Category III codes provide key to new technologies

February 15, 2009
L. Neal Freeman, MD, MBA, FACS

Ophthalmologists are well acquainted with the Current Procedural Terminology (CPT), but many ophthalmologists are only familiar with CPT's "Category I" codes. It is important for ophthalmologists to understand code Category III, since many eye-care services have appeared or will appear in this category.

Key Points

Category III codes are adjunctive to those in Category I. They are represented by an alphanumeric string consisting of four numbers followed by the letter "T." It is important for ophthalmologists to understand this code category, since many eye-care services have appeared or will appear in Category III. Category III codes were created to allow reporting of new technologies. The existence of a code for such services allows for easy tracking. This is especially relevant if the code comes under consideration for permanent Category I status.

The requirements for obtaining a Category III code are much more lax than those for obtaining a Category I code. For a service to become a Category I code, it must be approved by the FDA for the specific purpose, or such approval must be imminent.

Multiple ophthalmic examples of Category III codes exist. Many of these were implemented in 2008, but did not appear in the CPT Manual until 2009. These include:

A slight modification was made to the code below, which appears in the 2009 CPT Manual:

The following code will be in the 2010 manual but was implemented in January:

Coverage for Category III codes varies by payer. Many payers consider the majority of Category III codes to be "experimental" and, thus, not eligible for payment. Payers may issue policy guidelines regarding Category III codes, but these services are commonly reviewed on a case-by-case basis. When considered individually, a report from the medical record may be required.

No relative value units (RVUs) are assigned to Category III codes, so there is very little or no standardization regarding payment rates. Wide variation in payment levels occurs often. Many payers will look to similar codes (whether in Category I or in Category III) to determine a fair level of reimbursement.

If a Category III code exists for a particular service, it should be used for reporting. Do not use a Category I unlisted code (such as CPT 66999, unlisted procedure, anterior segment of eye) unless specifically instructed to do so by the payer.

A code will not maintain Category III status forever; it expires after 5 years, unless it has been elevated to Category I status, known as the sunset period. This "self-cleansing" mechanism ensures that the Category III list remains current.

Transition of a Category III code into Category I status leads to standardization of payment levels, since RVUs will be assigned to the code. It is entirely possible, however, that the payment level will decrease as a code "moves up" from Category III into Category I. This was the situation when the Category III code CPT 0025T, determination of corneal thickness (e.g., pachymetry) was elevated into Category I status as CPT 76514, ophthalmic ultrasound, diagnostic; corneal pachymetry.

If you intend to provide a Category III service to a Medicare beneficiary, you should strongly consider asking the patient to sign an Advance Beneficiary Notice of Noncoverage (ABN). You may collect up front from the patient, but you must refund the payment if the carrier reimburses for the service. Depending on the contract, a form similar to the Medicare ABN may be appropriate for use in patients covered by a private plan. Someone in your office needs to be on the watch for new Category III codes. These codes appear frequently and potentially have a large impact on your bottom line.

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