Coding & Reimbursement


Accurate coding and documentation is essential for reimbursement for medical services. Coding is intended to transform a physician's verbal descriptions of diseases and procedures into standardized numeric designations, facilitating patient care documentation, and billing.

Currently, the three major coding systems include:

These systems are used by both government and private health care payers for health care reimbursement. They can change frequently and vary by geographic location and payer. Always refer to current versions of these coding guides.

In addition to understanding these coding systems, physicians and staff should know the policies and procedures for their primary payers or contracted health plans. This includes information about patient coverage, anticipated and contracted reimbursement rates, definition of complete claims, claims appeal processes, as well as appropriate contact numbers, email and addresses.

On national average, U.S. Medicare reimbursement (2015) is approximately $5.73 per CPT 95044. Below is an example of what a typical physician administered, T.R.U.E. TEST reimbursement looks like for a new patient.

New Patient E/M Fee
CPT code 99203 (20 min)
Patch Test Allergens $5.73 x 36
CPT Code 95044
Panel Removal and First Reading E/M Fee (48 hrs.)
CPT code 99212 (10 min.)
Second Reading E/M Fee (72 hrs.)
CPT code 99212 (10 min.)
Final E/M and Patient Counseling
CPT code 99214 (25 min.)
Final Reimbursement with 2 Readings $509.40
Final Reimbursement with 1 Reading $465.72

Patch Test Coding

For complete information about coding procedures, physicians are referred to current versions of the American Academy of Dermatology Coding and Documentation Manual and the American Medical Association's CPT and ICD-10-CM guidance manuals.

  • For each patch test(s), use CPT code 95044 (or 95052 for photo patch tests). According to Medicare guidelines, the number of tests (i.e., allergen patches) must be specified. For T.R.U.E. TEST® panels 1.2 and 2.2, and 3.2, the total number of patches is 36. This number (36) is the multiplier used for the 95044 reimbursement fee.

    Note: Medicare and third party payers can have different patch testing policies, including different maximum allowable tests (i.e., 95044) per beneficiary per year. Carefully review any limitations in payer policies that may impact office procedures and patient care.

  • The level of evaluation and management (E/M) service reported should be based on current history, exam and decision-making criteria, and not solely on time spent with the patient. Support E/M service reporting with clear documentation in the medical record(s).
  • Depending on patient care provided, it may be appropriate to bill for a separately identifiable E/M service that occurs on the same day as patch testing. If this is the case, it should be reported using modifier 25, recognized by most payers.
  • The ICD-10-CM codes for diagnoses of allergic contact dermatitis vary. Use appropriate ICD-10-CM codes (including V codes) to identify diagnoses, symptoms, other conditions, problems and complaints.

Codes for Evaluation and Management Services

CPT code History1 Physical exam2 Medical decision process Time (minutes)3
New Patients (i.e., no professional services within previous 3 years)*
99201 Problem-focused Problem-focused Straight forward 10
99202 Expanded problem-focused Expanded problem-focused Straight forward 20
99203 Detailed Detailed Low complexity 30
99204 Comprehensive Comprehensive Moderate complexity 45
99205 Comprehensive Comprehensive High complexity 60
Established Patients
99211 Minimal Minimal Minimal 5
99212 Problem-focused Problem-focused Straight forward 10
99213 Expanded problem-focused Expanded problem-focused Low complexity 15
99214 Detailed Detailed Moderate complexity 25
99215 Comprehensive Comprehensive High complexity 40

Note: If more than one service or procedure is performed on the same day as an E/M use modifier "25."

* Although dermatologists may receive patients by referral, these are usually coded as new patients not consultations. Consultation codes are used when advice is formally requested by another physician currently providing care for that patient, and influences that patient care. Strict criteria, including extensive documentation, must now be met for billing consultation services.

1 Per Medicare, "history" is often defined based on the chief complaint, history of present illness, a review of systems, and any relevant history (e.g., past, family or social).

2 Per Medicare, 1) a "problem-focused" exam means the affected body area or organ system; 2) an "expanded problem focused" exam means the affected body area or organ system and other related systems; 3) a "detailed" exam means a more extensive exam of the affected body area or organ system and other related organ systems and 4) a "comprehensive" exam means an extensive exam of 12 organ systems or complete exam of a single organ system.

3 Per Medicare, the length of time spent with a patient does not primarily control the level of service billed, unless it constitutes more than 50% of the face-to-face time such as when providing counselling or coordinating care.

Dermatologists, physician's assistants, and nurse practitioners should not use 99204, 99205, or 99215, as these codes require extensive documentation for levels of care rarely performed and/or medically necessary.

General Notes

To optimize practice reimbursement, it is important to code patch testing correctly, provide accurate and sufficient documentation, and bill for all services provided. The level of service reported and billed for all patient visits must be justified by medical necessity and supported by appropriate documentation in the patient's medical record. Because coding practices are complex and change frequently, it can be valuable for physicians to implement one or more of the following in their practice:

  • Regular staff instruction about proper coding, documentation and billing procedures.
  • Standardized coding and practice management software that is well documented, such as Ellzey Coding Solutions, Inc.
  • A reference sheet for commonly used allergy and dermatology-based codes for your practice, including CPT 95044 and ICD-10-CM 692 examples.
  • The use of an independent, audited coding and billing agency familiar with local federal and private payers.

In today's health care, accurate coding is considered the ethical and legal responsibility of the physician and their practice. Recurring procedural errors can lead to reimbursement delays, unpaid claims, loss of revenue, and even disciplinary action and legal sanctions.

Claim Denials and Appeals

Claim or coverage denials are best avoided by being as proactive as possible. Understanding the plans and obtaining pre-authorization is likely to reduce unwanted and unexpected denials.

However, claim denials do occur and the American Medical Association has reported that a significant proportion of physical revenue can be associated with underpaid or denied claims.

Moreover, the majority of claim denials or underpayment can arise from errors attributable to care providers and payers. Therefore, it is important that physicians and staff learn to analyze rejected claims, manage claim denials effectively, and implement appeal strategies.

Tips for improving claims management overall:

  • Understand the claims appeal process applicable to your local, regional and national payers.
  • Review claims before submission. Use a reference sheet to cross-check for common coding errors and proper payer procedures.
  • Regularly evaluate payers' explanation of benefits (EOB) for potential errors or underpayments.
  • Record claim follow-up including a summary of payer information, source(s) and reasons for denial, as well as any actions taken.
  • Using standardized professional claims appeal letters may facilitate the process, and payers may be more likely to respond quickly. Clearly state the rationale for the appeal, date of service, patient information, and appropriate documentation for all patient care provided.
  • For payers unfamiliar with T.R.U.E. TEST®, it may be helpful to note that it is the only allergen patch test approved for marketing and sale in the United States

Disclaimer: The brief information included here about coding and reimbursement is for educational purposes only. It should not replace current Medicare or specific payer policies, state or federal regulations, medico-legal practice guidelines, or consultation with coding experts or attorneys. Users should always consult payers for final guidance and about changes in coding and reimbursement practices. SmartPractice® and SmartPractice Denmark® assume no liability from the use of this manual.

For more details on patch test reimbursement, contact our customer service department at 1-800-878-3837.

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