Understanding CPT Codes for Physician Reimbursement

AMA LogoCPT® is an acronym for Current Procedure Terminology, a code set developed in 1966 that describes medical, surgical and diagnostic services performed by physicians and other qualified health care professionals. AMA owns the copyright for CPT®, and the code set is maintained by the AMA CPT® Editorial Panel. By arrangement with CMS, CPT® is part of the Healthcare Common Procedure Coding System (HCPCS), which has been designated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as a standard code set for physician and outpatient services. CPT® is a critically important tool for a wide range of health care stakeholders: industry trying to determine how their products will be reported on claims; physicians, other providers and suppliers of health care services reporting their services on claims; and payers developing payment and coverage policies.

There are three categories of CPT® codes.

  • Category I codes represent services that are widely performed, have approval from the U.S. Food and Drug Administration (FDA) (if required) and are supported by a sufficient level of evidence published in the peer- reviewed literature.
  • Category II codes are tracking codes intended to be used for performance measurement. See prior blog posts for more on CPT II codes.
  • Category III codes are temporary codes for new and emerging technologies, and were created to allow for data collection for new procedures or services and to limit use of established Category I codes for new technologies that are not described by the existing codes.

Category III codes differ from Category I codes in that they may not be performed by many healthcare providers across the United States, do not require FDA approval and do not need to meet the level of supporting evidence required for assignment of a Category I code. While having a code is never a guarantee of coverage, a number of payers have policies under which any Category III codes are generally excluded from coverage.  Or, at least require prior authorization.

Category III codes often represent temporary codes for new and emerging technologies. They have been created to allow for data collection and utilization tracking for new procedures or services.  To be eligible for a Category III code, the procedure or service must be involved in ongoing or planned research. The rationale behind these codes is to help researchers track emerging technology and services to substantiate widespread usage and clinical efficacy. In the past, researchers have been hindered by the length and requirements of the current CPT approval process.  More to come on this topic in a future blog post.

Recent examples of Category III codes include:

  • New Category III code range 0340T-0346T describes various pulmonary ablation and related services. These codes are effective Jan. 1, 2014.
  • New Category III code range 0347T-0358T describes placement of interstitial device(s) for radiostereometric analysis (RSA) and related services. These codes are effective July 1, 2014.
  • New Category III code range 0359T-0374T describes various adaptive behavior treatments and services. These codes are effective July 1, 2014.