*** This policy was implemented in the absence of National Coverage Determinations (NCD), Local Coverage Determinations (LCD) coverage criteria. This policy applies to all Blue Medicare HMO, Blue Medicare PPO, Blue Medicare Rx members, and members of any third-party Medicare plans supported by Blue Cross NC through administrative or operational services. ***

Description of Procedure or Service

Title XVIII of the Social Security Act SSA 1862(a) (1) (A) prohibits Medicare coverage for items and services which are not “reasonable and necessary” for the diagnosis and treatment of an injury or illness or to improve the functioning of a malformed body part. Medical necessity cannot be established if the safety and effectiveness of a device is unknown.

The Plan defines the terms "investigational" and/or "experimental" as medical, surgical, psychiatric, and other health care services, supplies, treatments, items, procedures, drug therapies, or devices that are determined by the Plan to be either:

1. A drug or medical device cannot be lawfully marketed without clearance or approval of the U.S. Food and Drug Administration, and clearance or approval for marketing has not been given at the time the drug or device is furnished; OR
2. Not generally accepted or endorsed by health care professionals in the general medical community as safe and effective in treating the condition, illness, or diagnosis in the setting for which their use is proposed; OR
3. The safety of the service for a person with a particular diagnosis or a particular condition has not been proven (e.g., research studies are currently evaluating the service and/or the manner in which it should be provided (in terms of type, frequency, extent, site, and/or duration), to ascertain the safety and effectiveness of the treatment on the well-being of a person with the particular diagnosis or condition).

Title XVIII of the Social Security Act (SSA)1862(a) (1) (A) prohibits Medicare coverage for items and services which are not “reasonable and necessary” for the diagnosis and treatment of an injury or illness or to improve the functioning of a malformed body part. According to the Medicare Claims Processing Manual, Chapter 23, §30.A, if a procedure or device lacks scientific evidence regarding safety and efficacy because it is investigational or experimental, the service is noncovered because it is not reasonable and necessary to treat illness or injury. Medical necessity cannot be established if the safety and effectiveness of a device is unknown.

Any request for health care services, supplies, treatments, items, procedures, drug therapies, or devices that are not covered in a National Coverage Determination (NCD), or Local Coverage Determination (LCD), or otherwise specified “covered” in the Medicare benefit manuals or other transmittals and/or have an unspecified code will have to be reviewed for medical necessity.

When determining a status of investigational/experimental, Blue Cross NC considers information from multiple sources, including but not limited to published, peer-reviewed literature; clinical practice guidelines published by consortia of medical organizations; commercial health technology assessment organizations such as Hayes, a symplr Offering; position statements from specialty and sub-specialty societies.

The American Medical Association (AMA) develops and maintains a set of temporary codes to track the utilization of emerging technologies, services, and procedures that are referenced as CPT Category III codes. The Category III code description does not establish a service or procedure as safe, effective, or applicable to the clinical practice of medicine. The AMA indicates that a Category III code will typically be archived within 5 years, and the description is either converted to a specific Category I code or should be reported with a Category I unlisted code. If a Category III code is available, it must be used instead of the unlisted Category I code. The use of the unlisted code does not offer the opportunity for collection of specific data. The American Medical Association (AMA) releases new codes twice a year in January and July.

Definitions

Food Drug Administration (FDA): The FDA is an agency within the U.S. Department of Health and Human Services. It oversees medical products, food and new drugs (among other duties) to protect the public health by assuring safety, effectiveness and quality of these products. Examples are cosmetics, dietary supplements and products that give off radiation, biologics, prescription drugs, veterinary products, medical devices, etc.

Category A (Experimental) Device: This is a classification assigned by the Food and Drug Administration (FDA) in which there are still questions of safety and effectiveness regarding a device. These devices are generally novel, first of-a-kind technologies in which the absolute risk of the device type has not been established.

*** Please refer to Special Notes section for additional information regarding Category A devices and CMS regulations.

Category B (Non-experimental/investigational) Device:  This is a classification assigned by the Food and Drug Administration in which the initial questions of safety and effectiveness of that device type have been resolved, for example, FDA premarket approval or clearance has been obtained.

Category III codes (or T codes): The American Medical Association (AMA) developed Category III CPT codes to track the utilization of emerging technologies, services and procedures. The assignment of a Category III code description does not establish a service or procedure as safe, effective, or applicable to the clinical practice of medicine, unless there is an NCD, LCD or a Medicare coverage article exist.

Reasonable and Necessary: Evidence exists to consider an item or service to be Reasonable and Necessary if it is:

• Safe and effective;
• Not experimental or investigational (Exception: routine costs of qualifying clinical trial services with dates of service on or after September 19, 2000 which meet the requirements of the Clinical Trials NCD are considered Reasonable and Necessary);
  and
• Appropriate, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is:
  • Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient's condition or to improve the function of a malformed body member;
  • Furnished in a setting appropriate to the patient's medical needs and condition;
  • Ordered and furnished by qualified personnel;
  • One that meets, but does not exceed, the patient's medical need; and
  • At least as beneficial as an existing and available medically appropriate alternative.

Routine Care Items and Service: Items and services that are otherwise generally available to Medicare beneficiaries (that is, a benefit category exists, it is not statutorily excluded, and there is no national noncoverage decision) that are furnished during a clinical study and that would be otherwise furnished even if the beneficiary were not enrolled in a clinical study.

Summary Statement

The Plan will review for medical necessity based on objective-evidenced based data.

Benefit Application

Please refer to the member’s individual Evidence of Coverage (EOC) for benefit determination. Coverage will be approved according to the EOC limitations if the criteria are met.

Coverage decisions will be made in accordance with:

• The Centers for Medicare & Medicaid Services (CMS) National Coverage Determinations (NCDs);
• General coverage guidelines included in Original Medicare manuals unless superseded by operational policy letters or regulations; and
• Written coverage decisions of local Medicare carriers and intermediaries with jurisdiction for claims in the geographic area in which services are covered.

Benefit payments are subject to contractual obligations of the Plan. If there is a conflict between the general policy guidelines contained in the Medical Coverage Policy Manual and the terms of the member’s particular Evidence of Coverage (EOC), the EOC always governs the determination of benefits.

Criteria Required for Coverage Approval

1. Medical director review.  
2. The Medical Director may base coverage on the following: 
   1. Review objective-evidenced based literature based on: 
      1. Studies from government agencies, i.e., the FDA; 
      2. Evaluations completed by independent technology assessment groups, i.e., BCBSA; 
      3. Well-designed controlled clinical studies that have appeared in peer review journals; 
      4. Review for like treatments or alternatives that are supported by peer review and the community pattern of medical practice. 
      5. An internal technology assessment may be completed.
3. Governmental approval of a service will be considered in determining whether a service is experimental or investigational. The fact that a service has received governmental approval does not necessarily mean that it is of proven benefit or appropriate or effective treatment for a particular diagnosis or for a particular condition.

When Coverage Will Not Be Approved

The Plan does not cover investigational or experimental medical and surgical procedures, equipment, medications, or cosmetic procedures that are not medically necessary and have not been strongly supported in research and for which there is a safe and medically accepted alternative available. 

Medical devices established by the FDA as Category A are considered investigational by the Plan. Generally, their safety and effectiveness have not yet been established and are not covered.

Billing/ Coding/physician Documentation Information

This policy may apply to the following codes. Inclusion of a code in the section does not guarantee reimbursement.

Applicable Codes: See procedure code(s) for specific procedure or service. List is located at Services and CPT codes | Providers | Blue Cross NC

The Plan may request medical records for determination of medical necessity. When medical records are requested, letters of support and/or explanation are often useful but are not sufficient documentation unless all specific information needed to make a medical necessity determination is included.

Special Notes

1. Category III codes that are covered in an NCD/ LCD may be considered for coverage based on medical necessity, but if they are deemed to be Investigational and/or Experimental codes will require Medical Director review. When there is lack of a Medicare coverage criteria or a policy, then the Plan will review for medical necessity based on objective-evidenced based data such as but not limited to: Studies from government agencies (as FDA); Evaluations performed by independent technology assessment groups (i.e., BCBSA or BCBSNC); or well-designed controlled clinical studies that have appeared in peer review journals.
2. Medical and Scientific Evidence is defined by the Plan as one of the following:
   1. Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff.
   2. Published peer-reviewed literature or biomedical compendia from such sources as the National Institute of Health’s National Library of Medicine or The Cochrane Library.
   3. An accepted indication for treatment in one of the following standard reference compendia:
      • The American Hospital Formulary Service-Drug Information
      • The American Medical Association Drug Evaluations
      • The American Dental Association Accepted Dental Therapeutics
      • The United States Pharmacopoeia Drug Information
   4. Findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes including the:
      • U.S. Department of Health and Human Services
      • Federal Agency for Healthcare Research and Quality
      • National Institutes of Health • National Cancer Institute
      • National Academy of Sciences • Center for Medicare and Medicaid Services, and
      • Any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services.
        • The Plan is responsible for routine care of items and services in CMSapproved Category A and Category B IDE studies.
3. Routine care items and services refers to items and services that are otherwise generally available to members (that is, a benefit category exists, it is not statutorily excluded, and there is not a national non-coverage decision) that are furnished during a clinical study and that would be otherwise furnished even if the member were not enrolled in a clinical study.
4. The local Medicare Administrative Contractor with jurisdiction over the Plan’s service area determines coverage of IDE studies.
5. Effective January 1, 2015, a listing of all CMS-approved Category A IDE studies and Category B IDE studies will be published in the Federal Register and posted on the CMS Coverage webpage site located at: http://www.cms.gov/Medicare/Coverage/IDE/index.html
6. A payment amount in the Medicare Physicians’ Fee Schedule (MPFS) does not imply that Medicare has determined the service to be a “reasonable and necessary” covered service. In addition, according to the Medicare Benefit Policy Manual, Chapter 14, while U.S. Food and Drug Administration (FDA) approval does not automatically guarantee coverage under Medicare, in order to even be considered for coverage under Medicare, devices must be either FDA- or Institutional Review Board (IRB) – approved. Therefore, any device that has not received FDA-approval would not be considered medically reasonable or necessary. The FDA reviews data from well-designed studies and clinical trials in order to determine safety and effectiveness prior to approval for sale but does not establish medical necessity of that device or drug. While Medicare may adopt FDA determinations regarding safety and effectiveness, CMS or Medicare contractors evaluate whether or not the drug or device is reasonable and necessary for the Medicare population under §1862(a)(1)(A). (Note, not all services or procedures are FDA reviewed and approved.)
7. Category A (experimental) and Category B (nonexperimental/investigational devices:
   • The Medicare Advantage Organization (MAO) is responsible for payment of Routine Care Items and Services in CMS-approved Category A IDE studies that are covered by the MAC with jurisdiction over the MA plan’s service area. CMS will not approve Category A devices because they are statutorily excluded from coverage.
   • MAOs are responsible for payment of claims related to members’ participation in Category B IDE studies that are covered by the MAC with jurisdiction over the MA plan’s service area. The MAO is responsible for payment of Routine Care Items and Services in CMS-approved Category B IDE studies. The MAO is also responsible for CMS-approved Category B devices.

Note: CMS finalized changes to the IDE regulations (42 CFR § 405 Subpart B), effective January 1, 2015. CMS added criteria for coverage of IDE studies and changed from local Medicare Administrative Contractor (MAC) review and approval of IDE studies to a centralized review and approval of IDE studies. An approval for a Category A (Experimental) IDE study will allow coverage of Routine Care Items and Services furnished in the study, but not of the Category A device, which is statutorily excluded from coverage. An approval for a Category B (Nonexperimental/investigational) IDE study will allow coverage of the Category B device and the Routine Care Items and Services in the trial. A listing of all CMS-approved Category A IDE studies and Category B IDE studies is posted on the CMS Coverage website located at http://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html and published in the Federal Register.

References

1. Medicare Claims Processing Manual 100-4, Chapter 32, Sections 68 & 69; Effective date: 1/1/15; Revised 10/11/2024
   Accessed via Internet site Medicare Claims Processing Manual (cms.gov); viewed on 10/24/2025.
2. Medicare Managed Care Manual; Chapter 4; Section 90.5; Effective 01/01/2015; Creating new Guidance; Viewed on line at MCM Chapter 4 (cms.gov); viewed on 10/24/2025.
3. Medicare Managed Care Manual Ch 4, Section 10.7.2, Effective 04/22/2016; accessed via MCM Chapter 4 (cms.gov) on11/24/2025.
4. Medicare Benefit Manual Ch 14, Section 20, Effective 1/1/2015; accessed via Medicare Benefit Policy Manual (cms.gov) on 11/24/2025.
5. CMS Manual System: Pub 100-02 Transmittal 198, Change Request 8921. Effective Date 1/1/15; accessed via
   http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R198BP.pdf online on11/24/2025.
6. MLN Matters MM8921; CR Release Date 11/6/2014, Effective Date 1/1/2015, accessed via Medicare Coverage of Items and Services in Category A and B Investigational Device Exemption (IDE) Studies (cms.gov) on11/24/2025.
7. Blue Medicare “Evidence of Coverage”, 2023; Chapter 4: Medical Benefits Chart (What is covered and what you pay), Section 3.1- Services we do not cover (exclusions). Accessed via Forms library | Members | Medicare | Blue Cross NC viewed on11/24/2025.
8. BCBSNC Corporate Medical Coverage Policy: Investigational (Experimental) Services; last reviewed on 11/2024; Medical and Scientific Evidence; viewed online at Investigational (Experimental) Services | Providers | Blue Cross NC ; viewed on 11/24/2025.
9. Social Security; Exclusions from Coverage; viewed online atSocial Security Act §1862, viewed on11/24/2025.
10. 2014 Medicare Explained; Wolters Kluwer, Law and Business; 2014 CCH Incorporated. ISBN: 978-0-8080-3738-5; page 273-276—old reference.
11. Medicare Local Coverage Determination for Category III CPT Codes –Wisconsin Physicians Service Insurance Corporation (L35490) Effective date: 10/01/2015; accessed via LCD - Non-Covered Category III CPT Codes (L34555) (cms.gov).viewed on 11/24/2025 .
12. Medicare Local Coverage Determination Article (LCA) Billing and Coding Article (A56902); Effective Date 08/29/2019 accessed via Article - Billing and Coding: Category III Codes (A56902) viewed on 11/24/2025
13. Centers for Medicare and Medicaid Services, Healthcare Common Procedure Coding System, HCPCS Release and Code Sets via HCPCS Quarterly Update | CMS
14. Centers for Medicare & Medicaid Services (CMS), ICD-10-CM Official Guidelines for Coding and Reporting ICD-10 | CMS
15. Centers of Medicare & Medicaid Services (CMS), Medicare Claims Processing Manual, Chapter 23-Fee Schedule administration and coding Requirements accessed via Medicare Claims Processing Manual; viewed on 11/24/2025
16. Center for Medicare and Medicaid Services, Medicare NCCI Medically Unlikely Edits (MUEs) accessed via Medicare NCCI Medically Unlikely Edits | CMS viewed on 11/24/2025

Policy Implementation/Update Information

Original Date of Administrative Policy: December 5, 1997

Revision Date: November 2009: Converted from Healthcare Services Administrative Policy to Medical Coverage Policy

Revision Date August 2012: Language from EOC and LCD added to policy.

Revision Date July 16, 2014: Edited Description of Investigational services or items to include SSA law and other criteria; Added any request for services not specifically covered by Medicare or have an unspecified code will be reviewed for medical necessity; Added definitions for staff; Edited language from “When coverage will not be approved”; Added a special note regarding Category III codes; updated references. 

Revision Date February 6, 2015: Added Category B definition under Definition section; added site location for all CMS-approved Category A and B IDE studies effective 1/1/2015 under When Coverage Will Be Approved section; added #5 under Special Notes referencing MA plans responsibility for routine care items and services for Category A and B IDE studies, along with the Category B device. Added bullet for language referencing routine care items and services. October 29, 2015 updated LCD due to ICD-10 update only.

Revision Date: February 15, 2017: No criteria changes. Minor revisions only.

Revision Date: July 12, 2017: Merged Policy with Investigational (Experimental) Job Aid to prevent accessing multiple documents for these reviews. Definitions Section: Added definition of FDA. Under Criteria for Coverage Approval; Added C, and D.

Revision Date: July 17, 2019: No CMS Updates. Minor Revisions Only.

Revision Date: August 18, 2021; CMS retired LCD L34555-Removed: Criteria for Coverage Approval: D. to remain consistent with CMS.

Revision Date: August 16, 2023; Annual Review; No CMS Updates. Minor Revisions only

Revision Date: November 14, 2023: Added the following statement to the beginning of policy: “This policy was implemented in the absence of National Coverage Determinations (NCD) or Local Coverage Determinations (LCD) coverage criteria.” Statement added to align with the 2024 CMS Final Rule.

Revision Date: June 24, 2024: Annual Review. Link under “Applicable Codes” updated. Minor Revisions only

Revision Date: Policy converted to a summary of coverage criteria to align with the 2024 CMS Final Rule. No CMS Updates.

Revision Date: November 18, 2025 Converted back to a policy. Minor guidance updates, multiple reference updates and grammatical revisions (adr)

Approval Dates

Medical Coverage Policy Committee: November 20, 2025

Physician Advisor Group/UM Committee: November 18, 2025