May 3, 2023

How a CPT® Code Becomes “Real”: Implications for the New Psychedelic Medicine CPT® Codes

Written by

Carlene MacMillan, MD

One of my favorite childhood books growing up was The Velveteen Rabbit. Specifically, this famous passage:

The Velveteen Rabbit

"It doesn't happen all at once" is also true of CPT® billing codes for treatments we offer to our patients. Let's dive down the rabbit hole of how psychedelic CPT codes came to be and what it means for mental healthcare.

New CPT® Code for Psychedelic Therapies

Recently, we learned that the American Medical Association is issuing a new Current Procedural Terminology (CPT®) III code for psychedelic therapies. The code will be for “Continuous In-Person Monitoring and Intervention during Psychedelic Medication Therapy.”

Understanding the Complexity of CPT® Codes

So, great news, right? When psychedelic medicine treatments gain FDA approval in the coming years, this means insurance will cover them, right? Well, I wish it was that simple. It is essential we understand that there is a long road ahead in order for there to be widespread adequate insurance coverage of these breakthrough treatments and that a CPT® III code is just the first step.

Different Categories of CPT® Codes

There are three different categories of CPT® codes. Category I codes are the type we are most familiar with and use for insurance reimbursement. We do not need to worry about Category II codes with respect to psychedelic medicine right now as these are not billing codes and track performance measurements. A Category III code, which is what the psychedelic therapy code is, is considered to be experimental. The key differences between Category I and Category III CPT® codes are as follows:

Category I CPT® codes:

  1. These codes represent well-established and widely accepted medical procedures, services, and interventions that are performed by healthcare providers. Standard psychotherapy codes like 90834 (45 minute psychotherapy) and evaluation and management codes like 99214 are Category I codes.
  2. These codes have a strong evidence base, including clinical studies and literature supporting their safety, effectiveness, and clinical outcomes.
  3. Reimbursement from insurance companies and government programs, such as Medicare and Medicaid, is typically associated with Category I codes. Most are assigned a fee known as a Relative Value Unit (RVU).

Category III CPT® codes:

  1. These codes represent emerging technologies, services, and procedures that may not yet have widespread acceptance or a strong evidence base.
  2. These codes are used to track the utilization and outcomes of new services and procedures, allowing for data collection and analysis.
  3. Reimbursement for Category III codes is often limited or may not be available, as insurance companies and government programs may consider these services experimental or investigational. There are no RVUs assigned to these codes so they have no pricing information.

That last difference is crucial: No CPT® I code, no coverage, except in rare cases where a particularly forward thinking payer reaches an agreement with a practice in contracting to cover them at their discretion. Enthea, a Public Benefit Corporation focused on getting psychedelic therapies covered by self-funded employer groups, could theoretically use these codes once they are active in 2024 and once the FDA grants approval to the treatments. Then again, they make their own coverage policies and do not really need these codes the same way we need Medicare, Medicaid and all the major payers to have them as a standard part of fee schedules.

The Journey from Category III to Category I

So how does a Category III code grow up to become a Category I code? Codes can be Category III codes for 5 years but could be made into a Category I code sooner, or not at all. There is a predictable pathway that can take quite some time and there is no guarantee that the code will “graduate” to become a Category I code:

  1. Accumulation of evidence: The new technology, service, or procedure must demonstrate a strong evidence base, including clinical studies and peer-reviewed literature, to support its safety, effectiveness, and clinical outcomes.
  2. Widespread acceptance: The procedure or service should gain widespread acceptance among healthcare practitioners, indicating its value and applicability in clinical practice.
  3. Review by the CPT® Editorial Panel at their annual meeting. The AMA's CPT® 17 member Editorial Panel reviews the new technology, service, or procedure and evaluates whether it meets the criteria for inclusion in the Category I code set. This includes a thorough review of the evidence base, clinical outcomes, and the procedure's utility in clinical practice.
  4. Approval and integration: If the CPT® Editorial Panel determines that the service or procedure meets the criteria, it will approve the change and integrate the new code into the Category I CPT® code set during the next annual update.
  5. Assignment of Value: The new code is finally referred to the AMA/Specialty Society Relative Value Update Committee (RUC) who will use available data to assign a RVU to the code based on how much work is involved in the service the code represents. The RUC has representatives from various professional medical societies, including the American Psychiatric Association.
  6. Coverage Decision: A new Category I code does not automatically guarantee payer coverage but most payers will then begin to write coverage policies on when the code is medically necessary and decide how much they will reimburse it for based on the number of RVUs it is assigned.

Implications and Actions for Clinicians and Patients

So what does this mean for clinicians, patients and other stakeholders advocating for widespread access to psychedelic medicine? It means that we have a long road ahead and it is critical that those of us planning to adopt these treatments take a number of key actions:

  • Collect real-world evidence in a structured way on how the treatments are working and use the Category III codes to identify that we are utilizing them. Osmind is purpose-built to integrate breakthrough mental health treatments and will be ready to serve as a technological infrastructure to help facilitate this process, as it has done with Spravato®.
  • Join and become involved in professional societies like the American Psychiatric Association who have representation on the AMA’s CPT® Editorial Panel and RUC Committee and encourage them to advocate for the successful implementation of the new code(s). Apply to join workgroups thinking through new codes if they are seeking members.
  • Understand the intricacies of treatment delivery: Crucially, if the code becomes a Category I code, we need the RUC to understand what is entailed in delivering these treatments, which are multiple hours with multiple facilitators present and other monitoring services. If the code does not get assigned an adequate RVU, clinicians will not be able to use it and keep the (dimly lit, ambient) lights on to offer these treatments!
  • Advocate for coverage: Once these treatments gain FDA approval, patients and employer groups who purchase health insurance for their employees should start telling the payers early and often that they want these to be medically necessary covered services because of how life-saving and transformative they can be.

Conclusion: The Need for Systemic Engagement (Set, Setting, and Systems)

I have long been saying that when it comes to the mainstream adoption of psychedelic medicine, we need to not just focus on “set and setting” but systems as well. The CPT coding system, as byzantine as it may seem, is an essential system we must understand and engage with in order to truly see these treatments gain the traction they deserve.

Thank you to MAPS and COMPASS for leading the charge (no pun intended to all the billers out there)!

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