FDA Update July 17, 2018

CPT Codes

Current Procedural Terminology (CPT) codes are a proprietary 5-digit numeric coding system that is owned, managed, and maintained by the American Medical Association (AMA). They are used to describe office visits and medical and surgical procedures performed by physicians and other health care professionals. Decisions regarding the application for a new CPT code are made solely by the AMA on an annual basis. Applicants may be invited to participate in open CPT Editorial Panel meetings and present the reasons why a new code is needed.

The CPT application process for a new code involves not only filling out an application form, but also many other activities. Realize that, if you are granted a new CPT code, this does not mean that the procedure will be covered and paid for by insurers.

It’s simple. Even though your novel and unique medical device is breakthrough technology, sometimes there is no existing CPT code whose description exactly matches its associated procedure. For physicians and other providers of care to bill payers to obtain payment, one requirement is that there must be an existing CPT code which they can place on a claim billing form. Without a CPT code for billing, they will not perform the procedure using your new medical device because they will not get paid. If such is the case, manufacturers must obtain a new CPT code from the AMA. To obtain a new CPT code, the application must include a well-conducted clinical study, preferably a randomized controlled clinical trial, showing evidence that the procedure is effective and results in improvement in the patients’ clinical conditions, as compared to the standard of care currently being used. After applying for a new CPT code, it can take up to 1 to 2 years before a decision is made. In the meanwhile, if there is no assigned CPT code, the provider can use the most appropriate unlisted code and provide a detailed operative note explaining the work involved in the procedure. New CPT codes are issued in the fall of each year and become effective the following January.

Although manufacturers often initiate the application process, CPT applications are rarely accepted without the endorsement or sponsorship of the appropriate medical specialty society and Key Opinion Leaders (KOLs). The Society can write a request to the AMA detailing the need for a new CPT code. It is imperative that you develop relationships with both early in the game. MDI Consultants can not only help you gain FDA approval, which is required for a new code, but also provide you with a comprehensive report detailing all that is necessary to obtain a new CPT code, provide you with the application form, recommend the best clinical trial design and guide you through the entire process. Don’t try to do it yourself because it is somewhat complicated.

Hope this helps,

Alan Schwartz