On July 1, 2013, the American Medical Association (“AMA”) released its semi-annual update to its list of CPT Category III codes. The AMA identified 12 new Category III codes; these codes all are scheduled to become effective as of January 1, 2014. The AMA’s release of its update raises reimbursement coverage issues, as described below.
The AMA’s release is part of its overall update of the CPT subsystem of HCPCS, the standard code set for items and services furnished in outpatient settings. HCPCS is divided into two principal subsystems, Level I and Level II. Level I consists of the CPT coding system, maintained by the AMA to identify services and procedures furnished by physicians and other health care professionals. (Level II is maintained by CMS and is used primarily to identify products, supplies, and equipment not included in the CPT codes.)
Category III codes are codes for what the AMA classifies as emerging technologies, services, and procedures. They are often used to help substantiate the widespread adoption of a relatively new technology, even those covered by Medicare. They are temporary codes; the AMA states that they are intended to be used for data collection to substantiate usage or to provide documentation for the FDA approval process. They expire in 5 years if the service or procedure is not elevated to a Category I code through widespread adoption. Many of the Category III codes describe procedures covered by Medicare.
Reimbursement of Category III codes is at the discretion of payers. Although the Medicare Program Integrity Manual indicates that contractors should conduct literature reviews before issuing local coverage determinations, it appears that many contractors do not do so for Category III codes. Many contractors simply deem procedures described by Category III codes to be not covered unless and until a member of the public challenges such non-coverage. A review of local coverage determination revisions shows that such public reconsideration requests have resulted in many codes being removed from default non-coverage policies.
A list of the Category III codes that the AMA released on July 1, 2013, and that are effective as of January 1, 2014, may be found on the AMA’s web site.