Billing & Coding: What to Know About New Category III CPT Codes for Digital Pathology

Billing and coding of digital pathology services can be quite challenging. A recent G2 Intelligence webinar discussed the newly introduced Category III Current Procedural Terminology (CPT) codes that identify digitization of patient pathology samples.¹ The new codes have garnered attention as a future mechanism for additional reimbursement and thus deserve further discussion.

Digitization of Pathology and Its Benefits

Glass microscope slides with prepared and stained tissue samples may be microscopically captured by a whole slide scanner. The captured images may then be viewed using software that allows for navigation of the slide(s) for pathologic analysis. The images may be digitally stored in the internet “cloud” or on a computer server. While the initial cost of a digital system may approach up to $300,000, the resulting benefits yielded over time and utilization may more than offset these costs. Such benefits include:

• Portability—digital images may be transported electronically (while glass slides may be mailed, they’re at risk of breakage)
• Enables remote access for purposes of pathology interpretation, second opinions, and telemedicine
• The use of algorithms may be incorporated for artificial intelligence (AI)-driven data management
• Digital images are larger and clearer than a microscopic field, which also allows for more ergonomically friendly analysis, e.g., by eliminating the need for squinting and back bending over a microscope
• Can enhance efficiency in time, cost, turnaround, and collaboration

Coding of Digital Pathology Services

As noted above, the American Medical Association (AMA) has added a new heading in the Category III section of CPT to define digital pathology digitization procedures. The 13 new codes are considered add-on codes; they are reported when the digitization procedure of glass microscope slides is performed in conjunction with the Category I code for the primary service.² Example: If a colon biopsy is digitized, CPT 88305 is reported for the primary service and in conjunction with Category III 0753T.

Here are the new Category III codes, which became effective on January 1, 2023:

The Category III codes for digital pathology accompany the technical component of the primary service. Modifiers aren’t needed because the codes identify the additional clinical staff work and service requirements associated with digitizing glass microscope slides.

When You Should Not Use the New Codes

The AMA indicates that these new Category III digital pathology codes should not be reported:³

• Solely for archival purposes, such as where after the Category I service has already been performed and reported;
• Solely for educational purposes, for example, when services aren’t used for individual patient reporting;
• Solely for developing a database for training or validation of AI algorithms; or
• Solely for clinical conference presentations (e.g., tumor board interdisciplinary conferences)

Reimbursement Issues

The AMA explains that Category III codes represent a set of temporary codes for emerging technology, services, procedures, and service paradigms.⁴ These codes allow data collection for the listed services/procedures. Use of unlisted (miscellaneous) codes doesn’t offer the opportunity for the collection of specific data. Thus, if a Category III code is available, you should report that code instead of a Category I unlisted code.

These codes are published and monitored for utilization over a five-year period. If the codes are not reported during this time frame, they’re archived and no longer available for reporting. Bottom Line: It’s important that the codes be utilized for retention purposes and transition to a Category I code.

Unfortunately, Category III codes aren’t typically recognized for reimbursement. Many payers have established policies that don’t allow coverage of Category III codes. Medicare Administrative Contractors (MACs) have discretion to determine an allowable payment for these codes. But these digital codes aren’t listed in the Clinical Laboratory Fee Schedule (CLFS). The Hospital Outpatient Prospective Payment System (HOPPS) file does include the codes, but they’re associated with a Status Indicator “N,” which means that there’s no separate reimbursement; the codes are instead bundled into the payment for a primary service.

Labs and other providers may wonder whether National Correct Coding Initiative (NCCI) edits or Medicare NCCI Medically Unlikely Edits (MUEs) exist for the digital pathology codes, but there were none listed at press time. The primary CPT code would dominate these edits were they to be created.

References:

1. https://www.g2intelligence.com/whats-new-in-23-for-laboratory-coding-billing/
2. https://www.ama-assn.org/system/files/may-2022-cpt-summary-panel-actions.pdf
3. https://www.cap.org/advocacy/payments-for-pathology-services/2023-digital-pathology-codes
4. https://www.ama-assn.org/system/files/cpt-category3-codes-long-descriptors.pdf

________________________________________________________________________________________________________________________________________

Diana W. Voorhees, MA, CLS, MT, SH, CLCP, CPCO, is the principal of DV & Associates, Inc., Salt Lake City, UT. DV & Associates makes no representation, guarantee, or warranty, expressed or implied, that the information provided is free of error, and bears no responsibility or liability for results or consequences of its use.