Dermatology E/M With Same-Day Procedure

Dermatology sits at the sharpest edge of the same-day E/M question in all of medicine. The specialty performs more minor procedures inside ordinary office visits than any other, appends modifier 25 more often than any other, and has been the subject of a dedicated federal audit of exactly that practice. The rule that governs it is narrow and counter-intuitive: the decision to perform a minor procedure is already paid for inside the procedure, and an E/M billed on top must be shown to be something other than that decision.

This page is about applying that rule in a dermatology clinic. The general mechanics of modifier 25 — what it asserts, what the NCCI Policy Manual requires, how it differs from modifier 59 — are covered in depth in our guide to modifier 25 and the significant, separately identifiable test, and are not repeated here. What follows is the specialty-specific application, the global-period arithmetic that drives it, and what the federal audit actually found.

Verified against the HHS Office of Inspector General audit A-04-21-04083, “Dermatology Providers Generally Met Medicare Requirements for Evaluation and Management Services Performed on Same Day as Minor Surgical Procedures,” announced 22 March 2021 and marked complete 18 November 2025; the National Correct Coding Initiative treatment of global surgical periods as summarised in Cutis (Alam M, “Modifier -25 Use in Dermatology”); and the American Academy of Dermatology Coding Resource Center. CPT codes and descriptions are copyright the American Medical Association.

The Global Period Decides Everything

Every procedure carries a global period, and the length of that period determines which rule applies to a same-day E/M.

Major procedures — 90-day global period. Where an E/M is performed on the same day as a major procedure in order to decide whether to perform that procedure, the E/M is reportable, and it is reported with modifier 57, not modifier 25. Our guides to modifier 57 and the decision for surgery and to how the global period decides which of the two applies cover that branch.

Minor procedures — 0-day and 10-day global periods. This is where nearly all dermatology lives, and the rule is restrictive. As summarised in Cutis from the NCCI guidance: procedures with a 0- or 10-day global period are minor surgical procedures, and “E/M services provided on the same day of service as these procedures are included in the procedure code and cannot be billed separately.” Critically: “If an E/M service is performed on the same day as one of these procedures to decide whether to proceed with the minor surgical procedure, this E/M service cannot be reported separately.”

Broadly, dermatologic biopsies, shave removals, debridements and Mohs micrographic surgery carry 0-day global periods; destructions, excisions and repairs carry 10-day global periods. All of them are minor procedures for this purpose, and all of them absorb the same-day evaluation that led to the procedure.

The Trap: “New Patient” Is Not a Qualifier

The Cutis summary of the NCCI position includes a sentence that overturns a widespread practice habit:

“Additionally, the fact that the patient is new to the physician is not sufficient to allow reporting of an E/M with such a minor procedure.”

A new patient arriving with a suspicious lesion, examined and biopsied at the same visit, does not generate a billable E/M merely because a new-patient history was taken. The history and examination that led to the decision to biopsy are the pre-procedure work already paid for inside the biopsy. Practices that append modifier 25 to every new-patient encounter on the theory that new patients require more work are asserting something the record will not support.

What Does Qualify

The E/M must be, in the OIG’s formulation, “a significant and separately identifiable E/M service that is unrelated to the decision to perform a minor surgical procedure.”

Three fact patterns typically clear that bar:

A separate condition evaluated and managed. The patient attends about a rash on the trunk, which is assessed, diagnosed and treated with a topical regimen; incidentally, an unrelated keratosis on the forearm is destroyed. The rash work is unrelated to the destruction decision.
A substantially broader evaluation than the procedure required. A full-body skin examination in a patient with a history of melanoma, generating surveillance decisions across multiple sites, of which one lesion is biopsied. The surveillance evaluation exceeds and is separable from the single biopsy decision.
A chronic disease managed at the same encounter. A patient with moderate plaque psoriasis on systemic therapy attends for routine review — response assessed, laboratory monitoring reviewed, therapy adjusted — and a suspicious lesion noticed during the review is biopsied.

What does not clear it: examining the lesion, discussing it, obtaining consent, and biopsying it. That is one service.

What the Federal Audit Found

The OIG opened this audit because of a striking utilisation figure. In its own words: “In 2019, about 56 percent of dermatologists’ claims with an E/M service also included minor surgical procedures (such as lesion removals, destructions, and biopsies) on the same day.” The OIG stated that this “may indicate abuse whereby the provider used modifier 25 to bill Medicare for a significant and separately identifiable E/M service when only a minor surgical procedure and related preoperative and postoperative services are supported by the beneficiary’s medical record.”

The findings, published when the audit completed in November 2025, are more reassuring than the premise suggested — and the title reflects it: dermatology providers generally met Medicare requirements.

Dermatologists met Medicare requirements for 90 of the 100 sampled E/M services.
They did not meet requirements for the remaining 10.
On the basis of the sample, OIG estimated Medicare overpayments totalling $62,915,655 to dermatologists for claims with E/M services that did not meet requirements.
The audit produced two recommendations, directed at improving CMS oversight of dermatologist claims for same-day E/M services.

The practical reading for a dermatology practice is that a 10% error rate on a targeted federal sample is high enough to sustain continued scrutiny but not high enough to suggest systemic abuse. The exposure is real and it is concentrated in the minority of encounters where the E/M was, on the record, simply the decision to do the procedure.

Worked Example One: Not Separately Reportable

An established patient telephones about a new scaly patch on the cheek. At the visit the dermatologist takes a focused history of the lesion, examines it and the immediately surrounding skin with dermoscopy, forms an impression of actinic keratosis versus early squamous cell carcinoma, discusses options, obtains consent, and performs a shave biopsy.

Report: the biopsy alone. No E/M, no modifier 25.

Why: every element of the evaluation existed to decide whether and how to biopsy. That is the pre-procedure work bundled into the 0-day global procedure. There is no separately identifiable service.

Worked Example Two: Separately Reportable

An established patient attends for six-monthly surveillance following excision of a melanoma two years ago. The dermatologist performs a full-body skin examination, reviews and documents the status of several previously photographed lesions, palpates regional nodal basins, discusses sun-protective behaviour and surveillance interval, and separately identifies a new inflamed lesion on the shoulder that is biopsied at the same visit.

Report: the biopsy, plus the appropriate office/outpatient E/M code with modifier 25 appended.

Why: the melanoma surveillance evaluation — full-body examination, nodal assessment, comparison against prior documentation, surveillance planning — is significant, separately identifiable and unrelated to the decision to biopsy the shoulder lesion. The note must present it that way: the surveillance findings and decisions should be documented as their own body of work, not as a preamble to the biopsy.

Worked Example Three: The Borderline Case

A patient attends with three lesions. Two are clinically benign seborrhoeic keratoses, examined and reassured about. The third is suspicious and is biopsied.

This one is genuinely close. Examining additional lesions during the same visit is close to routine dermatologic examination, and reassurance about clearly benign lesions involves little medical decision making. Absent something more — a meaningful diagnostic question about the other lesions, a management decision, a broader surveillance context — this is more safely reported as the biopsy alone. The volume of lesions looked at is not itself the test; the test is whether separately identifiable evaluation and management occurred.

Documentation That Survives Review

The structural fix is the same one that works in every specialty facing this question: make the two services separable on the page. A note that reads as a single narrative ending in a procedure will be read as a single service. A note in which the evaluation and management of other problems occupies its own assessment and plan, with its own findings and decisions, and the procedure is documented separately in its own operative note, will be read as two.

Two further points specific to dermatology. First, the reason the E/M was performed should be visible independently of the procedure — ideally the encounter’s stated reason for visit supports it. Second, where a procedure occurs during a post-operative period from an earlier procedure, a different modifier question arises; see our guides to modifier 24 and the defensibly unrelated post-operative E/M and modifier 79 and the unrelated procedure inside a global period.

Frequently Asked Questions

Does modifier 25 go on the E/M or on the procedure?

On the E/M code, always. This is settled in the NCCI Policy Manual and covered in detail in our modifier 25 guide.

Does a second diagnosis code justify the E/M?

No. A different diagnosis is neither required nor sufficient. The NCCI Policy Manual and the Medicare Claims Processing Manual both state that different diagnoses are not required for reporting a same-day E/M, and nothing in either source makes a second diagnosis a qualifying criterion.

What if the patient is new?

New patient status does not qualify the E/M. The NCCI guidance summarised in Cutis addresses this directly: the fact that the patient is new to the physician “is not sufficient to allow reporting of an E/M with such a minor procedure.”

Which modifier applies when the procedure has a 90-day global period?

Modifier 57, not modifier 25, where the E/M was the decision for that surgery. See Modifier 25 vs Modifier 57.

Is the high rate of modifier 25 use in dermatology itself a compliance problem?

Not by itself. The specialty performs an unusual share of minor procedures during evaluation visits, so a high co-occurrence rate is expected. The OIG opened its audit on that utilisation signal and concluded that dermatology providers generally met requirements — 90 of 100 sampled services complied. Utilisation rate is a targeting signal, not a finding.

Should we stop billing same-day E/M to avoid audit risk?

No. Under-reporting genuinely separate work is its own inaccuracy, and the OIG’s own findings do not support blanket avoidance. The correct posture is to apply the unrelated-to-the-decision test honestly on each encounter and document accordingly.