The Healthcare Common Procedure Coding System (HCPCS) is a set of standardized codes used in the billing and processing of health insurance claims with Medicare, Medicaid, and other insurers.
Before 2001, the acronym HCPCS stood for HCFA Common Procedure Coding System, a medical billing system that was used by the Health Care Financing Administration (HCFA). HCFA established HCPCS to meet the need for a standardized coding system that describes medical services and products.
In 2001, the HCFA was renamed the Centers for Medicare and Medicaid Services (CMS), leading to the creation of the current HCPCS acronym.
HCPCS Level I and Level II
HCPCS is divided into two subsystems: Level I and Level II.
Level I is made up of Current Procedural Terminology (CPT) codes. CPT codes feature five numeric digits. CPT codes are maintained by the American Medical Association (AMA) and represent services and procedures provided by healthcare professionals.
Level II codes identify products, services, and supplies that are not included in the CPT codes. Level II codes consist of a letter followed by four numeric digits.
In general, Level I/CPT codes describe what a provider did in a particular procedure or service, and Level II codes describe what the provider used. However, this is not a concrete rule, and there is some overlap between the two sets of codes.
Choosing Between CPT Codes and HCPCS Level II Codes
When Level I and Level II codes exist for the same service, Medicare usually requires the Level II code to be used. As many health insurers follow Medicare guidelines, they will also have a preference for Level II codes. However, you should be familiar with the coding guidelines for all of your third-party payors to ensure timely claims processing.
The American Hospital Association (AHA) established the AHA clearinghouse to handle HCPCS Level II coding questions in conjunction with CMS. According to CMS, the AHA clearinghouse strives to educate hospitals, policymakers, and the public at large on HCPCS coding.
How TempDev Can Help You With HCPCS
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