01-071 E&M Dermatology Services Findings of Medical Review

Noridian Healthcare Solutions, LLC (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare & Medicaid Services (CMS), has conducted post-payment review of claims for Medicare Part B Evaluation and Management (E&M) dermatology services billed on dates of service from January 1, 2019, through December 31, 2019. Below are the review results:

Project ID Project Title Error Rate
01-071 E&M Dermatology Services 48%


Evaluation and Management (E&M) is described as a service provided by a physician or other qualified healthcare professional that involves evaluating, diagnosing, and treating patient health and related injuries/illnesses. Modifier 25 is appended to the E&M code to identify a significant and separately identified E&M service for the same patient by the same physician, on the same day of a procedure or other service.

The Office of Inspector General (OIG) noted that, in 2019, approximately 56% of dermatologists’ E&M claims were appended with the modifier 25 indicating a significant and separately identifiable E&M service when only a minor surgical procedure (such as lesion removals, destructions, and biopsies) was performed on the same day. Per the OIG, an E&M service could be billed on the same day of a minor surgical procedure only if the surgeon performs a significant and separately identifiable E&M service that is unrelated to the decision to perform a minor surgical procedure. This may indicate a potential vulnerability where 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.

Reason for Review

CMS tasked Noridian, as the SMRC, to perform data analysis and conduct medical record review of E&M dermatology claims that also include a minor surgical procedure. The SMRC conducted medical record reviews in accordance with applicable statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

  • Modifier 25 was not supported
    • CMS Internet Only Manual, Pub 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.6. The documentation does not support a separate E&M service was performed during a global surgery period. Documentation received did not support a significant, separately identifiable service was provided beyond the minor procedure code billed.
  • No response to the documentation request
    • CMS Internet-Only Manuals, Pub 100-08, Medicare Program Integrity Manual, Chapter 3, Section requires providers/suppliers to respond to requests for documentation within 45 calendar days of the additional documentation request. The documentation was not submitted or not submitted timely.
  • Documentation did not support the E&M code billed
    • Internet Only Manual (IOM), Pub 100-08, Medicare Program Integrity Manual Chapter 3, Section and Section; IOM, Pub 100-04, Medicare Claims Processing Manual Chapter 23; IOM, Pub 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.1 A. The documentation submitted does not support the medical necessity of the level of service billed. Documentation supported a higher or lower level of service.


Social Security Act (SSA), Title XVIII

  • § 1815(a) Payment to Providers of Services.
  • § 1833(e) Payment of Benefits.
  • § 1879(a)(1) Limitation on Liability of Beneficiary Where Medicare Claims are Disallowed.
  • § 1893(b), (f)(7)(A)(B)(i-iv), and (h)(4)(B) Medicare Integrity Program.

42 Code of Federal Regulations (CFR)

  • § 410.3 Scope of Benefits.
  • § 410.20 Physician Services.
  • § 410.74 Physician Assistants’ Services.
  • § 410.75 Nurse Practitioners’ Services.
  • § 410.134 Provider Qualifications.
  • § 424.5(a)(6) Basic Conditions.
  • § 482.24(c) Condition of Participation: Medical Record Services.

Internet-Only Manual, Medicare Claims Processing Manual (MCPM), Publication (Pub.) 100-04

  • Chapter (Ch.) 1 General Billing Requirements.
  • Ch. 12 § 30.6 Evaluation and Management Service Codes – General (Codes 99201 – 99499).
  • Ch. 23 Fee Schedule Administration and Coding Requirements.
  • Ch. 30 § 50. Advance Beneficiary Notice of Non-coverage (ABN).

IOM, Medicare Program Integrity Manual (MPIM), Pub. 100-08

  • Ch. 6 § 6.8 Medical Review of Evaluation and Management (E/M) Documentation.
  • Ch. 5 § 5.9 Documentation in the Patient’s Medical Record.
  • Ch. 3 § Time Frames for Submission.
  • Ch. 3 § Additional Documentation Request Required and Optional Elements.
  • Ch. 3 § No Response or Insufficient Response to Additional Documentation Requests.
  • Ch. 3 § Documents on which to Base a Determination.
  • Ch. 3 § Signature Requirements.
  • Ch. 3 § 3.6 Determinations Made During Medical Review.


  • American Academy of Professional Coders (AAPC). Evaluation and Management Coding, E/M Codes. Evaluation and Management Coding, E/M Codes – AAPC external link icon
  • CMS 1995 Documentation Guidelines for Evaluation and Management Services.
  • CMS 1997 Documentation Guidelines for Evaluation and Management Services.
  • The Centers for Medicare and Medicaid Services (CMS). Medical Learning Network (MLN) ICN MLN006764 February 2021. Evaluation and Management Services Guide.

Last Updated Feb 17, 2023