Medical Director Article – ‘News From Medicare’

We are coming up to the first anniversary of the major item number changes made to the Medicare Schedule for skin cancer.

Overall, I feel that the outcome of the 2016 review has been a positive one. The schedule is more logical and unnecessary items have been removed. Importantly, closures are now remunerated based on defect – rather than lesion – size.

Patient rebates and bulk-billing bottom lines appear not to have been unduly affected.

There has been a more recent specific change, plus a couple of other issues, about which I recently posted on the intranet.

Last Wednesday, I had the opportunity to discuss and confirm these with Dr Primrose, Principle Medical Advisor to the Provider Benefits Integrity section within the Department of Health & Ageing. The discussion was a positive one and the outcomes are below. He understood that the purpose of the discussion was for me to be able to definitively advise our group of Medicare’s interpretation of the schedule and how we may use it.


This is a rather surprising turnaround to what we all understood to be the previous Medicare policy, where the melanoma item number may only ever be claimed on a single occasion, for its definitive removal (‘curative intent’ & ‘adequate margins’).

Now, the initial excision biopsy – if this resection is sutured and subsequently confirmed by histopathology – may be billed with the full melanoma excision item number (rather than the TCUS item we would have been using). The formal excision with adequate margins is then billed as a melanoma a second time.

I pointed out that this is direct contrast – in fact the very opposite – to two specific parts of the Medicare explanatory notes. He confirmed what had been said in writing; that the intention of the schedule is not to restrict Medicare rebates for melanoma removals. I suggested that the DoHA amend the schedule wording to avoid future confusion if any of us are audited.

Billing for Formal Excisions:

The question arises with a formal excision of any neoplasia after an initial excisional biopsy; ‘Is the calculation of margins from the line of scar left by the sutured excisional biopsy or are the margins calculated from the edges of the initial lesion, prior to excision?’

There may be a billing difference as the defect size is different.

Again, the answer accorded with written advice. It is practitioner choice, based on the best outcome for the patient (e.g. if the histological margins reach the edge of the surgical specimen). Ultimately, Medicare is unwilling to dictate the way in which we choose to practise, as long as it falls within accepted guidelines.

There is, of course, a pragmatic difficulty in measuring margins from a lesion that is no longer there. Accurate recording of the lesion’s initial size is therefore essential.

Island Pedicle / V-Y / Comet (synonymous) + Keystone Flaps:

These flaps are clinically very useful in certain circumstances as the flap itself takes its own blood supply with it, hence often heals better than an alternative flap in a location where sufficiency of skin perfusion may be a problem. There is also the potential benefit of a greater chance of preserved sensation with these flaps, as compared with others. This may also be important in some anatomical locations.

You may have noticed item 45563 for this flap. It rebates significantly more than the 45201 that we would use as standard.

The Medicare descriptor gives no indication as to why and there are no explanatory notes giving further detail.

I questioned Dr. Primrose about features such as size and location; he was clear that there is nothing more to add to the schedule, which delineates neither. He was equally clear, however, that an appropriate flap should only ever be used where clinically warranted.

With this (and in general), we should make clear notes that will stand up to Professional Services Review board scrutiny, if we were ever audited. Medicare wish the schedule to be used correctly, with the best interests of the patient at the core of any clinical decision. Good notes will reflect that and naturally form a defence if audited.