Dermatology Billing: Biopsies, Lesion Removal & Cosmetic Procedures

Dermatology Billing: Biopsies, Lesion Removal & Cosmetic Procedures

Dermatology billing often presents unique challenges. With overlapping procedures, varying payer policies, and blurred lines between cosmetic and medically necessary treatments, billing teams and dermatologists frequently face denials or underpayments. In 2025, ensuring the correct use of CPT codes, payer-specific documentation, and accurate differentiation between covered and non-covered services is essential for both compliance and optimized revenue.
This guide focuses on billing strategies for three core categories of dermatologic care: biopsies, lesion removal, and cosmetic procedures. Whether you’re managing a solo dermatology practice or overseeing billing operations for a larger center, understanding how to document and code each service appropriately can make a significant difference in your reimbursement outcomes.

Billing for Skin Biopsies

Skin biopsies are routine in dermatology, yet they often result in billing confusion due to differences in technique and documentation requirements. The type of biopsy performed determines which CPT code should be used. The three main types include shave, punch, and incisional biopsies. Each has its own set of CPT codes based on the number of lesions sampled.
For instance, a shave biopsy is billed using CPT 11102 for the first lesion and 11103 for each additional lesion. Punch biopsies use CPT 11104 and 11105, while incisional biopsies are billed under CPT 11106 and 11107. Selecting the appropriate code is crucial, as it depends on both the specific technique used and the number of lesions treated. If more than one biopsy method is used during the same encounter, multiple codes may be billed, provided the documentation supports it and appropriate modifiers, such as 59, are applied.

READ HERE: A Complete Guide to the Medical Billing Process for Healthcare Providers

Billing for Skin Biopsies

In addition to selecting the right code, thorough documentation is critical. Your clinical notes should identify the location and size of the lesion, the biopsy method used, the rationale for performing the biopsy, and any clinical symptoms observed, such as itching, bleeding, or pain. If pathology is performed, that service is billed separately and must be supported with appropriate documentation and coding.

Lesion Removal – Medical vs. Cosmetic

Lesion removals can be covered by insurance, but only when deemed medically necessary. This is a frequent point of confusion, as many patients seek lesion removal for cosmetic reasons. To bill these procedures correctly, practices must distinguish between benign and malignant lesions and document any symptoms that justify medical necessity.

When excising lesions, the correct CPT code depends on several factors: whether the lesion is benign or malignant, its size in centimeters, and its anatomical location. Benign lesion excisions fall under CPT codes 11400 to 11446, while malignant lesion excisions are billed under codes 11600 to 11646. For example, CPT 11402 applies to a benign lesion between 1.1 to 2.0 cm on the trunk, arms, or legs.

If the lesion is destroyed rather than excised, different codes apply. Destruction may be performed using cryotherapy, electrosurgery, or laser. These procedures are reported using codes in the 17000 and 17110 ranges.

Lesion Removal – Medical vs. Cosmetic

Common CPT codes for lesion destruction include:

CPT Code Description
1700 First premalignant lesion (e.g., actinic keratosis)
17003-17004 Each additional premalignant lesion(s)
17110 Destruction of up to 14 benign lesions
17111 Destruction of 15 or more benign lesions
Your notes must clearly state the number of lesions, their types, and their locations. The method of removal or destruction should also be documented, along with the medical justification for the procedure.

Cosmetic Procedures – Self-Pay Requirements

Cosmetic dermatology is not covered by insurance, regardless of how routine the procedure might seem. Treatments such as Botox for wrinkle reduction, laser skin resurfacing, chemical peels, and mole removals performed solely for aesthetic purposes are considered elective and must be handled as self-pay services.

Practices should never submit cosmetic procedures to insurance unless there is clear documentation of medical necessity and prior authorization when required. In cases where the same procedure could be either cosmetic or medical, such as mole removal, the intent and documentation must support the medical purpose of the treatment.

To avoid disputes, always obtain a signed cosmetic services acknowledgment from the patient before performing any elective procedure. This form should include the name of the procedure, cost, and a clear statement that the service is not covered by insurance and will be billed directly to the patient. This documentation helps protect your practice in the event of audits or future payment disputes.
Cosmetic Procedures – Self-Pay Requirements

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The Importance of Medical Necessity Documentation

Regardless of the procedure, strong documentation is key to ensuring that claims are paid and not denied for lack of medical necessity. Dermatology procedures are commonly audited, especially when the same CPT codes are used across multiple encounters or when cosmetic and medical lines are blurred.

For biopsies and lesion removal, your chart should explain why the procedure was needed. This includes the clinical findings, patient complaints, any prior treatments or changes in the lesion, and the physician’s reasoning for proceeding with the procedure.

For cryotherapy or destructive methods, include details such as:
  • Type of lesion (e.g., wart, actinic keratosis, seborrheic keratosis)
  • Number of lesions treated
  • Method used for destruction
  • Treatment location(s)
  • Reason for choosing destruction over excision
The Importance of Medical Necessity Documentation

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Avoid vague documentation. Use detailed clinical language that aligns with the codes billed and supports the need for the service performed. This protects your revenue and helps withstand scrutiny from both private and public payers.

Final Thoughts

Dermatology billing requires precision, especially when navigating procedures that may be cosmetic or appear routine. Knowing when and how to bill for biopsies, lesion removals, and cosmetic treatments can be the difference between steady cash flow and chronic revenue leakage.
To ensure successful billing:
  • Use CPT codes that reflect the actual technique and complexity of the procedure
  • Document thoroughly to support medical necessity
  • Distinguish clearly between cosmetic and medically necessary services
  • Use self-pay disclosures for all elective treatments
For busy dermatology practices, working with a specialized billing partner like MaxRemind can help you stay compliant, reduce denials, and maximize collections. As payer policies evolve, having the right systems and expertise in place ensures your practice gets paid for the care it delivers.

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FAQs
How do you bill for a skin biopsy in dermatology?

Use CPT codes like 11102 to 11107, depending on the biopsy type (shave, punch, incisional) and the number of lesions sampled. Be sure to include diagnosis codes that support medical necessity, and don’t forget to bill separately for pathology charges if performed.

Is lesion removal covered by insurance?

Yes, but only if it is medically necessary. For example, insurance may cover removal if the lesion is suspicious, painful, or bleeding. Cosmetic removals performed for appearance only are not typically covered. Always document symptoms and include the physician’s recommendation.

What CPT codes are used for lesion removal?

Common CPT codes include 11400 to 11446 for excision of benign lesions and 11600 to 11646 for malignant lesions. Coding depends on the lesion’s size and location. Accurate size measurement and clear margin documentation are essential.

Can cosmetic dermatology procedures be billed to insurance

Typically, no. Cosmetic procedures such as Botox for wrinkles, mole removal for appearance, or chemical peels are considered elective services and should be billed as self-pay. Always obtain signed patient acknowledgment in advance.

What’s the difference between billing for excision and destruction of skin lesions?

Excision codes apply when the lesion is surgically removed with margins. Destruction codes, such as those used for cryotherapy or laser treatments, apply when the lesion is destroyed without physical removal. Use CPT codes from the 17000 series or code 17110, depending on the type and number of lesions treated.