Healthcare Common Procedure Coding system

“The Healthcare Common Procedure Coding System (HCPCS, often pronounced by its acronym as “hick picks”) is a set of healthcare procedure codes based on the American Medical Association’s Current Procedure Terminology (CPT).  Initially, use of the HCPCS codes was voluntary, but with the implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which required that CMS [Center for Medicare and Medicaid Services] use HCPCS for transactions involving healthcare information, the HCPCS codes became mandatory.”[1] 

“HCPCS codes are numbers that Medicare assigns to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services^.”[2]

HCPCS includes three levels of codes:

Level I Codes consists of a five-digit numeric code that contains the American Medical Association’s Current Procedural Terminology (CPT).”^[3]

“Level I of the HCPCS is comprised of Current Procedural Terminology (CPT-4) , a numeric coding system maintained by the American Medical Association (AMA). The CPT-4 is a uniform coding system consisting of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other healthcare professionals. These healthcare professionals use the CPT-4 to identify services and procedures for which they bill public or private health insurance programs. Level I of the HCPCS, the CPT-4 codes, does not include codes needed to separately report medical items or services that are regularly billed by suppliers other than physicians.”^[4]

Issues related to the application of Level I HCPCS codes (CPT-4) for physicians will be referred to the AMA.^[5]”  “The AMA maintains the CPT codes, updates them routinely, and holds the copyright on the CPT codes.^[6]” 

Level II Codes are alphanumeric and primarily include non-physician services such as ambulance services and  prosthetic devices, orthotics, and supplies (DMEPOS) and represent items and supplies and non-physician services, not covered by CPT-4 codes (Level I).  Level II codes are referred to as alpha-numeric codes because they consist of a single alphabetical letter followed by 4 numeric digits, while CPT codes are identified using 5 numeric digits.” [7]

“Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT-4 codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician’s office. Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT-4 codes, the level II HCPCS codes were established for submitting claims for these items.[8]”  These codes are for the use of all private and public health insurers.

 “CMS has the authority to assign HCPCS codes.  HCPCS Level II codes are maintained by the CMS HCPCS Workgroup. Since HCPCS is a national coding system, all payers will be represented in the Workgroup including representatives of the private insurance sector; CMS staff and contractors; representatives of state Medicaid agencies and of the US, DHHS Department of Veteran’s Affairs.[9] The Workgroup includes representatives from private insurance companies, Medicaid, and the Pricing, Data Analysis and Coding Contractor (PDAC). The Workgoup is responsible for all revisions, deletions and additions to the HCPCS codes.”[10]   These representatives will participate in the workgroup meetings and provide input as to what is necessary to meet each party’s program operating needs.[11]”

“Level III codes, also called local codes, were developed by state Medicaid agencies, Medicare contractors, and private insurers for use in specific programs and jurisdictions. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) instructed CMS to adopt a standard coding systems for reporting medical transactions. The use of Level III codes was discontinued on December 31, 2003, in order to adhere to consistent coding standard.[12]

[1]. National Assistive Technology Advocacy Project, HCPCS Codes, Diana M. Straube, Staff Attorney, November 2008.

[2] About Health, What are Medicare’s HCPCS Codes.

[3] National Assistive Technology Advocacy Project, HCPCS Codes, Diana M. Straube, Staff Attorney, November 2008.

[4] CMS.gov, Centers for Medicare & Medicaid Services, HCPCS Coding Questions, Do you have a Coding Question.

[5] CMS.gov, Centers for Medicare & Medicaid Services, HCPCS Coding Questions, Do you have a Coding Question.

[6] About Health, What are Medicare’s HCPCS Codes.

[7] Healthcare Common Procedure Coding System (HCPCS) Level II Coding Procedures, November 13, 2015.

[8] CMS.gov, Centers for Medicare & Medicaid Services, HCPCS Coding Questions, Do you have a Coding Question.

[9] Healthcare Common Procedure Coding System (HCPCS) Level II Coding Procedures.

[10]National Assistive Technology Advocacy Project, HCPCS Codes, Diana M. Straube, Staff Attorney, November 2008

[11] Healthcare Common Procedure Coding System (HCPCS) Level II Coding Procedures.

[12] National Assistive Technology Advocacy Project, HCPCS Codes, Diana M. Straube, Staff Attorney, November 2008.