Digitization of glass microscope slides enables remote examination by the pathologist and/or in conjunction with the use of artificial intelligence (AI) algorithms. Category III codes are temporary use codes that identify emerging technology and are used to collect utilization data for the service or procedure(s). Beginning Jan. 1, 2023, Category III add-on codes were available to designate the clinical work and resources associated with digitization of slides for surgical pathology procedures and stains. Effective January 1st, 2024, there are 30 new Category III codes applicable to GYN and non-GYN cytology procedures.
Digital pathology is described by the AMA as “…the acquisition, management and interpretation of pathology information generated from digitized glass microscope slides.” These designated “add-on” Category III codes, if reported, must be reported in conjunction with the associated primary CPT service code. Only report the Category III code if the digitized image is utilized for a medically necessary primary interpretation. These codes should not be used when slide digitization is solely for archival or educational purposes, or clinical conference presentations.
The Medicare Physician Fee Schedule categorizes the digital pathology codes as “Technical Component Only” services (TC/PC indicator = 3). There is not a separate professional component associated with the process for digitization of the glass slide. Medicare guidance instructs that modifiers 26 and TC will not be used when billing these codes. Cost associated with tissue processing, staining and examination are associated with the primary CPT code (e.g., 88305) which, if appropriate, may be split to represent technical (TC) and professional (-26) components of the diagnostic service or will be billed as a global charge. To establish a rationale price, cost considerations for the digitization process should include labor, equipment and department overhead. Consider the cost of data retention, data management as well as labor cost to manage and operate the scanner. Another consideration is the average cost per billed unit of service. Remember, one Level IV tissue examination (88305 x1) may have three H & E stains associated and the price of that single unit billed for 0753T may represent the cost of three digitized slides.
Claim submission for digital pathology services are impacted by the National Correct Coding Initiative (NCCI) edits for Add-on Codes (AOC) and the MUE/MAI daily allowed limit for billable units of service. The 2024 update to coding guidelines published by the AMA addressed reporting units of service for the add-on codes as “each add-on code is reported as a one-to-one unit of service for each primary pathology service code.” Effective April 1, 2024 MUE values for 0751T-0763T are revised to align with the MUE of the associated primary CPT. As of April 1, 2024, no published MUE values are available for codes 0827T – 0856T. With an MAI of ‘2, the MUE value is stated to be based on Code Descriptor/CPT Instruction which would not allow for the billing entity to appeal.
In 2025, it continues to be necessary to closely monitor payer guidance and NCCI policy for reportable units of service to determine if the MUE edits will be adjusted based on the AMA coding guidelines. Reimbursement rates are not published on the Medicare Physician Fee Schedule as the rates will be established at the MAC level for each region. The codes do not have a published RVU. Under the Outpatient Perspective Payment System (OPPS) for hospital-based pathology services, the Category III codes may be reported on the outpatient claim with reimbursement packaged (SI = N). With proper reporting of a rational and defensible charge amount, the billing entity will contribute to the data collection and assessment of clinical utility which will help payers to establish payment.
As a service that is submitted on a claim it remains necessary to ensure the billed line item is adequately supported by documentation in the patient’s medical record. Adoption of the codes for billing is a necessary step in order to demonstrate the use of digitization of slides in clinical practice. Do note that effective February 2024 some Medicare contractors will no longer consider the Category III codes for digital pathology for separate payment and instead will designate the codes for “tracking purposes only”. Please review this table for code, description and guidance on reporting services associated with digital pathology.