Coding for New & Emerging Technologies

Jan 23, 2025 | ANJC News & Updates

By David Klein, CPC, CPMA, CHC, ANJC Coding & Compliance Consultant

As new devices and technologies in healthcare emerge, Providers often face challenges in coding and securing payment for these innovations.

Providers frequently consult me about these new and exciting medical technologies, hoping the new technology will fit within existing coding frameworks. Sometimes, they receive vague instructions or guidance from manufacturers on which code to use, but they remain uncertain about how to properly code for these new devices.

In many instances, these new devices are not accurately described within the current procedural code sets. The decision to “fit” a newer device or procedure using an existing code depends on whether its technology or methodology simulates a current device or procedure.

When the new device or procedure doesn’t fit, an unlisted code is often used. However, many Providers don’t realize that there may be other options.

Current Procedural Terminology (CPT®)

CPT®, or Current Procedural Terminology, is a medical code set used to report medical, surgical, and diagnostic procedures and services. Developed and maintained by the American Medical Association (AMA), CPT® codes are a critical component of the healthcare industry, serving as a uniform language for communicating information about medical services and procedures.

The CPT® descriptive terminology and associated code numbers provide the most widely accepted medical nomenclature used to report medical procedures and services for processing claims, conducting research, evaluating healthcare utilization, and developing medical guidelines and other forms of healthcare documentation.

Contained within CPT® there are three categories of codes, as follows:

Category I: These are the most used CPT® codes and describe the vast majority of healthcare services and procedures performed by healthcare providers. They are divided into six main sections: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology, Laboratory, and Medicine.
Category II: Category II are optional performance measurement codes that provide information about the quality of care delivered. They are typically used for data collection, measurement, and analysis.
Category III: Category III are temporary codes used for emerging and experimental services, procedures, and technologies.

It is important to recognize that CPT® (and HCPCS – Medicare’s version of procedure codes) is considered a national standard under the HIPAA Transactions Rule (see 45 CFR 162.923(a), 162.1001-1011). Under HIPAA, The Department of Health and Human Services (HHS) adopted these specific code sets for procedures used in all transactions. The purpose of the HIPAA Transactions and Code Set Rule is to set a standard for healthcare transactions and ensure the uniform use of code sets within the healthcare industry.

Choosing the Correct Code

When trying to determine the correct code for a new device or procedure, it is critical for Providers to make sure they understand basic rules of coding. CPT® provides specific instructions that must be followed when choosing a particular CPT® code, as follows:

“Select the name of the procedure or service that accurately identifies the service performed. Do not select a CPT® code that merely approximates the service provided.”

Similarly, the National Correct Coding Initiative Policy (NCCI) Manual for Medicare Services® states:

“A physician should not report a CPT® code for a specific procedure if it does not accurately describe the service performed.”

In other words, you cannot use a code that is “close” to the service being provided. Either the code describes the procedure or service being performed or it does not. If the new technology does not exactly fit an existing code, then you must consider the unlisted CPT® codes.

An unlisted code represents an item, service, or procedure for which there is no specific CPT® code (including Category II and III codes). The CPT® code book includes a number of unlisted Category I codes, found at the end of a section or subsection in the CPT® manual.

A summary list of the unlisted CPT® codes is also located in the guidelines section for each chapter of the CPT® code book. The long descriptors for these codes start with the term “Unlisted.” For example, CPT® 97039 is defined as “Unlisted modality (specify type and time if constant attendance).”

However, before you select an unlisted code, you must first consider Category III CPT® codes. This step in the coding process is critical when choosing the correct code for a new technology. Remember, Category III codes have been specifically developed for “emerging technologies.”

More importantly, however, CPT® guidelines state that Category III codes must be used over unlisted Category I codes if they are available, as follows:

“If a Category III code is available, this code must be reported instead of a Category I unlisted code.”

According to CPT®, using a Category III code instead of an unlisted code “is critically important in the evaluation of health care delivery and the formation of public and private policy. The use of the codes in this section allows physicians and other qualified health care professionals, insurers, health services researchers, and health policy experts to identify emerging technology, services, procedures, and service paradigms for clinical efficacy, utilization, and outcomes.”

Based on the above, the guidelines are clear. The codes, their definitions, and instructions are considered Federal law.

Federal law states that when selecting a code, you cannot “approximate” the choice; it either defines the service provided or it does not. If it does not, then Providers should look to the unlisted section of codes. However, the law further states that if a Category III code is available that describes the service, then the Category III code should be used instead of an unlisted code.

Example: Extracorporeal Shock Wave Therapy (ESWT)

Extracorporeal shock wave therapy (ESWT) is an emerging technology. It is a non-invasive treatment that involves delivery of an acoustic “shock wave” to a specific area of the body. The Centers for Medicare and Medicaid Services defines ESWT as:

“Extracorporeal shock wave therapy (ESWT) is a non-invasive treatment that involves delivery of an acoustic shock wave to a specific area of the body. The objective of this treatment is to reduce pain and stimulate healing of the affected area. The acoustic waves travel through fluid and soft tissue, and their effects occur at sites where there is a change in impedance, such as the bone/soft-tissue interface.” (see LCD L38775)

If we look at CPT® category I codes, in physical medicine, there are no CPT® codes that accurately describe this service. However, ESWT is considered an “emerging technology” and therefore we must look to the Category III codes. Notably, CPT® has assigned multiple Category III codes to represent the service:

0019T – Extracorporeal shock wave involving musculoskeletal system, not otherwise specified, low energy
0101T – Extracorporeal shock wave involving musculoskeletal system, not otherwise specified, high energy
0102T – Extracorporeal shock wave, high energy, performed by a physician, requiring anesthesia other than local, involving lateral humeral epicondyle

Providers should then choose the Category III code that accurately describes the type of ESWT service being provided. While many insurers may not currently pay for this service as “experimental/investigational,” making sure that Providers use the Category III code can help identify “clinical efficacy, utilization, and outcomes” for this new technology. This has the potential to positively affect future reimbursement policies. It should also be noted that Medicare Administrative Contractor (MAC), Novitas, includes 0101T on its fee schedule (non-facility amount of $338.72).

This could be an indication of this service becoming more widely used and accepted in “contemporary medical practices” and can be useful for Personal Injury reimbursement.

Conclusion

The emergence of new devices and technologies in healthcare presents both opportunities and challenges for Providers. Accurate coding is essential for proper compliance and securing payment and ensuring that these innovations are tracked within the healthcare system. By adhering to CPT® coding guidelines and understanding the importance of precise coding, Providers can contribute to the evaluation of healthcare delivery and the development of policies that support the adoption of new technologies.

This approach not only facilitates proper/future reimbursement but also promotes the advancement of new technologies and improvements in patient care.

About the Author

David Klein, CPC, CPMA, CHC, is the ANJC’s coding and compliance consultant. He is the co-founder of PayDC, a web-based Electronic Health Records Practice Management system that focuses on compliance and reimbursement. He is a certified professional coder through the American Academy of Professional Coders (AAPC) and is certified in healthcare compliance through the Health Care Compliance Board (HCCB).

He is also the Founder and President of DK Coding & Compliance, Inc. a health care consulting firm that focuses on audit defense, education, compliance & reimbursement issues.