
When a Code Is Not Just a Code: What Early-Stage MedTech Founders Need to Know About the Codes “Dr. Google” Identifies
When a Code Is Not Just a Code: What Early-Stage MedTech Founders Need to Know About the Codes “Dr. Google” Identifies
If you're developing an early-stage MedTech, chances are you’ve been asked:
“What codes will be used for billing?”
“What is the expected reimbursement?”
“Can both the hospital and physician bill?”
These are fair and important questions—especially if you're applying for non-dilutive funding, engaging early investors, or even sketching out your pricing strategy. But beware: a code is not just a code.
You may want to latch onto an existing CPT or HCPCS code that seems close enough. You Google, scan CMS websites, or even rely on anecdotal billing practices from early physician advisors. But that’s only the tip of the iceberg—and it can be dangerously misleading.
Let’s unpack why.
Common “Gotchas” in Early Coding Research
Billing Rules by Setting of Care
Just because a code exists doesn't mean it’s billable in all places. A procedure reimbursed in a hospital outpatient department might not be reimbursed in an ambulatory surgical center or physician office—or vice versa.Facility vs. Physician Payment
Let’s say you find payment rates through your research. Does that payment may go to the facility or the physician? And if you find two physician payments, under which circumstance would each value apply? (By the way, why are those payment rates for a single code so wildly different??) Misunderstanding or misinterpreting these dollars can derail your planning.Medically Unlikely Edits (MUEs)
Some codes have limits on how many times they can be billed per day—or per patient. If your use case doesn’t fit those constraints, your reimbursement assumptions could fall apart.Coverage Limitations and LCDs
A code might exist, but Medicare or private payers may restrict its use to certain patient types, indications, or clinical circumstances. You don’t want to discover too late that your technology is outside of coverage scope.Prior Authorization Requirements
Payers may technically “cover” a procedure but impose prior auth hurdles that create major adoption barriers. These are often invisible in the code description itself.Modifier Madness
Some codes require very specific modifiers to trigger payment—or avoid denials. If you’re not accounting for these from the start, your early adopter customers may not get paid.“Carrier Priced” or Status Indicator Traps
A code’s existence doesn’t guarantee payment. Some codes are carrier priced (payer decides what to pay, or whether to pay at all), or they carry a “bundled” status under pre-set payment systems—meaning the codes may be active, covered, billable, but… they don’t get paid separately.Global Period Pitfalls
If your product or service is used during a surgical episode, payment might already be baked into a payment for the primary procedure. Billing separately could be denied—even with a valid code.
So What Should You Do About It?
Before building assumptions into your financial model—or worse, sharing reimbursement language with funders—get a brief validation from a certified coder. This doesn’t have to be a massive project. In fact, it shouldn’t be. A focused review can:
Confirm whether your “closest fit” code has hidden limitations
Surface setting-of-care implications and modifier requirements
Flag any coverage or payment quirks that could affect adoption
Give you confidence (or caution) before making bold reimbursement claims
You don’t need a 100-page strategy deck. But you do need clarity.
At this stage, smart companies invest just enough in expert review to avoid costly missteps—and to speak credibly to investors and grant reviewers who know what to look for.
How About Getting a New Code?
If you're thinking about applying for a brand-new code, buckle up! CPT and HCPCS code development processes often take 12 to 18 months… after you've gathered sufficient evidence and stakeholder support. Even after a new code is secured, it may not come with an assigned payment rate, coverage, or clarity on where and how it's billed. The 12- to 18-month timeline is just the beginning.
Planning to ‘just get a new code later’ is not a viable reimbursement strategy—especially if you're trying to meet early revenue milestones or scale adoption in the near term.
Bottom Line:
A code isn’t just a label. It’s a signal to the payer and can sometimes be a landmine. Before you build reimbursement into your pitch deck, make sure you're standing on solid ground.
If you're not sure where to start, let's talk. I’ve helped dozens of early-stage companies validate their assumptions quickly and cost-effectively (without boiling the ocean).