Infantile hemangiomas that occur in the lumbosacral region in infants have an increased risk for occult spinal dysraphism, especially those that are large or associated with more than one abnormality (both being the case with this patient). Ulceration and coexisting anomalies have increased risk for predisposition to spinal anomalies. Spinal dysraphisms that are frequently associated with infantile hemangiomas include tethered cord, spinal lipoma, and intraspinal hemangioma. However, multicenter studies have showed that even isolated infantile hemangiomas in this region can be associated with spinal anomalies. This is because the neural tube has five origin centers and closes by meeting at four locations: the forehead, the back of the skull, the nape of the neck, and the lumbosacral spine.
A thorough physical examination including genitourinary, anal, lower extremity, and neurologic components is hence recommended, and LUMBAR syndrome (similar to PHACE syndrome in the upper half of the body) should be considered during this evaluation. 
MRI is recommended if a suspicious cutaneous lesion overlies the spine, in order to fully rule out spinal dysraphism. Other lumbar and lumbosacral abnormalities that are included in the differential diagnosis for this case include, but are not limited to, the following:
Other vascular lesions and malignancies
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Cite this: Dan Beardmore, Saba Fatima. A Newborn Infant With a Lumbar Lesion and Dermal Defect - Medscape - May 15, 2018.