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Keloid care and insurers – will they or won’t they pay?


Insurers tend to think of keloids as a cosmetic issue so they have a wide range of standards covering reimbursement for care and treatments. Practitioners must fully document the medical necessity of the care they provide and then code the conditions and treatments correctly to maximize their chance for reimbursement.

Navigating payment for keloid treatment can be tricky because every insurance company has its own policy.

Dr. Siegel“No one wants to pay,” says Daniel M. Siegel, M.D., a clinical professor of dermatology at the State University of New York Health Science Center at Brooklyn. “If the insurer can avoid paying, that is what it prefers to do.”

Compensation varies by company

On the bright side, Medicare has fairly straightforward policies.

“If the scarring is causing disfigurement that interferes with activities of daily living or if the scarring is part of reconstruction following an accident or injury, treatment is usually covered,” Dr. Siegel tells Dermatology Times. “But I would only try to bill treatment that is appropriate and medically necessary.”

The rest of the insurance spectrum varies widely.

“Some companies will go out of their way not to pay,” says Dr. Siegel, in advance of his presentation on the documentation and reporting of keloid therapy in the United States at the lst International Keloid Symposium in September in New York.

Anthem, for example, bases its reimbursement on published medical articles that are at least two years old. “However, there are a total of 218 new articles on keloid therapy between the last article they cite and the last review date before publication of their payment guideline,” Dr. Siegel says. “This includes 40 reviews and 13 articles on clinical trials, none of which they cite. It is unfortunate that Anthem and other insurers are not using the most currently available data.”

Unlike breast cancer reconstruction, which insurers tend to cover broadly, keloids are much less common and, therefore, there is no mass outcry if coverage is lacking.

“Insurers may tend to look at keloids as cosmetic surgery as opposed to a medical necessity,” Dr. Siegel notes. “Also, if insurers can delay payment long enough, the hope is that members will switch to another insurer, so it becomes another company’s problem; in other words, kick the can.”

To increase the likelihood of keloid compensation, Dr. Siegel recommends accurately documenting patient medical-necessity criteria.

“Take lots of pictures,” he says. “If someone has a functional disability, such as a keloid that limits range of movement, take photographs that show the patient is unable to turn his neck a certain way or flex his elbow. Documentation is critical.”

An advance beneficiary notice (ABN) of noncoverage is also useful. “If a patient wants something done, but it may not be covered, you can always have them sign a form where they agree to pay if insurance does not,” Dr. Siegel says.

Medicare is the only insurer that has a particular ABN that must be used. Furthermore, Medicare does not require prior authorization, while other insurers may.

NEXT: Reimbursement for keloid treatment


Correct coding

Dr. Siegel points out that neither the ICD 9 nor the ICD 10 codes separate keloids and hypertrophic scars. “However, the ICD 9 codes are now dead, so clinicians must use the ICD 10 codes,” he says. “But these codes are not that valuable.”

The L91.0 code used for keloids and hypertrophic scars probably represents the best chance for reimbursement, according to Dr. Siegel. “The L73.0 code for acne keloid may or may not be covered,” he says. Likewise, L90.5 for the general conditions of fibrosis might not be reimbursable.

“Obviously, all of these codes have created a lot of frustration and confusion,” Dr. Siegel observes.

If a claim is denied, there is usually a reason provided for denial. “You can try to challenge a claim, but if the insurer’s policy states that it does not pay for keloids, there is little you can do,” Dr. Siegel says. “However, if the policy states it will only deny claims that are not medically necessary and you have the data to challenge it, then by all means do so.”

For medical management of keloids, intralesional chemotherapy injections are often covered.

“Remember, though, that insurance compensates by the number of injections, not the size of the lesion,” Dr. Siegel says. “The keloid may be the size of Manhattan, but it is still considered a single lesion for billing purposes.”

Radiation therapy is an area of confusion because of different messages being conveyed. For example, according to a device manufacturer Dr. Siegel spoke with while preparing his presentation, dermatologists who combine surgical keloid removal with two of three treatments of superficial radiation therapy (SRT) are charging about $3,000, as opposed to plastic surgeons who receive between $12,000 and $15,000 for the same combined therapy.

“This higher reimbursement for plastics may be due to cash payments by the patient,” Dr. Siegel says. “Why this premium? Because plastic surgeons often charge what they can.”

Regarding CPT for radiation therapy, there are a number of changes for 2016 that clarify coding. “The 77401 code for skin lesion radiation pays only about $30, so you may not want to use it,” Dr. Siegel says. “If the patient’s insurance does not cover the service, you can charge the patient what you wish.”

Overall, Dr. Siegel believes the compensation landscape is highly unpredictable.

“We are in an era of alternative payment models,” he says. “We do not know where it is all going."

Disclosures: Dr. Siegel reports no relevant financial conflicts.

References: None

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