A Current Procedural Terminology code, AKA CPT code, is a five-digit code used by the US Healthcare ecosystem to identify and describe medical services and procedures performed by healthcare providers. The use of standardized terminology helps promote a common understanding of procedures performed, and creates a common language for healthcare providers, insurers, and billing systems to communicate about medical procedures/services. The list of CPT codes is reviewed and updated annually by the American Medical Association (AMA).
CPT codes are used for a number of things, including billing, provider tracking, and patient and provider oversight. Practically speaking, healthcare providers use CPT codes to bill insurance companies (AKA payers or health plans) for the services they provide. This ensures providers are paid correctly for their services and patients receive appropriate coverage from their insurance plans. CPT codes are also used to track provider performance and identify areas for improvement in healthcare delivery. Accurate code selection on the part of providers is crucial for ensuring proper payment and tracking healthcare services effectively.
The three types of CPT codes are category I, II, and III.
Category I codes are the most common type and are used for describing established procedures and services that are widely performed in clinical practice, supported by substantial clinical evidence and research, and considered medically necessary for the diagnosis, treatment, or management of specific conditions. They are typically covered by health insurance plans. Only Category I codes are used for billing and reimbursement. Examples include 99214 for an office visit for an established patient or 77059 for a chest X-ray.
Category II codes are supplemental tracking codes used for data collection and tracking performance measures related to quality of care. They are not used for billing and reimbursement of medical procedures. For example, CPT 2022F and 2023F (respectively) are used for documenting a retinal eye exam with and without evidence of retinopathy. 4000F is used to record that Body Mass Index (BMI) was measured and recorded.
Category III codes are temporary codes for emerging technologies and procedures that are under clinical evaluation but still lack sufficient evidence for permanent Category I status. These codes may have limited or no coverage by insurance plans.
When a CPT I code is designated investigational by a payer, it means that the procedure is still under evaluation and is not yet considered a standard of care by the payer. This may be due to a lack of established efficacy. In other words, the safety and effectiveness of the procedure may not have been sufficiently proven in the opinion of the payer. As a result, a payer might limit reimbursement for investigational CPT codes, or they may require prior authorization to process the reimbursement. Some might also require that providers obtain informed consent from patients before performing a procedure with an investigational CPT code.
While an investigational CPT I code reads a lot like a CPT III code, subtle differences do exist. An investigational CPT I code describes a procedure that is still under clinical evaluation by a payer to determine its safety, efficacy, and potential for becoming a standard of care, but presumably will eventually be designated category I. That is to say that it is a part of the permanent CPT I code set, and simply has a temporary "investigational" designation. A CPT I code gets its investigational designation primarily to gather data on the outcomes and effectiveness of the procedure, and maybe be billable under certain circumstances.
A CPT III code, on the other hand, describes a new and emerging procedure that lacks sufficient evidence to establish its effectiveness and safety for widespread use. The code is temporary with a "T" designation at the end of it and assigned a default five-year period for data collection and evaluation, and often has limited or no coverage by insurance plans. CPT III codes are used to track utilization and outcomes of the procedure to inform future decisions about its clinical value, to determine if it might become a permanent CPT I code if proven safe, effective, and widely adopted. If it does not become a CPT I code, then it is typically retired.
To summarize, the three categories of CPT code are I, II, III, and I with an investigational modifier. Category I codes describe procedures that are well established and considered standard of care, and as such are usually billable. Category I codes that are labeled investigational by a payer, are still in the process of being considered for standard category I, are being tracked to measure efficacy, and may be billable under certain circumstances. Category II codes are used to track quality of care metrics for providers, not billing or reimbursement, and category III codes are used for new and emerging procedures that are still being scrutinized and are rarely billable, if ever. Use and record of codes in all three categories by providers is important to ensure proper payment and reporting.