Coding dilemmas

October 1, 2006

Q A new patient who just moved into town was seen for a dark mole on the chin. After taking the appropriate history and doing an exam, the dermatologist decided to perform a diagnostic biopsy. The patient also indicated she had been treated for acne in the past and asked for a prescription refill. Would the diagnosis for the new patient E/M visit be the neoplasm of undetermined nature (e.g. 238.2) or should I attach the acne diagnosis? I remember reading that the primary diagnosis is the reason the patient came into the office and that should be used as the diagnosis for the office visit. However, many times carriers don't pay if there is only one diagnosis for both the procedure and the E/M visit. Would I be committing fraud if I used the acne diagnosis for the office visit?

A Dear Prefers: You are correct in that one should code the primary diagnosis to the E/M visit. That's how it must be done in hospitals based on DRG (Diagnostic Related Groups); so the primary diagnosis is very important. In the outpatient setting, the rules of proper ICD-9-CM coding are very relaxed. I have never been involved in a carrier audit where there has been any concern about the primary versus secondary, tertiary, etc. diagnosis. The only concern of the carriers is that whatever diagnosis is attached to the CPT code is a covered diagnosis and is substantiated in the medical chart note. They could care less if the patient was seen for one thing, and the doctor diagnosed two, three, four, five or more different problems and just picked one of those diagnoses for the E/M visit.

I agree with you that many carriers ask for notes or deny a claim where both the E/M visit and the procedure share the same diagnosis, although this is less of a problem for new patients. Such denials are more common for established patient visits.

Q A patient was referred to us with a squamous cell carcinoma diagnosed and treated by another physician in our area. The pathology report showed that the margins were dirty and that further treatment was recommended. The patient was therefore referred to our office. We did a wide excision based on the recommendations of the pathologist's report. We, of course, sent the tissue to the pathologist for further review to assure that all margins were clear. The final pathology report showed clear margins. The final diagnosis on the pathology report was scar tissue and residual inflammation. No evidence of skin cancer.

So we are confused on how to bill for the excision. Would this be coded as a benign lesion or a malignant lesion? If it is benign, then I won't get paid because none of the carriers will pay for the diagnosis of a scar. I did not get a waiver signed from the patient because I did not anticipate this scenario. If the correct billing is to bill for a malignant lesion, how could I support that with a path report that shows only scar and inflammation? I feel that I am between a rock and a hard spot.

A Dear Scarred (or Scared): Your answer is straightforward and simple. You bill excision of a malignant lesion based on the pathology report of the first excision that showed dirty margins. If you are ever audited, you would send that path report along with the report, not the final pathology report that showed only scarring.

Your scenario is not uncommon. It happens all the time. A dermatologist will do a biopsy showing a skin cancer. They schedule the patient for an excision, bill out a malignant excision and diagnosis, and the pathology report comes back with no tumor seen. That does not mitigate what you did. You proceeded based on the recommendations of the dermatopathologist that there still were skin cancer cells in the margins. I have never had a carrier refute this logic upon audit.