Pathology/Lab Coding Alert

1. Use Diagnosis to Determine Tissue Type

The surgical note should provide some key information you need: What tissue was the surgeon going after? "The note might say, 'excisional skin biopsy,' 'lipoma,' or 'removal of soft tissue mass,' and you should use that information to narrow your code choice," says Elizabeth Sheppard, HT (ASCP), manager of anatomic pathology at Wake Forest University Baptist Medical Center in Winston Salem, N.C.

Tactic: You can use the narrative diagnosis or ICD-9 code to determine where the excised lesion originated. "For example, a squamous cell carcinoma may extend into subcutaneous tissue, but because squamous cell arises in the epithelium, you know that this is a skin specimen," says Pamela J. Biffle, CPC, CCS-P, ACS-DE, director of operations CustomCoding Books in the Dallas/Fort Worth area. The pathology report should confirm the specimen type.

ICD-9 codes for skin specimens might include 172.x (Malignant melanoma of skin), 173.x (Other malignant neoplasm of skin), and 216.x (Benign neoplasm of skin). You'd see different codes for soft tissue specimens, such as 171.x (Malignant neoplasm of connective and other soft tissue), 214.x (Lipoma), or 215.x (Other benign neoplasm of connective and other soft tissue).

2. Don't Let Size Fool You

No matter how large or complex the specimen, skin is skin. "Even if a melanoma specimen extends into subcutaneous tissue, entails multiple cassettes, and requires margin evaluation, you still have to report 88305, ... skin, other than cyst/tag/debridement/plastic repair," Sheppard says. "You can't report 88307 for a skin specimen and call it a soft tissue mass just because it is a large, complex specimen that involves some soft tissue."

3. Consider the Pathologist's Work

Even though size doesn't matter, you still have to consider the pathologist's work. "The complexity of the pathologist's exam can distinguish between codes, such as the difference between a soft tissue biopsy/simple excision (88307) that doesn't require margin exam, and a soft tissue tumor extensive resection (88309) that does require margin exam," Sheppard says.

And although you can't upcode complex skin specimens from 88305 to 88307, you can differentiate pricing for the same code if you are consistent, Sheppard says.

Example: Your practice could designate two charge levels for 88305 dermatology specimens,  categorizing specimens either as "skin biopsy" or "excisional skin resection." "Although all payers may not accept the charges, you can differentiate these rates as long as you treat all cases consistently, whether inpatient or outpatient, and regardless of insurance," Sheppard says.