Skip to main content
Premium Trial:

Request an Annual Quote

Poorly Understood, CPT Caught Between Innovators and Regulators


At A Glance

Name: Tracy Gordy

Title: Chairman, American Medical Association’s current procedural terminology editorial panel

Background: Was member of the editorial panel for 9 years; was in private practice in Austin, Texas.

Education: MD, University of Texas, Medical Branch; certified in psychiatry

Age: 68


The current procedural terminology book gets no respect. Detractors claim that the medical reimbursement landscape in the United States today is not well suited for many emerging molecular diagnostics products, and that the chief culprit is the CPT code book.

Conventional wisdom has it that this system, overseen by a group of American Medical Association editors, may also exert financial pressure on innovators by discouraging payors from reimbursing physicians or patients who use their products.

But is this CPT system really to blame? SNPtech Pharmacogenomics Reporter caught up recently with the chairman of the AMA panel that oversees its contents.

Some researchers, especially pre-clinical or even clinical scientists, may not know what CPT codes are, and that what is in them may predict whether a technology or application they are working on will be paid for by insurance companies. Tell me a little bit about the CPT book. How does a technology become a full-fledged code?

A CPT code can be submitted to the panel by an American Medical Association member, a specialty society, or a manufacturer. The code, as it’s submitted, is to describe the work that a physician does. … The panel evaluates the merit of the code as to whether or not it is a local code — that is to say, one that is used only in one region by a very small number of people. This is not likely to get a code; we are looking for a code that can be used by the majority of the providers in the country, and without being regionally or generically located to [address] just a small subspecialty of people that no one else can use.

The code should not overlap with any other code that is in the book, and it should not have any proprietary relationship. Then, the code, if it’s accepted by the panel, is submitted back to the specialty society that will use it, [or] any other specialty societies that will perhaps use it. They will survey it and arrive at a relative value for it as compared with the family of codes it will join. That’s then submitted to the Relative Value Update Committee, or RVUC [pronounced ‘ruck’], which is composed of three AMA members — the president, vice president, and a representative of the CPT panel — and the rest are the specialty societies that hold a seat in the House of Delegates for the AMA. They decide if the merits warrant a certain relative value as compared to the family of codes it is going into, and they then will submit that value ... as a recommendation. The Centers for Medicare and Medicaid Services will then decide whether they will accept that value, and if they do, they publish it in the Federal Register in late October or early November as the value that will be used in the following year. Many proprietary companies key off of that also.

We have three sets of codes. This described a category one code. A category two code really has no value; it basically is used for reporting purpose.

A category three code is for emerging technologies. Let’s assume that there is an instrument that a company wants health-care providers to use, but it has not yet obtained [US Food and Drug Administration], but it is likely to win FDA approval, but nobody knows how much this instrument is going to be used.

The panel can put this product as a category three code. … Unlike the CPT manual, which comes out once a year, category three codes are posted in January and July on the AMA’s CPT website. Now, these products do not have a value assigned to them; they can be carrier priced. I guess the thing to understand is, just because you get a CPT code, first of all, it may not be valued by the RVUC — therefore, it never goes to Medicare, and it never gets a Medicare number. Having a code does not guarantee payment.

A category three code is put there to gather data. Once that data is there, it can be brought back to the panel with the new data and the FDA certification, and it can be upgraded to a category one code.

How long does it take for a code to become approved as a category one?

Let me illustrate it for you. The panel met in February for the 2005 book. So the only thing that can happen between now and 2005 is that we can make some editorial changes in May that we might have incorrectly stated, or maybe we didn’t put the right parenthetics [other reference codes] in, or something of that nature. Basically, the 2005 book will be put to bed in May or June. The values for all those codes are evaluated and are accepted by CMS in roughly September, which is why they publish it in late October, early November. The panel meets in May of this year, will meet again August, again in November, and again in February for the 2006 cycle.

A code can potentially appear this May, but would not actually get into the book until 2006. Likewise, it could be heard at the February 2005 meeting and would be in the 2006 book.

Beside geography, what are some factors that might prevent a product or applications from obtaining a CPT code?

Most of the time, the reason is because it is not used universally. Also if we get all negative responses from our advisors that a code is not worthwhile, the panel is not likely to accept it. The panel’s ear is turned to what the advisory staff says. Lobbying an individual panel member is not likely to get anybody anywhere.

Will a blessing from a specialty society seal the deal?

A blessing from a specialty society won’t seal a deal, but it will go a long way toward ensuring that a code will be accepted. What we encourage is for an individual or a manufacturer to go to the appropriate specialty society and enlist their help. If someone came to us with a code, and they had the support of one or two specialty societies, the panel will look upon that with a great deal of favor.

Some individuals and manufacturers have been critical of the AMA panel, claiming it is too slow to get new codes into the book, or that it is behind the flow of new and emerging technologies. What’s your take?

It really is a function of the collaboration between the AMA and CMS. CMS has told us that they do not have the capability of evaluating the RVUC values [except] on a yearly basis. If you can’t put a code in a book that hasn’t been evaluated by the RVUC, then you’re really outing at risk everybody who wants to use it. If it were up to the CPT panel — we publish the category-three codes twice a year, so we can do the category-one codes the same way. But, the category-one codes must be valued by CMS. It’s that level that causes us to do this only once a year.

How would say the CPT code treats certain technologies — say, molecular diagnostics, or other pharmacogenomics tools or applications? Is the CPT code up to date with its codes for these technologies, or is there a backlog?

Actually, that probably runs the smoothest. There are two reasons: One is that, not only are the codes reviewed by the specialty society, but we have a special panel of pathologists that come from different disciplines in pathology — from clinical pathology to anatomical pathology. We have a panel with people with some genetics backgrounds. And that panel also makes a recommendation to the CPT panel. Then, the lab codes have their own fee schedule, so they don’t even go to the RVUC; they go straight to CMS.


Filed under

The Scan

Drug Response Variants May Be Distinct in Somatic, Germline Samples

Based on variants from across 21 drug response genes, researchers in The Pharmacogenomics Journal suspect that tumor-only DNA sequences may miss drug response clues found in the germline.

Breast Cancer Risk Gene Candidates Found by Multi-Ancestry Low-Frequency Variant Analysis

Researchers narrowed in on new and known risk gene candidates with variant profiles for almost 83,500 individuals with breast cancer and 59,199 unaffected controls in Genome Medicine.

Health-Related Quality of Life Gets Boost After Microbiome-Based Treatment for Recurrent C. Diff

A secondary analysis of Phase 3 clinical trial data in JAMA Network Open suggests an investigational oral microbiome-based drug may lead to enhanced quality of life measures.

Study Follows Consequences of Early Confirmatory Trials for Accelerated Approval Indications

Time to traditional approval or withdrawal was shorter when confirmatory trials started prior to accelerated approval, though overall regulatory outcomes remained similar, a JAMA study finds.