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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
  
  The rules state that:  
A 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: 
1. 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 
2. The lesion has physical evidence of inflammation, e.g., purulence, edema, erythema; or 
3. The lesion obstructs an orifice; or 
4. The lesion clinically restricts vision; or 
5. There is clinical uncertainty as to the likely diagnosis, particularly where malignancy is a realistic 
consideration based on the lesion appearance; or 
6. A prior biopsy suggests or is indicative of lesion malignancy; or 
7. The lesion is in an anatomical region subject to recurrent trauma, and there is documentation of 
such trauma. 
8. 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: 
a. Periocular warts associated with chronic recurrent conjunctivitis thought secondary to 
lesion virus shedding. 
b. Warts showing evidence of spread from one body area to another, particularly in 
immunosuppressed patients. 
c. Lesions are condyloma acuminata or molluscum contagiosum. 
d. 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. 
B. 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 patients 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 patients 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. 
You can find this rule at the Medicare Local Coverage Determination (LCD) L35498: Removal of Benign Skin Lesions. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.