Heads up: this issue is from February 26, 2025. Because it covers time-sensitive coding and regulatory topics, some details may have changed since. See the latest issues for current guidance.
In my infinite silliness, I completely ignored these Level III codes until 2023, when I learned that harvesting, dispatching, and administering CAR-Ts were Level III's. As it happens, some payers paid these codes before receiving Level I codes last month. So, let us tell you a little more about them. If you are wondering what Level II CPT codes are, you use these for quality measurement in MIPS and some for HEDIS measures in hospitals. Onto Level III...
Category III Codes
Category III CPT codes are temporary for emerging technology, services, and procedures, making them more valuable than Level II codes. These codes are intended to track usage and the data collected. Although coverage and payment for the performance of a procedure with a Category III code is not common among the majority of payers when initially released, physicians and other providers are required to use the most appropriate code to describe the service provided. Thus, reporting a Category III code for a service accurately described by the code is appropriate. In the long run, the determination for coverage should be based upon clinical evidence and medical necessity, and not the CPT code category. Reporting should be used to substantiate widespread usage in the Food and Drug Administration (FDA) approval process. However, Category III codes are not automatically designated for Level I services or procedures, as the CPT Editorial Panel initially determined they did not meet the requirements for a Category I code and designated a Level III code.
To expedite the availability of CPT Category III codes and to reflect the need to establish
tracking mechanisms more quickly, the new CPT Category III codes are released semiannually via electronic distribution on the AMA CPT Web site (www.ama-assn.org/go/cpt ). CPT Level I codes, with few exceptions, are released once per year. The codes are effective six months after they are first posted. (Category III codes posted in July become effective the following January 1, and Category III codes posted in January become effective the following July 1.)
Unlike Category II, there is a pathway for Level III codes to become Level I. According to the CPT process, Category III codes are to be archived five years from publication in the CPT codebook if they have not been accepted for placement in the Category I section of CPT. If it is demonstrated that a Category III code is still needed, it will be retained. By the way, the publication date is when the information is printed in the CPT codebook, not when it appears on the AMA website.
Although coverage and payment for the performance of a procedure with a Category III code is not common among the majority of payers when initially released, physicians are required to use the most appropriate code to describe the service provided. Reporting of a Category III code for a service accurately described by the code is appropriate. In the long run, the determination for coverage should be based upon clinical evidence and medical necessity, and not the CPT code category.
However, when a Level III code portrays something not currently reportable, it can be paid by Medicare and Commercial payers. Before proceeding with the performance of a procedure with a Category III code, it is important to determine if the reimbursement covers the cost of the device/procedure. When Medicare covers a Level III, it is MAC-priced, which may mean the claim will be manually reviewed. But, it will be paid if it is appropriate for the condition and medically necessary for the beneficiary.
Level III Example
I'm frequently asked if there are really codes below Level I that are actually paid. As previously mentioned, because there are no relative values for these codes, they are MAC-priced and/or a contracted price for commercial and Medicare Advantage payers. Let's take an example. Check out this Level III code descriptor:
0794T---Patient-specific, assistive, rules-based algorithm for ranking pharmaco-oncologic treatment options based on the patient's tumor-specific cancer marker information obtained from prior molecular pathology, immunohistochemical, or other pathology results which have been previously interpreted and reported separately
This activity is not represented in any other code in Level I. There are actual guidelines for it in CPT. It is covered by Medicare and is MAC-priced. So, should you report it? Well, it will sunset on January 1, 2029. So, if you want to be able to get paid for this as a Level I, it might be a good idea to bill it. Also, it might be a plan to contract with your commercial plans as well.
For more information on Level III coding, click here.
