The healthcare industry is abuzz as hospitals and health systems intensify their calls for the Centers for Medicare & Medicaid Services (CMS) to eliminate the use of “temporary CPT codes” for non-physician services. Providers argue that these codes create unnecessary administrative burdens and payment delays, complicating billing processes at a time when operational efficiency is more critical than ever.
In this article, we’ll break down why hospitals are making this push, what temporary CPT codes are, and what the potential policy changes could mean for your healthcare organization.
What Are Temporary CPT Codes?
Temporary CPT codes, often referred to as Category III codes, are designed to capture emerging technologies, services, and procedures that do not yet have a permanent code. While these codes provide a way to track the utilization of new services, they are often non-reimbursable or reimbursed inconsistently across payers.
Hospitals have voiced concerns that when temporary codes are applied to non-physician services—such as therapy, nursing, or care coordination—it creates a murky billing environment. Providers must grapple with:
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Inconsistent payer policies
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Uncertain reimbursement timelines
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Additional administrative overhead for claims management
Why Hospitals Want CMS to Act
Hospitals assert that temporary CPT codes were never intended to be a long-term solution for non-physician services. They argue that CMS’s continued reliance on these codes:
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Creates financial risk: Billing for services that may never receive reimbursement jeopardizes cash flow and revenue cycle stability.
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Increases administrative burden: Staff must spend extra time researching payer rules and handling denials or resubmissions.
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Stalls innovation: Providers may hesitate to offer new or enhanced services if payment is uncertain.
In recent public comments to CMS, several leading hospital associations emphasized that non-physician services are critical to value-based care initiatives. Therefore, they deserve a more stable, predictable billing and payment structure.
Potential Impact on Healthcare Providers
If CMS agrees to phase out temporary CPT codes for non-physician services, the effects could be significant across the industry. Hospitals and other providers could benefit in several ways:
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Streamlined Billing: Permanent CPT codes would offer more clarity and consistency in claims processing.
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Faster Reimbursement: With recognized codes in place, payers could process claims more efficiently, improving cash flow.
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Encouragement of New Services: Providers might feel more confident adopting innovative non-physician services, knowing reimbursement would be more straightforward.
However, there is also caution. Transitioning services to permanent CPT codes takes time, and if not handled properly, could create temporary gaps in coding and payment.
What Comes Next?
CMS has acknowledged the concerns but has not yet committed to a formal change. Industry experts predict the issue could be addressed in the upcoming 2026 Medicare Physician Fee Schedule rulemaking cycle. Hospitals and stakeholders are encouraged to submit comments and participate in upcoming CMS forums to ensure their voices are heard.
In the meantime, healthcare organizations should:
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Stay informed about CMS announcements
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Review coding practices for non-physician services
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Prepare for potential shifts in billing and compliance requirements
Conclusion
The push to eliminate temporary CPT codes for non-physician services highlights the growing need for modernized billing practices that align with today’s healthcare realities. Hospitals are advocating for solutions that reduce complexity, enhance efficiency, and support innovation—priorities that will ultimately benefit providers and patients alike.
Stay tuned as CMS evaluates this critical issue and healthcare leaders continue to advocate for necessary reforms.