HPC Corner: The Value of Category III CPT® Codes

By: Colin Segovis, MD

Common Procedural Terminology or CPT® is the national coding set for physicians and other health care professional services and formally adopted for procedural reporting under the Health Insurance Portability and Accountability Act (HIPAA). The code set contains various code categories. Category I codes represent the codes for commonly performed services and procedures. These codes provide a mechanism for an imaging study to be submitted into the revenue cycle.

Medicine is advancing at an ever-increasing rate with new technologies continually entering the practice landscape. However, a challenge arises when a new technology or service enters into practice, as a new CPT code is required for that technology or service to be part of the reimbursement process. New codes can be created — but this is done in a careful fashion, with strict criteria, with the goal of minimizing disruption to the existing code set and values.

The AMA understands the importance of recognizing and evaluating new technologies, but an essential component of the creation of a Category I code is having reliable data demonstrating the efficacy of the new service to the CPT Editorial Panel. For new services lacking efficacy data, the CPT code set includes a class of codes designed to address emerging technology – the Category III code.

As stated by the AMA:

“Category III: These are temporary alphanumeric codes for new and developing technology, procedures and services. They were created for data collection, assessment and in some instances, payment of new services and procedures that currently don’t meet the criteria for a Category I code.”

A category III code is quickly dismissed by some because of the belief that “category III codes are not reimbursed.” This is not always the case. Although a Category III code has not undergone valuation by the RUC process, this does not mean that a Category III cannot be reimbursed. Some commercial payors will consider reimbursement of Category III codes.

However, the value of Category III code goes beyond “will it get reimbursement or not.” Category III codes are a mechanism for data collection. Creation of a code, especially a Category I code, is a careful and slow process. This process is data driven, and the Category III code is intended, in part, to assess the utilization of a new technology. One of the requirements for advancing a CPT service from Category III to Category I status is that it must be “commonly performed.”

Recently a new set of Category III codes for 3D anatomic modeling was created through a collaborative effort between stakeholders, including your ASNR CPT team.  The process of printing an anatomic model specific to a patient has the potential of becoming a significant enhancement in the procedural setting. Physicians will have the ability to not only see but touch a model of patient specific anatomy. Model creation requires physician work. However, many questions remained regarding how 3D anatomic modeling will be used in practice.

This effort resulted in both a new set of Category III codes for 3D anatomic modeling and a registry through the ACR’s National Radiology Data Registry to collect data needed to understand how 3D anatomic modeling is used in practice and to generate data that could potentially lead to a future Category I code.  Hopefully, this collaborative effort will serve as an example for future code development. Regardless of reimbursement this year or next, we would encourage ASNR members to report Category III codes when performed. This provides more accurate utilization data; which in turn will allow your HPC volunteers to argue for Category I status, and appropriate valuation in front of the RUC and CMS.