The new economics of teledermatology in 2025
Many dermatology leaders are discovering that their telehealth visit volumes are strong, but their bank deposits are not. Underpayments, unexplained zero-pays, and “not covered for telehealth” denials often appear weeks after services are rendered. By then, the schedule has moved on, physicians are frustrated, and staff are buried in appeals.
Teledermatology is no longer a pandemic stopgap. In many markets, virtual skin visits already account for 20 to 30 percent of dermatology encounters, particularly for acne, chronic rashes, medication management, and follow-ups. If you mismanage billing on this slice of volume, you are leaving a meaningful percentage of annual revenue at risk.
In 2025, the challenge is not whether payers cover teledermatology. CMS and many commercial plans clearly do. The challenge is operational: keeping up with new telehealth-specific CPT codes, shifting POS rules, modifier changes, and payer-by-payer quirks, while maintaining defensible documentation and HIPAA compliance.
This article outlines a practical framework for executives, practice managers, and RCM leaders who want to:
- Convert teledermatology encounters into predictable cash
- Reduce coding and POS-related denials
- Stay inside the lines on compliance and privacy
- Align staffing, workflows, and technology to support virtual dermatology at scale
Understanding visit types and the 2025 teledermatology code architecture
Before you worry about POS codes or modifiers, you need absolute clarity about what you are billing. Teledermatology can span several service types that payers treat differently and that map to different CPT families in 2025.
The key visit categories:
- Synchronous audio/video E/M visits where the dermatologist and patient interact in real time with both audio and video.
- Audio-only visits which remain covered for some conditions and populations, but under a different slice of the CPT book.
- Asynchronous or “store-and-forward” reviews where patients submit images and history and the dermatologist responds later with an assessment and plan.
- Ancillary work tied to procedures such as virtual pre-op consults, post-op wound checks, or medication management following biologic initiation.
CPT 2025 introduced a new series of telehealth-specific codes (for example, a 98000–98007 family for real-time audio/video and 98008–98015 for audio-only, as signaled by AMA communications) that are intended to replace older telephone-only codes in many scenarios. While exact code selection must always follow the current AMA CPT manual and payer bulletins, there are three operational implications for your revenue cycle:
- Code sets are now modality-specific. Billing audio-only services under audio-video or in-person E/M codes is a fast path to denials and potential audit findings.
- The selection logic mirrors office E/M rules. Most teledermatology E/M codes follow the same Medical Decision Making (MDM) or total-time framework as in-person visits. If your team already retooled for the 2021 office E/M changes, you can apply the same thinking to telehealth codes.
- Modifiers may or may not be required. Some of the new codes intrinsically indicate telehealth, which can reduce the need for modifier 95, but this differs by payer.
What leaders should do:
- Build a concise internal grid that maps: visit type, technology used, payer, and the correct 2025 CPT family. This should live inside your EHR or billing system, not as a one-off PDF.
- Track key coding KPIs monthly: percentage of encounters coded with new telehealth codes, error rates by coder, and denial rate by code family.
- Run a 90-day parallel audit comparing old vs new code usage to confirm you are not leaving allowable revenue on the table when switching to 2025 code sets.
POS codes, modifiers, and payer-specific configuration
The second source of revenue leakage in teledermatology is incorrect claim “packaging.” Even if the CPT is perfect, the combination of POS and modifiers often determines whether the claim pays, how much it pays, and whether it is flagged for post-payment review.
Key 2025 building blocks:
- POS 02 Telehealth provided somewhere other than the patient’s home, such as school or workplace.
- POS 10 Telehealth provided in the patient’s home.
- Modifier 95 Synchronous telemedicine service rendered via real-time interactive audio and video; no longer universally required when the CPT code itself is defined as telehealth only.
- Legacy or payer-specific modifiers, such as GT, that still appear in some commercial policies or Medicaid bulletins.
Revenue impact: A common pattern in dermatology groups is mixed results across payers. Medicare may pay correctly with POS 10 and no modifier, while a regional commercial plan silently underpays when modifier 95 is missing, or denies with POS 02 where they expect POS 10. When you replicate this across thousands of claims, the result is a chronic few percentage points of lost net revenue and a bloated A/R inventory.
Operational checklist:
- Create a payer matrix that explicitly lists for each major payer:
- Acceptable teledermatology visit types
- Required POS codes and any exceptions
- Modifier requirements (95, GT, others, or none)
- Parity or differential reimbursement vs in-person visits
- Configure your practice management system so that POS defaults are driven by encounter type and patient location, not left to manual selection by front-desk staff.
- Use claim scrubber rules to flag mismatches such as POS 11 with a telehealth code, incompatible modifier/CPT combinations, or missing 95 where the payer demands it.
This is an area where many organizations benefit from targeted analytics. Tracking denial reason codes related to POS or modifiers and viewing them by payer and location can quickly show where training or configuration changes are needed.
Documentation, medical necessity, and audit resilience
Teledermatology is attractive to payers because it can be lower cost and higher convenience. It is also attractive to auditors because weak documentation is common. Audio-only visits, brief visual inspections, and asynchronous picture reviews can all tempt clinicians into sparse charting. That is a compliance and revenue risk.
At minimum, every billable teledermatology encounter should clearly capture:
- The specific technology used (audio-video vs audio-only vs asynchronous)
- Where the patient was located during the encounter
- That the patient consented to receive telehealth services
- Clinical content sufficient to support the MDM or time billed
- Start and stop time, if time-based code selection is used
Dermatology carries additional nuance. Image quality, the number of lesions evaluated, decisions about biopsy vs watchful waiting, and risk-related decision making about biologics or isotretinoin are all important MDM drivers. Without this detail, many encounters look like low-level E/M on paper, even when the actual risk and complexity were higher.
Practical framework for physicians and scribes:
- Embed telehealth-specific “smart phrases” in your EHR that automatically pull in consent language, technology type, and location, so providers only need to document clinical specifics.
- Standardize dermatology telehealth templates that prompt for:
- Number and type of lesions or areas examined
- History of prior treatments and response
- Risk factors or comorbidities that influenced decisions
- Any limitations of the virtual exam that might justify future in-person follow-up
- Audit a sample of teledermatology encounters monthly with the same rigor applied to in-person charts. Score for completeness, medical necessity, and code-level support.
From a KPI perspective, executives should monitor the proportion of teledermatology encounters downgraded on internal audit, as well as the rate of payer downcodes or post-payment recoupments specific to telehealth. A spike in either is a red flag that documentation training or template redesign is required.
HIPAA, platform selection, and virtual-care risk management
The technology stack that makes teledermatology convenient can also create compliance vulnerabilities. Video platforms, image capture tools, patient messaging, and cloud storage intersect with Protected Health Information at every step. OCR has made it clear in multiple enforcement actions that “we were just trying to make it easy for patients” is not a defense.
Key risk domains for teledermatology:
- Platform security. Using non-HIPAA-compliant video tools or image-sharing apps without BAAs exposes you to breach risk and reputational damage.
- Image handling. Dermatology images may be stored in phones, laptops, or third-party cloud systems. If these are not covered by your HIPAA security policies and BAAs, you have a gap.
- Access controls. Staff working from home or in hybrid environments need strong authentication, device management, and clear rules about PHI storage.
Governance actions for leadership:
- Centralize teledermatology on a limited, vetted set of platforms that are explicitly covered by BAAs and your security risk analysis.
- Prohibit ad hoc texting or image sharing via patient-to-staff cell phones. Instead, push images through the patient portal or a secure app that feeds your EHR.
- Require multi-factor authentication for any remote access to systems that store or transmit derm images and notes.
- Coordinate with your compliance officer to update your HIPAA security risk assessment to explicitly include teledermatology workflows.
Strong HIPAA and security practices do not just prevent fines. They also improve payer confidence when payers perform network audits or value-based contract reviews. Well-governed virtual care is increasingly a differentiator for health systems and groups negotiating narrow networks and digital front door strategies.
Front-end workflow design: getting eligibility, consent, and scheduling right
Many billing problems originate long before a claim is created. Teledermatology, in particular, depends on flawless front-end execution, because coverage rules, cost-sharing, and referral requirements can differ from in-person dermatology services.
High-yield front-end steps:
- Telehealth-specific eligibility verification. Your staff should not just confirm active coverage. They must verify:
- Whether the plan covers virtual dermatology for the patient’s policy
- Any originating-site or patient-location restrictions
- Differences in copay/coinsurance for telehealth vs in-person
- Whether audio-only is covered if that is your fallback option
- Standardized patient consent intake. Consent for telehealth should be:
- Obtained in advance, not improvised by the physician during the visit
- Stored in a discrete field that can be reported, not buried in free text
- Reviewed annually or per payer requirement
- Scheduling design that drives correct coding. Build distinct visit types in the scheduler such as “Telederm New Audio/Video,” “Telederm Follow-up,” “Telederm Acne Maintenance,” etc. These should automatically:
- Set the expected visit duration
- Trigger appropriate pre-visit questionnaires or image upload instructions
- Drive the default POS and telehealth flags that your billing system uses
From a revenue cycle perspective, strong front-end design reduces the volume of “avoidable” denials. Monitor metrics such as teledermatology denial rate attributable to eligibility or authorization, and percentage of telehealth visits where consent is missing at time of encounter. Those are management levers, not just compliance statistics.
Automation, analytics, and staffing for sustainable teledermatology RCM
Teledermatology growth puts pressure on already stretched billing teams. The answer is not simply to “work harder” but to automate repeatable tasks and focus human expertise where it adds value.
Where automation can help:
- Eligibility and benefits verification. Use tools that can verify telehealth coverage, copay, and out-of-network status in batch, and that can tag accounts where teledermatology is not covered so staff can redirect those patients appropriately.
- Claim scrubbing. Configure rules specific to telehealth codes, POS 02/10, and modifiers so that obvious errors never leave your clearinghouse.
- Denial pattern detection. Use dashboards that segment denials by:
- Telehealth vs in-person
- CPT family
- Payer
- Location or provider
This allows you to rapidly detect and correct systemic issues like a payer policy change or an incorrect POS default in one clinic.
Staffing and role design:
- Designate a small “telederm champion” team across coding, front-end, and billing, rather than assuming every staff member will track the minutiae of telehealth policy.
- Cross-train coders and billers in dermatology-specific patterns: biopsy plus telehealth E/M, chronic disease management via telehealth, and global period nuances for virtual post-op checks.
- Set explicit productivity and quality benchmarks for telehealth claim submission and follow-up that are distinct from those used for in-person encounters.
Well-implemented automation and role clarity can materially improve cash performance. In many practices, a focused teledermatology RCM initiative yields double-digit reductions in telehealth denial rates and several days’ improvement in net A/R for virtual services.
Governance, measurement, and next steps for leaders
Teledermatology has moved from experiment to core access channel. That means it deserves the same governance discipline you already apply to surgical services or infusion centers.
Recommended oversight structure:
- Establish a quarterly telehealth revenue cycle review that includes:
- Clinical leadership (dermatology service line lead)
- RCM leadership
- IT / EHR configuration
- Compliance or privacy officer
- Review a concise scorecard that covers:
- Teledermatology visit volume by type
- Net collection rate for telederm vs in-person
- Top 5 telederm denial reasons and their trends
- Documentation audit results and any physician-specific patterns
- Open compliance or security issues related to virtual platforms
Concrete actions you can take in the next 90 days:
- Update your payer matrix and coding tools to reflect 2025 telehealth CPT changes and POS expectations.
- Rebuild teledermatology visit types in the scheduler to drive correct front-end setup and documentation prompts.
- Run a targeted audit of 50 to 100 recent teledermatology encounters across providers, comparing what was done clinically to what was billed.
- Close any obvious HIPAA or platform gaps, including BAAs, image handling workflows, and MFA for remote access.
If your internal team is already at capacity, partnering with an experienced telehealth-focused billing group can accelerate this work and provide benchmarks from similar organizations. One of our trusted partners, Quest National Services, specializes in full-service medical billing and revenue cycle support across physician specialties, including practices that rely heavily on virtual care.
Teledermatology will continue to evolve, but organizations that get the basics right now will benefit from higher patient satisfaction, more predictable revenue, and fewer compliance headaches.
If you want to evaluate your current teledermatology billing performance, align stakeholders, or pressure-test your coding and POS strategy, you can start by contacting our team for a structured discussion of your revenue cycle objectives and constraints. Contact us to explore options for strengthening your virtual dermatology revenue cycle while keeping compliance and patient experience front and center.
