How a health care service becomes a billing code

You’ve just invented a new medical procedure. It’s going nowhere unless doctors can get paid for it. Why should insurers and public programs do that? Who decides? And how much should they pay? The American Medical Association (AMA) is on it.

Like me, you’re probably aware that there’s an AMA committee that effectively decides how much Medicare pays for each billable service physicians deliver to its beneficiaries. (If not, read this and/or this.) Like me, you may have been unaware that there’s another AMA committee that decides whether a physician service becomes billable in the first place. What it needs is a Current Procedural Terminology (CPT) code.

The AMA’s CPT Editorial Panel meets three times a year to assign CPT codes to new and emerging technologies. It has 17 members, 11 of whom are specialty society-nominated physicians. The Blue Cross and Blue Shield Association, America’s Health Insurance Plans, the American Hospital Association, and the Centers for Medicare and Medicaid Services (CMS) also get seats at the table. The last two seats are filled by members of the CPT Health Care Professionals Advisory Committee, which is itself primarily comprised of physicians nominated by the national medical specialty societies.

CPT codes comprise part of Medicare’s Healthcare Common Procedure Coding System (HCPCS, the rest of which I’ll discuss in a subsequent post). Though I can’t point to any document that backs me up, I’d be surprised if any medical system or insurer in the US did not track care and reimburse based on CPT/HCPCS. Medicaid is required by law to do so. The VA uses them too, which I know from personal experience.

So, the AMA’s CPT Editorial Panel wields considerable power. Without a CPT code, use of your new medical technology is not going to get reimbursed by an insurer or public program. Without reimbursement, it’s highly unlikely many physicians will use it. No use, no sales.

Though there’s a formal application process, replete with many documents and forms, according to the AMA, the bar for getting a “category III” (emerging technology) CPT code can be as low as:

There is a) at least one Institutional Review Board approved protocol of a study of the procedure or service being performed, b) a description of a current and ongoing United States trial outlining the efficacy of the procedure or service, or c) other evidence of evolving clinical utilization.

Category I codes require more evidence of efficacy, and category III codes can convert to category I when that evidence is available. You can read more about the establishment of CPT codes at the links above or here and here. The next CPT Editorial Panel meets in October. It’s open to the public, but a confidentially statement must be signed to attend.



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