Does Medicare pay for category III codes?

Medicare payment for Category III CPT codes is limited and varies, generally Medicare does not routinely pay for Category III codes because they are temporary codes for emerging technology, services, and procedures that are not yet proven effective or FDA approved, but there are exceptions where local contractors may cover them with documentation. Category III codes are T-codes for tracking, such as 0402T, used to collect data on new procedures like new robotic surgeries or genetic tests. Medicare's general policy is that Category III codes are not separately payable under Physician Fee Schedule as they are considered investigational, however Medicare Administrative Contractors can make local coverage determinations to pay if procedure is deemed reasonable and necessary with sufficient evidence. Some Category III codes are paid in hospital outpatient setting under OPPS with status indicator. Providers who perform Category III procedures often need to submit additional documentation, letters of medical necessity, and sometimes obtain prior authorization, and may need to bill with Category I unlisted codes instead. For patients, this means you may be responsible for payment if Medicare denies. Private insurers similarly often deny Category III codes as experimental. If you are considering procedure with Category III code, ask provider to check Medicare LCD for your region and obtain advance beneficiary notice. Unlike Category II codes which are quality tracking and not paid, Category III codes may occasionally be paid but coverage is not guaranteed and requires appeal and evidence.