LCD L35498

Coverage Guidance

CMS Pub.100-02 Medicare Benefit Policy Manual, Chapter 16 - General Exclusions From Coverage, Section §120 - Cosmetic Surgery

CMS Pub. 100-03 Medicare National Coverage Determinations Manual-Chapter 1, Coverage Determinations, Part 4, Section 250.4 - Treatment of Actinic Keratosis

CMS Pub.100-04 Medicare Claims Processing Manual, Ch. 23 Fee Schedule Administration and Coding Requirements, Section 10.1-10.6 - Reporting ICD Diagnosis and Procedure Codes

Title XVIII of the Social Security Act, section 1862 (a)(1)(A). This section allows coverage and payment of those services that are considered to be medically reasonable and necessary.

CMS Transmittal No, 863, effective date October 3, 2018, Change Request 10901 Local Coverage Determinations (LCDs) Implementation date January 8, 2019.

Indications and Limitations of Coverage

This policy addresses the Medicare coverage for the removal of benign skin lesions, such as seborrheic keratoses, sebaceous (epidermoid) cysts and skin tags. Benign skin lesions are common in the elderly and are frequently removed at the patient's request to improve appearance. Removal of certain benign skin lesions that does not pose a threat to health or function, are considered cosmetic and as such are not covered by the Medicare program.

• Medical Indications

There may be instances in which the removal of non-malignant skin lesions is medically appropriate. Medicare will, therefore, consider their removal as medically necessary and not cosmetic, if one or more of the following conditions are present and clearly documented in the medical record:

• The lesion has one or more of the following characteristics: bleeding, itching, pain; change in physical appearance (reddening or pigmentary change), recent enlargement, increase in number; or

• The lesion has physical evidence of inflammation, e.g., purulence, edema, erythema; or

• The lesion obstructs an orifice; or

• The lesion clinically restricts vision; or

• There is clinical uncertainty as to the likely diagnosis, particularly where malignancy is a realistic consideration based on the lesion appearance; or

• A prior biopsy suggests or is indicative of lesion malignancy; or

• The lesion is in an anatomical region subject to recurrent trauma, and there is documentation of such trauma.

• Wart removals will be covered under the guidelines listed above. In addition, wart destruction will be covered when any one of the following clinical circumstances is present:

• Periocular warts associated with chronic recurrent conjunctivitis thought secondary to lesion virus shedding.

• Warts showing evidence of spread from one body area to another, particularly in immunosuppressed patients.

• Lesions are condyloma acuminata or molluscum contagiosum.

• Cervical dysplasia or pregnancy is associated with genital warts.

An E&M service to determine a diagnosis of benign skin lesion(s) may be allowed (paid), even in the event the subsequent lesion(s) removal is determined to be cosmetic.

• Repair (Closure) With Excision of Benign Lesions

Payment for the excision of benign lesions of skin includes payment for simple repairs. Separate payment may be made for medically necessary layered closures, adjacent tissue transfers, flaps and grafts.

Limitations:

Medicare will not pay for a separate E & M service on the same day as a dermatologic service unless a documented significant and separately identifiable medical service is rendered. The service must be fully and clearly documented in the patient’s medical record and a modifier 25 should be used.

Medicare will not pay for a separate E & M service by the operating physician during the global period unless the service is for a medical problem unrelated to the surgical procedure. The service must be fully and clearly documented in the patient’s medical record.

If the beneficiary wishes one or more of these benign asymptomatic lesions removed for cosmetic purposes, the beneficiary becomes liable for the service rendered. The physician has the responsibility to notify the patient in advance that Medicare will not cover cosmetic dermatological surgery and that the beneficiary will be liable for the cost of the service. It is strongly advised that the beneficiary, by his or her signature, accept responsibility for payment. Charges should be clearly stated as well.

The type of removal is at the discretion of the treating physician and the appropriateness of the technique used will not be a factor in deciding if a lesion merits removal. However, a benign lesion excision must have medical record documentation as to why an excisional removal, other than for cosmetic purposes, was the surgical procedure of choice.

Excision is defined as full-thickness (through the dermis) removal of a lesion, including margins, and includes simple (non-layered) closure when performed. Each benign lesion excised should be reported separately. Code selection is determined by measuring the greatest clinical diameter of the apparent lesion plus that margin required for complete excision (lesion diameter plus the narrowest margins required equals the excised diameter). The margins refer to the narrowest margin required to adequately excise the lesion, based on the physician's judgment. The measurement of lesion plus margin is made prior to excision.

References to "physicians" throughout this policy include non-physicians, such as nurse practitioners, clinical nurse specialists and physician assistants.

Summary of Evidence

N/A

Analysis of Evidence

N/A

Associated Information

Documentation Requirements

• Physicians’ services must be submitted with a diagnosis code to support medical necessity and must be coded to the greatest level of accuracy and highest level of digit completeness.

• Medical records maintained by the physician must clearly document the medical necessity for lesion(s) removal if Medicare is billed for the service. The relevant history and physical finding conforming to the criteria stated in the “Indication and Limitations of Coverage and/or Medical Necessity” section above must be made available to the Contractor on request.

• Surgical Procedures Lesions and Closures:

Operative note(s) for surgical procedures performed in the office location may be contained in the patient’s medical record for the date of service or as a separate report maintained within the patient’s chart. The operative note for the procedure performed must be of significant detail to support the surgical procedure billed. The surgical technique used should be described. Surgical procedures should include the lesion size(s) location(s) and number. Layered closures should include the length recorded in centimeters. Add together the length of multiple closures from all anatomical sites grouped together in the same code descriptor (See the American Medical Associations Physicians’ Current Procedural Terminology, CPT subsection instructions for Removal of Skin Tags, Shaving of Epidermal or Dermal Lesions, Excisions - Benign Lesions, Repairs (Closures) and Destruction.).

• The decision to submit a specimen for pathological interpretation will be independent of the decision to remove or not remove the lesion. It is assumed, however, that the pathology description and tissue diagnosis will be part of the medical record if a specimen is submitted to pathology.

• A medical record statement of “irritated skin lesion” is insufficient justification for lesion removal when solely used to reference a patient’s complaint or a physician’s physical findings. Similarly, inflamed seborrheic keratosis, is insufficient to justify lesion removal without medical documentation of the patient’s symptoms and physical findings.

The type of removal is at the discretion of the treating physician and the appropriateness of the technique used will not be a factor in deciding if a lesion merits removal. However, a benign lesion excision must have medical record documentation as to why an excisional removal, other than for cosmetic purposes, was the surgical procedure of choice.

The decision to submit a specimen for pathologic interpretation will be independent of the decision to remove or not remove the lesion. It is assumed, however, that a tissue diagnosis will be part of the medical record when an ultimately benign lesion is removed based on physician uncertainty as to the final clinical diagnosis.

Bibliography

Benign skin lesions. Medscape.com. Published January 4, 2022. Accessed September 14, 2023. https://emedicine.medscape.com/article/1294801-overview

Mulhem E, Pinelis S. Treatment of nongenital cutaneous warts. Am Fam Physician. 2011;84(3):288-293.

Laser treatment of benign pigmented lesions. Medscape.com. Published November 10, 2022. Accessed September 14, 2023. https://emedicine.medscape.com/article/1120359-overview