We sometimes hear from medical device companies that they have a medical code because there is a CPT or HCPCS code that “almost exactly” describes their technology or is used by another company with “very similar” but older technology.
This is a compliance nightmare. CPT and HCPCS guidelines make clear that a technology must meet all the requirements of code to use it. And there have been recent enforcement actions against use of slightly mismatching codes. When there is no code directly on point, it is far better to use a miscellaneous code than take the risk of using a code that is arguably “close enough.” And innovators can generate significant revenue using miscellaneous codes.
Why codes must fit fully
The Current Procedural Terminology (CPT) codebook contains over 1,000 pages of highly detailed guidelines and codes for procedures and services performed by physicians and other qualified healthcare professionals. Very small differences sometimes distinguish one code from another. For example, both CPT codes 76376 and 76377 are for image postprocessing, interpretation, and reporting, specifically “3D rendering with interpretation and reporting of computing tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under concurrent supervision.” But if the image postprocessing must be done on an independent workstation, then 76376 is the incorrect code and only 76377 may be used.
The instructions at the start of the CPT codebook make clear that you must select “the CPT code … that accurately identifies the procedure or service performed,” including based “all the language within a code descriptor.” The instructions emphasize: “Do not select a code that merely approximates the procedure or service provided.”
Healthcare Common Procedure Coding System Level II (HCPCS) codes are used primarily to identify products, supplies, and services not included in the CPT codebook, and they often apply to medical devices. Similar to CPT codes, HCPCS codes can be used only if they adequately describe the item or service being billed, including based on the code descriptor and other criteria stated in the code.
Recent enforcement trends involving mismatching codes
Recent federal enforcement actions have demonstrated that regulators continue to scrutinize coding and billing practices where the services, procedures, or technologies provided do not fully meet the requirements of the code billed. These actions have involved allegations ranging from the use of codes that did not accurately describe the underlying service to billing approaches that were inconsistent with coding guidelines or payer expectations. Even when providers or manufacturers believed an existing code was the “closest fit,” regulators have reinforced that reimbursement decisions must be based on what a code explicitly requires, not what it approximately describes. The resulting enforcement outcomes demonstrate that coding decisions are not merely technical exercises; they can carry significant financial and operational consequences, including multimillion-dollar liabilities, corporate integrity obligations, and heightened government oversight.
The federal government has also launched several new, cross-agency initiatives this year to detect and combat healthcare fraud using artificial intelligence and advanced data analytics. These include the White House Task Force to Eliminate Fraud chaired by Vice President J.D. Vance, the CMS’s Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative, and the Department of Justice’s Fraud Oversight through Careful Use of Statistics (FOCUS) initiative.
Compliant pathways
When a novel medical device does not fully align with an existing CPT or HCPCS code descriptor, the codebooks make clear that you should use miscellaneous codes until you have a code that does fit. Specifically, the CPT codebook says to “report the procedure or service using the appropriate unlisted procedure or service code.” And the HCPCS coding guidelines say to use miscellaneous/not otherwise classified codes when “there is no existing national code that adequately describes the item or service being billed.” These include, for example, C1889 (implantable/insertable device, not otherwise classified) and E1399 (durable medical equipment, miscellaneous).
How can the HcFocus team help?
HcFocus takes clients from strategy through execution, with decades of experience in market access and deep payer relationships. We work closely with innovators to obtain payer coverage and maximize reimbursement for medical technology, including medical devices and laboratory-developed tests. Whether a product is in early-stage development, preparing for launch, or already facing a reimbursement cutback, we build the client-specific strategy and hands-on execution needed to secure coverage and reimbursement. Reach out to schedule a strategy call.