Efficient dermatology billing is vital to a practice’s financial health, yet it’s often complicated by payer rule changes, denied claims, and time-consuming prior authorizations. Without the right systems and support, even minor missteps can lead to lost revenue and delayed payments. In this article, we explore the top dermatology billing challenges and the solutions practices can use to stay ahead.
* * *
Dermatology billing might not be glamorous, but it’s critical to a practice’s financial success. Between navigating evolving payer rules, handling prior authorizations, and chasing down denials, today’s dermatology practices face billing headaches that can cost serious time and money. Whether you’re a solo dermatologist or part of a multi-location practice, billing inefficiencies can impact your revenue cycle and patient experience alike.
Let’s walk through some of the most common challenges dermatology practices currently face and, more importantly, how to solve them.
1. Unpredictable payer policies and rule changes
One of the most frustrating parts of dermatology billing is dealing with payer rule changes. Medical necessity requirements, modifier use, coverage limits — these and more can all change with little notice. Even something as simple as how a skin biopsy is coded can lead to denied claims if a payer’s policy shifts.
As another example, take a procedure like destruction of premalignant lesions (CPT 17000). It may require medical necessity documentation for some payers, while others focus on frequency limits. If your revenue cycle team isn’t aware of the latest changes, clean claims can quickly turn into denials.
The key here is vigilance. Practices need staff or billing partners who stay ahead of payer policy updates, access or offer routine coding education, and monitor frequent denials to spot trends early. If your billing system isn’t automatically flagging new edits or compliance alerts, you’re leaving yourself open to revenue loss.
Tip: Bookmark payers’ medical policy pages and consider tools like CMS Local Coverage Determinations (LCDs) to stay informed on what’s changing.
2. Incomplete or inaccurate documentation
Dermatology procedures can be complex, and so are the documentation requirements that go with them. If your notes do not clearly support the diagnosis or medical necessity, you’re almost guaranteed a denial.
Let’s revisit shave biopsies (CPT 11300–11313) as an example. If the documentation doesn’t specify depth or dimension, payers may downcode or deny the claim entirely. It’s not just about writing more — it’s about writing smarter. Clear, structured documentation that aligns with CPT and ICD-10 coding is essential. Templates can help, but they can also hurt if overused or too generic. Providers must document the “why” behind the procedure and ensure everything — from lesion size to location — is noted precisely.
If you’re seeing repeat denials for the same procedures, the first place to look is likely your chart notes.
3. Denied and rejected dermatology claims
Claim denials are inevitable. But frequent denials often point to underlying problems with coding, documentation, or front-end processes like insurance verification.
In dermatology, common culprits include missing modifiers (especially -25 and -59), mismatched diagnoses and procedures, or lack of prior authorization for biologics or laser treatments.
Timely denial management isn’t just about reworking the claim. It’s about understanding why it was denied and making changes upstream to prevent it from happening again. Smart dermatology billing solutions use analytics to spot patterns, so if a certain payer is consistently denying a procedure, you can proactively adjust your workflow.
4. Prior authorization delays
If your practice handles high volumes of procedures that require prior authorization — think phototherapy, Mohs surgery, or injectables — you know how time-consuming and vague the process can be.
The challenge isn’t just submitting the request. It’s tracking it, following up, and documenting everything. Many payers now require electronic submissions and specific attachments, which can vary by plan.
Practices that thrive in this area usually have a dedicated authorization specialist or outsource this function to a dermatology-savvy billing partner. The faster you can secure approvals, the fewer appointments you’ll need to reschedule or delay.
5. Coding complexity in dermatology
From benign lesion removals to complex reconstructive surgery, dermatology has one of the broadest coding landscapes in medicine. Coding errors — especially bundling issues or improper use of E/M codes — can lead to revenue loss or audits.
Coding audits and ongoing education are essential. A well-trained coding team that understands the nuances of dermatology can make the difference between a paid claim and a denied one.
For example, many practices underuse modifier -59 or misuse modifier -25, both of which can cause denials when billing for multiple services on the same day. Accurate coding isn’t just a compliance issue; it’s a financial one.
6. Poor integration between EHR and billing systems
If your EHR and billing software don’t communicate well, you’re likely dealing with duplicate data entry, billing delays, and/or inconsistent documentation.
For dermatology practices, where visit volume is high and procedures are frequent, any inefficiency in workflow can add up quickly. A good dermatology billing solution will integrate seamlessly with your existing EHR and pull accurate, current information into the claim process.
Look for systems that support real-time eligibility checks, coding prompts based on documentation, and integrated prior authorization workflows. Small automations like these can make a big difference in reducing denials and improving cash flow.
7. Patient collections and financial communication
With the rise of high-deductible health plans, patients are shouldering more of the cost of their care. Yet many dermatology practices still struggle to collect balances or clearly explain costs up front.
The result? Outstanding balances, frustrated patients, and a strained front office team, among other challenges.
Solving this usually means combining technology and training. Offer online payment portals, text-based billing reminders, and clear, easy-to-understand estimates. Just as importantly, make sure your staff feels confident discussing financial responsibility with patients. Dermatology billing solutions that include patient engagement tools and experts can boost both collections, satisfaction, and online reviews.
8. Staff turnover and in-house billing gaps
In-house billing teams are valuable, but turnover can hit hard. It’s not easy to replace a biller with years of dermatology-specific knowledge, especially when claim cycles are already underway.
Outsourcing to a specialized partner can help reduce that risk. Companies that focus on dermatology billing solutions not only bring expertise, but also consistency and coverage. Your billing won’t stop just because someone’s out sick, on vacation, or something more permanent.
Finding the Right Dermatology Billing Solutions
No matter which challenges resonate with your practice, the solution almost always involves the same ingredients: transparency, automation, training, and expertise. That’s why dermatology billing solutions aren’t one-size-fits-all. The best partners take time to understand your practice’s unique mix of services, patient population, and payer contracts.
Ready to Take the Pain Out of Dermatology Billing?
At PGM Billing, we specialize in dermatology billing solutions that help practices reduce denials, improve collections, and stay ahead of coding and compliance changes. Whether you need full revenue cycle management or targeted support, our team is ready to help.
Let’s talk about how PGM can help your dermatology practice thrive. Contact us today to schedule a free consultation.