 cm or less, and 11402 for a lesion between 0.6 and 1.0 cm). The new codes will reflect a more precise approach to billing for these procedures.

Procedure Type	Updated CPT Code (2025)
Skin Biopsy	11101
Excision of benign skin lesions (< 0.5 cm)	11400
Excision of benign skin lesions (0.6 cm to 1.0 cm)	11402
Excision of benign skin lesions (1.1 cm to 2.0 cm)	11404

2. New ICD-10-CM Codes for Dermatologic Conditions

New ICD-10-CM codes are going to be introduced for various dermatologic conditions in 2025. These codes reflect the specificity of dermatological diagnosis, including updates for conditions like eczema, psoriasis and skin infections. Accurate coding is crucial for proper claim processing, dermatology practices will need to incorporate these changes into their billing system to ensure proper reimbursement. 

Example:

The ICD-10 code for psoriasis will now include subtypes such as “psoriasis vulgaris” (L40.0), “psoriatic arthritis” (L40.5), and others, allowing for more accurate diagnosis and billing.

Condition	2024 ICD-10 Code	2025 ICD-10 Code
Psoriasis	L40	L40.0 (vulgaris), L40.5 (psoriatic arthritis)
Basal Cell Carcinoma	C44.01	C44.02 (with metastasis)

3. Stricter Documentation Requirements for Mohs Surgery

The documentation requirements are being strict in 2025, the new guidelines are aimed at improving the accuracy of claims submissions. Dermatologists performing Mohs surgery will now need to ensure that their documentation includes all the details on the surgical procedure, margins, and specimen handling. It helps in reducing the chances of delays and rejection of claims and ensuring smoother reimbursement for these procedures. 

Example

For Mohs surgery, the documentation must now include the specific layers of skin excised, the pathology reports for each excision, and detailed information on the number of stages required to achieve clear margins. Missing or incomplete documentation could lead to claim denials.

4. Increased Scrutiny on Modifier Usage

Those modifiers that are used to indicate special circumstances or additional procedures will be under greater observation in 2025. Using the accurate modifier is very important to ensure appropriate reimbursement and avoid audits. Dermatology practices need to make sure that they use the correct modifier, as improper and inaccurate modifiers can lead to claim denials and overpayment, which can also lead to audits.

Example:
If a patient undergoes a skin excision and a flap repair in the same session, you would use modifier 51 (Multiple Procedures) to indicate multiple surgeries. However, using this modifier incorrectly or unnecessarily could lead to a claim denial.

Modifier	Description	When to Use
51	Multiple Procedures	When multiple procedures are performed during a single session
25	Significant, Separate E/M Service	When a separate evaluation and management service is provided

5. Updated Billing Guidelines for Teledermatology

Telemedicine is growing, and updated teledermatology billing rules will take effect in 2025. These revisions are aimed at standardizing billing for remote dermatology consultations and ensuring that the practices are properly compensated for virtual visits. Providers will need to understand the new teledermatology codes, documentation requirements, and payer-specific policies to ensure proper reimbursement for these services.

Example:

Previously, virtual dermatology visits were often coded under generic telemedicine codes (e.g., 99441 for phone consultations). In 2025, there will be dedicated codes for teledermatology consultations, such as 99442 for virtual visits involving an established patient and 99443 for new patients.

Visit Type	2024 Code	2025 Code
Established Patient	99441, 99442, 99443	99441, 99442, 99443
New Patient	99442, 99443	99441, 99442, 99443

6. Payer Policy Changes Impacting Dermatology Claims

Payer policies keep evolving, 2025 will bring some new updates that affect dermatology claims. Insurance companies are revising their reimbursement schedules, medical necessity requirements and pre-authorization procedures. Dermatology practices should stay ahead of these changes, especially when it comes to high-cost procedures or services that are not typically covered under the traditional insurance plans. 

Example:

Some insurance providers will no longer cover certain cosmetic procedures like Botox injections for hyperhidrosis unless there is substantial documentation showing that other treatments have failed. Additionally, some payers may now require pre-authorization for dermatologic surgeries that were previously covered without it.

Procedure	2024 Coverage	2025 Coverage
Botox for Hyperhidrosis	Covered	Requires Pre-Authorization
Mohs Surgery	Covered	Covered with Documentation

Updates to ICD-10 and CPT Code Crosswalks in Dermatology

In 2025, key updates to ICD-10 and CPT codes will affect dermatology billing. Accurate cross-linking between ICD-10 (diagnosis codes) and CPT (procedure codes) is crucial to avoid claim rejections.

Key Updates:

• Psoriasis: New ICD-10 codes specify subtypes like “psoriasis vulgaris” (L40.0) and “psoriatic arthritis” (L40.5) for better accuracy.
  
• Excision Codes: New CPT codes for skin excisions will be based on lesion size, e.g., 11400 for excision of lesions ≤0.5 cm and 11402 for those between 0.6 cm and 1.0 cm.

Cost of Non-Compliance

Non-compliance with billing codes can lead to significant financial losses for dermatology practices, including delayed payments, rejected claims, and penalties.

Delayed Payments: Incorrect claims may lead to prolonged reimbursement cycles.

Rejected Claims: Non-compliance results in claims being rejected and needing resubmission, which delays revenue.

Penalties: Non-compliant practices may face fines or audits, further impacting finances.

Insurance Carrier Variability in Dermatology Billing

This is a variation in the policies, rates and requirements for dermatology procedures by different insurance carriers. These variabilities can lead to difficulty in payment for the same services. 

Key Variability Factors:

• Rates: Insurance companies offer different reimbursement rates for the same procedure.
• Cosmetic vs. Medically Necessary: Some procedures like Botox may only be covered if deemed medically necessary.
• Pre-Authorization: Some insurers require pre-authorization for specific dermatology services.

Final Thought:

In the healthcare industry, dermatology billing is very crucial due to the complex procedures involved. It is very important for a healthcare provider to stay ahead of the policies and regulatory changes. This ensures efficiency and accuracy and reduces the chances of claim denials and reimbursement delays. CloudRCM can help you with these complexities while ensuring accuracy and efficiency. 

Maximize Your Revenue with Accurate Dermatology Billing

Don’t let billing errors impact your practice’s bottom line. Stay ahead of the latest updates and ensure accurate claims submissions with CloudRCM’s expert support. Let us handle your billing complexities so you can focus on delivering quality care to more patients and boosting your revenue.

Contact us today  (224) 231-6880 to improve your dermatology billing!

Source:
U.S. healthcare spending to reach $6.2T by 2028—accurate dermatology billing is key.

FAQs

What are the new CPT codes for skin biopsies in 2025?

In 2025, CPT codes for skin biopsies will be revised, with different codes for excision based on lesion size, such as 11400 for lesions ≤0.5 cm and 11402 for those between 0.6 and 1.0 cm.

How do the updated ICD-10 codes affect dermatology billing?

The new ICD-10 codes for conditions like psoriasis now specify subtypes, allowing for more accurate diagnosis and billing, ensuring proper reimbursement.

What changes are there for Mohs surgery documentation requirements?

Mohs surgery documentation now requires more detailed information, including layers of skin excised and pathology reports, to avoid claim rejections.

Why is modifier usage under increased scrutiny in 2025?

Modifiers like 51 (Multiple Procedures) will face stricter review to prevent inaccurate or unnecessary usage, which can lead to claim denials or audits.