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.

  1. 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:  

      1. Periocular warts associated with chronic recurrent conjunctivitis thought secondary to lesion virus shedding.
      2. Warts showing evidence of spread from one body area to another, particularly in immunosuppressed patients.
      3. Lesions are condyloma acuminata or molluscum contagiosum.
      4. 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.

  2. 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.

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