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Dermatologists Warned: Ethical Billing Practices Under Scrutiny as Reimbursements fall
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As healthcare reimbursements continue to decline, dermatologists are facing increasing pressure to maximize billing effectiveness – but not at the expense of ethical and legal compliance. A leading dermatologist is sounding the alarm about possibly fraudulent practices creeping into documentation, particularly regarding surgical wound repairs.
A session at the Maui Derm Hawaii 2026 conference, led by Daniel Siegel, MD, clinical professor of dermatology at SUNY Downstate Health Sciences University and former president of the American Academy of Dermatology (AAD), focused on navigating this challenging landscape. The core message, according to dr.Siegel, is “how to honestly, ethically, not leave money on the table.”
The Pressure to Maximize revenue in a Changing landscape
The issue stems from a confluence of factors. Declining reimbursement rates are forcing practices to seek every legitimate revenue stream. simultaneously, the rise of electronic medical records (EMRs) has introduced templates that, while efficient, can be misused to inflate billing codes. Dr. Siegel, working with Mark Kaufmann, MD, associate clinical professor at Icahn School of Medicine at Mount Sinai, aims to equip dermatologists with the knowledge to avoid both lost revenue and legal trouble.
The “Undermining” Technique and Documentation Pitfalls
One specific area of concern highlighted during the session involves the documentation of undermining – a surgical technique used to relieve tension when closing wounds. When skin edges are brought together, and the closure is too tight, undermining involves separating the skin from the underlying tissue.
According to established guidelines, the extent of undermining directly impacts the complexity of the repair and, thus, the reimbursement code. If undermining reaches the full width of the wound, it qualifies as a complex repair. Though,a concerning trend has emerged: some dermatologists are allegedly documenting undermining measurements that appear statistically improbable.
“You look, and you say, ‘Gee, how often is it exactly the minimum?'” one expert noted, describing the pattern observed in some EMR data. the expectation would be a normal distribution of undermining measurements, with some cases requiring minimal undermining and others requiring significantly more, depending on the wound and patient anatomy. instead, some practices appear to be consistently documenting undermining measurements that fall precisely at the threshold for a more lucrative “complex repair” code.
The Risk of Federal Inquiry
The potential consequences of such practices are severe. While some may believe they can avoid detection, experts warn that federal investigators are increasingly sophisticated in their ability to uncover fraudulent billing.
“If I were answering the question for the Justice Department, or consulting, I would say, ‘Well, I’d hire a medical van, I’d get an ostomy wound nurse who can take a dressing down. I’d get an ultrasonographer who can do high-frequency ultrasound, and as someone is walking out of your office with a big, bulky dressing on their face. I would show my badge, I’d walk into the truck, have the ostonomers take the dressing down, have the ultrasonographer look, and you can get a fairly accurate measurement, which is actually larger than reality because it has been stretched a bit.’ But if you’re claiming 3 cm,and they’re only finding you’ve done 3 mm,well,you’re going to be writing a big check,or you’ll get
