Are you aware of Medicare’s directive that once a Current Procedural Terminology (CPT®) code becomes effective, you must use it? Do you realize that Category III CPT codes are released twice a year, with a midyear implementation date? Now is the time to start preparing your internal processes for the new Category III codes applicable in orthopaedics that were released by the American Medical Association (AMA) in July 2008, with an effective date of January 2009.


Published 11/1/2008
Mary LeGrand, RN, MA, CCS-P, CPC

Category III code updates

Get ready to use these updated spine codes

What’s a Category III code?
Category III codes, also known as “emerging technology” codes, were first introduced in 2002. These codes are alpha-numeric codes (such as 1234T) and are found in a tabbed section following the Category I and II codes in the 2008 CPT Professional Edition. You can also access them online (

Category III codes are temporary codes. These codes, unlike Category I codes, are listed in numeric order, not by anatomic location. After 5 years, if an emerging technology code is not accepted for placement in the Category I section of CPT, it may be renewed for another 5 years by action of the CPT Editorial Panel or it will automatically sunset and be removed from the CPT book.

When the AMA first introduced Category III codes, it indicated these new codes were intended to be used for data collection purposes (to substantiate widespread usage as well as for use in the Food and Drug Administration [FDA] approval process). As such, Category III CPT codes may not conform to the following usual CPT code requirements:

  • The service/procedure must be performed by many healthcare professionals across the country.
  • FDA approval must be documented or be imminent within a given CPT cycle.
  • The service/procedure has proven clinical efficacy.
  • The service/procedure must have relevance for research, either ongoing or planned.

The intent of Category III codes is to allow physicians, insurers, researchers, and policy experts to evaluate emerging technology services and procedures for clinical efficacy, utilization, and outcomes. Emerging technology codes, in many circumstances, replace unlisted codes that were previously used to report these services.

New codes every 6 months
The AMA updates the Category III codes every 6 months, typically releasing new codes in January for July implementation, and in July for implementation the following January.

According to the AMA Web site, two new Category III spine codes were released on July 1, 2008. They will become effective on January 1, 2009, and will be found in the Category III Appendix of the 2009 CPT Manual.

The two new codes are as follows:

  • 0195T—Arthrodesis, pre-sacral interbody technique, including instrumentation, imaging (when performed), and discectomy to prepare interspace, lumbar; single interspace
  • 0196T—Each additional interspace (List separately in addition to code for primary procedure)

Action steps for your practice

  • Do not use a Category I or unlisted procedure code if there is a Category III code. According to the AMA, it is inappropriate to use an unlisted procedure code or Category I CPT code if a Category III code exists.
  • Pre-authorize elective surgical cases with the payor to determine if payor will reimburse for procedure.
  • Obtain an advance beneficiary notice (ABN) from the patient to indicate that the patient has been informed about his or her financial responsibility.
  • Copy the patient on the pre-authorization letter, explaining to the payor that the patient needs to know his or her financial responsibility before proceeding with the surgery or procedure.
  • Determine your fee schedule for the Category III code using the same methodology as for unlisted procedures.
  • Identify a base code that is most like the Category III code.
  • Compare the preoperative, intraoperative, and postoperative services of the Category III procedure to the base code.
  • Identify several factors that differentiate the services (more difficult or less difficult).
  • Use the identified factors to determine your fee. If the Category III procedure is more difficult, increase your fee appropriately from the fee of the base code. If it is less difficult, lower your fee from the base code.
  • After the procedure, submit your operative note with the claim form and a cover letter explaining the procedure and include the preauthorization approval.
  • Watch your reimbursement closely.
  • Appeal all denials where prior authorization was obtained. You should also appeal all denials if payment is denied because the service was reported using the Category III code but the service was previously reimbursed when an Unlisted Procedure code was reported.

Mary LeGrand, RN, MA, CCS-P, CPC, is a consultant with KarenZupko & Associates. The information in this article has been reviewed by members of the AAOS Coding, Coverage, and Reimbursement Committee. If you have coding questions or would like to see a coding column on a specific topic, e-mail