Every year, new billing and coding changes shake up the way dermatology practices operate, bringing opportunities for increased revenue, others adding hurdles to reimbursement. The 2025 updates are no different, with Medicare reimbursement cuts, tighter Modifier 25 policies, and evolving telehealth rules affecting how dermatologists bill and get paid.
Understanding these updates now gives your practice a competitive edge. With the right billing strategies, you can maximize reimbursements, avoid costly denials, and ensure compliance with new regulations before they take full effect. Let’s break down what’s changing and how your practice can stay ahead.
Medicare Physician Fee Schedule (PFS) Cuts: How They Impact Reimbursement
The 2025 Medicare Physician Fee Schedule (PFS) includes a 2.83% reduction in the conversion factor, lowering it from $33.29 to $32.35 per RVU. While this may seem like a minor adjustment, the cumulative effect across biopsies, excisions, office visits, and other common dermatology procedures could result in substantial revenue losses over time.
How to Offset the Impact
- Optimize coding accuracy – Ensure all billable services are properly documented and coded correctly to capture full reimbursement.
- Negotiate better payer contracts – Private insurers often adjust their fee schedules based on Medicare’s changes. Reviewing and negotiating contracts with commercial payers can help mitigate losses.
- Diversify revenue streams – Consider adding self-pay services, such as cosmetic dermatology procedures, which are not subject to Medicare reimbursement cuts.
- Reduce claim denials – Implementing a proactive billing strategy, including claims
Medicare’s fee schedule doesn’t just impact practices that rely on government reimbursements—it also sets the tone for private insurers, many of whom adjust their own rates and policies based on Medicare’s updates. A reduction in Medicare’s conversion factor, for example, can trickle down to commercial payers, leading to lower reimbursements across the board.
For dermatology practices, this means that staying ahead of Medicare changes isn’t enough—it’s equally important to monitor how private insurers respond. Some carriers may adopt Medicare’s adjustments outright, while others implement payer-specific policies that further restrict reimbursements or increase claim denials.
By proactively reviewing contract terms, reimbursement trends, and policy updates from major private payers, practices can identify potential revenue risks early and take steps to mitigate financial losses—whether by renegotiating contracts, adjusting coding strategies, or exploring alternative revenue streams.
E/M Documentation Changes: Less Paperwork, More Focus on Medical Decision-Making
CMS is making it easier for physicians to focus on patient care rather than paperwork by simplifying documentation requirements for Evaluation & Management (E/M) services. Instead of relying on rigid history and physical exam elements, the emphasis is now on medical decision-making (MDM)—a shift that better reflects the complexity of patient care.
What This Means for Dermatology Practices
- Less redundant charting – Providers can spend more time with patients instead of checking off unnecessary documentation boxes.
- Greater focus on MDM – The level of service billed will now better align with the complexity of a patient’s condition and the decisions made during the visit.
- Lighter administrative workload – With fewer documentation requirements, physicians and staff can work more efficiently without sacrificing compliance.
By adapting to these changes, dermatology practices can improve efficiency, reduce audit risk, and ensure they’re properly reimbursed for the care they provide without getting buried in unnecessary paperwork.
Modifier 25 Scrutiny: Increased Audits and Carrier Restrictions
Modifier 25 is under more scrutiny than ever, and insurance carriers are tightening their policies—leading to more audits and denials when E/M services and procedures are billed together on the same day. Dermatology practices that rely on Modifier 25 must be extra careful to ensure claims are well-documented and justified to avoid revenue loss.
What’s Changing in 2025?
- Anthem and Cigna are ramping up claim reviews and rejecting Modifier 25 usage when documentation doesn’t clearly support a separate E/M service.
- Some private payers are lowering reimbursement when an E/M visit and procedure occur on the same day.
- Audits are increasing, especially for high-volume dermatology practices that frequently report Modifier 25.
How to Protect Your Reimbursement
- Make sure the E/M service is truly separate and necessary – Clearly document why the visit was distinct from the procedure performed.
- Be specific in your chart notes – Avoid vague or templated language. Payers look for detailed explanations of medical necessity.
- Keep up with payer policy changes – Insurers frequently update their rules, so reviewing guidelines regularly can help prevent denials.
Ignoring these shifts could mean more rejected claims, delayed payments, and even audits. Now is the time to tighten documentation practices and ensure your team is billing Modifier 25 correctly to keep revenue flowing.
Telehealth Growth in Dermatology: Expanded Billing Opportunities
Telehealth isn’t just an alternative to in-person visits, it’s a lasting opportunity for dermatology practices to expand access, improve patient care, and boost revenue. With CMS expanding the Medicare Telehealth Services List for 2025, dermatologists now have even more options to offer virtual care while getting reimbursed for their time.
How Dermatologists Can Benefit from Telehealth in 2025
- Virtual follow-ups for chronic conditions – Manage acne, psoriasis, and wound care remotely, freeing up in-office time for higher-complexity cases.
- Post-procedure caregiver training – Use telehealth to educate caregivers on wound care, post-Mohs surgery instructions, and proper medication use—leading to better patient outcomes.
- Audio-only visits for select cases – When video isn’t an option, some patient interactions can still qualify for reimbursement through Medicare-approved audio consultations.
If your practice hasn’t fully embraced telehealth, now is the time. Beyond improving convenience for patients, virtual visits can increase revenue, enhance efficiency, and create new billing opportunities that weren’t possible just a few years ago.
Coding Changes and Compliance Updates for 2025
Several important coding updates have been introduced this year that dermatology practices need to be aware of to ensure accurate billing, compliance, and optimized reimbursement.
1. New Skin Cell Suspension Autograft (SCSA) Codes
Eight new CPT codes have been added for Skin Cell Suspension Autograft (SCSA) procedures, a technique that involves harvesting and preparing a liquid suspension of a patient’s skin cells for autologous grafting. This method offers a promising approach to wound care and skin regeneration, expanding treatment options for dermatologists.
2. Updates to Mohs Micrographic Surgery Codes
Changes have been made to Mohs micrographic surgery coding, particularly for cases involving complex skin cancers. For example, CPT 17312 has been updated to reflect procedures involving additional stages beyond the first, ensuring more precise coding for these intricate surgeries. Proper documentation will be critical to justify the number of stages performed and secure appropriate reimbursement.
3. New Codes for Laser Treatment of Inflammatory Skin Disease
Two new CPT codes, 96920 and 96921, have been introduced for laser treatment of inflammatory skin conditions such as psoriasis and eczema. These codes provide dermatologists with a dedicated way to bill for laser therapy, ensuring these advanced treatments are properly reimbursed.
4. G2211: A Revenue Opportunity and a Compliance Risk
The use of G2211, an add-on code for Evaluation and Management (E/M) services, is receiving greater attention in 2025. Designed to reflect long-term patient care or complex medical decision-making, this code can increase reimbursements for dermatologists treating chronic conditions like psoriasis, eczema, and acne.
However, payers are scrutinizing it more than ever, leading to an increase in denials and audits for improper use. Dermatologists must ensure that documentation clearly supports the complexity and ongoing management of the condition when using G2211.
Want to learn how to bill G2211 correctly and avoid costly denials?
Read our full G2211 breakdown here.
5. New Codes for Digitization of Pathology Slides
As dermatology practices continue to adopt digital pathology, new CPT codes now account for the digitization of glass slides. These codes function as add-ons to existing surgical pathology services, reflecting the shift toward digital workflows and ensuring that practices are reimbursed for the time and resources required for digital imaging and analysis.
Staying updated with these coding changes is essential for dermatologists to maintain compliance, prevent denials, and optimize reimbursement. Reviewing documentation practices and ensuring accurate coding will help practices capture full reimbursement for the services they provide while avoiding costly errors.
How Inga Ellzey Billing Companies Supports Dermatology Practices
Keeping up with billing changes, payer policies, and coding requirements can feel overwhelming for dermatology practices. Without a solid billing strategy, even small errors can lead to claim denials, delayed reimbursements, and lost revenue. That’s where Inga Ellzey Billing Companies comes in.
Why Dermatologists Trust IEBC
- Specialized Dermatology Billing Expertise – With decades of experience, our team understands the nuances of dermatology coding, claims processing, and payer negotiations, helping practices capture every dollar they’re owed.
- Proactive Compliance and Denial Prevention – We stay ahead of CMS regulations and private payer policy updates, ensuring practices remain compliant and avoid preventable claim denials.
- Revenue Cycle Optimization – Our billing specialists focus on reducing denials, improving collections, and streamlining billing workflows, so dermatologists can spend less time on financial concerns and more time on patient care.
- Education and Ongoing Support – We provide training, real-time updates, and industry insights, giving practices the tools they need to navigate billing changes with confidence.
Managing dermatology billing shouldn’t be a constant challenge. With IEBC as your billing partner, your practice can stay compliant, maximize revenue, and focus on delivering exceptional patient care.
Ensuring your dermatology practice stays profitable in 2025 means more than just keeping up with coding changes—it requires a strategic approach to billing, documentation, and payer policies. With Medicare reimbursements shifting, Modifier 25 under tighter scrutiny, and telehealth expanding, now is the time to evaluate your revenue cycle and make adjustments that protect your bottom line.
The right billing strategy can mean the difference between consistent cash flow and unnecessary denials. By staying informed, fine-tuning documentation practices, and working with experts who understand dermatology billing inside and out, your practice can remain financially strong while delivering high-quality patient care.
