Category III codes were developed to track the utilization of emerging technologies, services, and procedures. The Category III code description does not establish a service or procedure as safe, effective or applicable to the clinical practice of medicine.

Unless a medical policy is published to address coverage for a specific Category III code, all services and procedures listed in the current and future Category III code list will be considered investigational and therefore, not medically necessary. A provider cannot bill the member for the denied service unless the provider has given advance written notice, informing the member that the service may be deemed not medically necessary and providing an estimate of the cost. The member must agree in writing to assume financial responsibility, in advance of receiving the service. The signed agreement, in the form of a Pre-Service Denial Notice, should be maintained in the provider's records.

Section 1862(a)(1)(A) of the Social Security Act is the basis for denying payment for types of care, specific items, services, or procedures, not excluded by any other statutory clause, meeting all technical requirements for coverage, but are determined to be any of the following:

• Not generally accepted in the medical community as safe and effective in the setting and for the condition for which it is used;
• Not proven to be safe and effective based on peer review or scientific literature;
• Experimental;
• Not medically necessary in the particular case;
• Furnished at a level, duration or frequency that is not medically appropriate;
• Not furnished in accordance with accepted standards of medical practice; or
• Not furnished in a setting (such as inpatient care at a hospital or SNF, outpatient care through a hospital or physician's office or home care) appropriate to the patient's medical needs and condition.

Items and services must be established as safe and effective to be considered medically necessary. That is, the items and services must be:

• Consistent with the symptoms or diagnosis of the illness or injury under treatment;
• Necessary for, and consistent with, generally accepted professional medical standards of care (e.g., not experimental or investigational);
• Not furnished primarily for the convenience of the patient, the attending physician or other physician or supplier;
• Furnished at the most appropriate level that can be provided safely and effectively to the patient.

Medical devices that are not approved for marketing by the Food and Drug Administration (FDA) are considered investigational and are not considered reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve functioning of a malformed body member. Program payment, therefore, may not be made for medical procedures and services performed using devices that have not been approved for marketing by the FDA or for those not included in an FDA-approved investigational (IDE) trial.

NOTE:

This policy is designed to address medical guidelines that are appropriate for the majority of individuals with a particular disease, illness, or condition. Each person's unique clinical circumstances may warrant individual consideration, based on review of applicable medical records.

Provider News

04/2011, Denial reason changing for selected services
08/2011, Denial reason changing for certain Medicare Advantage services

Title XVIII of the Social Security Act, Section 1862(a)(7). This section excludes routine physical examinations.

Title XVIII of the Social Security Act, Section 1862(a)(1)(A) states that no payment shall be made for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury.

Title XVIII of the Social Security Act, Section 1833(e) states that no payment shall be made to any provider for any claim that lacks the necessary information to process the claim.