A brief look at HCPCS Level I & Level II

In this post, you'll learn the two subsystems of HCPS, tips for determining which code to provide and other resources to getting up-to-date HCPCS information.

What is a HCPCS code?

Healthcare Common Procedure Coding System (HCPCS) is a “collection of standardized codes that represent medical procedures, supplies, products and services,” according to the National Library of Medicine. The HCPCS is divided into two subsystems, known as level I and level II, respectively.

Level I comprises Current Procedural Terminology (CPT-4 or CPT), a numeric coding system maintained by the American Medical Association (AMA). This numeric system maintains descriptive terms and codes used to identify medical services and procedures furnished by physicians or other health care professionals. 

Note: Level I of HCPCS (CPT-4 codes) does not include codes for medical items/services that are regularly billed by suppliers other than physicians.

Level II of the HCPCS is used primarily to identify products, supplies and services that are not identified by CPT-4codes. Examples of Level II HCPCS include ambulance services and durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) when used outside of a physician’s office, as described by the Centers for Medicare & Medicaid (CMS)

Why does Level II HCPCS exist? 

Level II HCPCS codes essentially exist to report what a provider used during an item or service. CPT-4 codes generally describe what the provider did during an item or service. Not all payers accept HCPCS Level II codes, though many have adopted the HCPCS Level II code set since its conception for Medicare claims. 

How do you choose between CPT-4 and HCPCS Level II?

When a CPT-4 and a HCPCS Level II code exist for the same procedure or service, Medicare often requires the HCPCS Level II code. Several health insurers follow Medicare guidelines, though you’ll likely need to keep a running list as you learn what is necessary for each of your third-party payers. 

Note the nuances between similar CPT-4 codes and HCPCS Level II codes to be sure you submit the best code for the procedure or service. For example, various Level II G codes are listed for reporting screening services. Since screening services are not diagnostic procedures, the patient must be asymptomatic for use of these codes. 

The pricing, coding analysis and coding (PDAC) is a CMS contractor that assists suppliers and manufacturers in determining which HCPCS code should be used to describe DMEPOS items when billing Medicare. Call the toll free helpline at (877) 735-1326. 

The American Hospital Association (AHA) together with CMS established the AHA clearinghouse to handle coding questions on established HCPCS usage. This clearinghouse aims to solve the growing need for consistency and understanding in the wake of implementation of prospective payment methods that utilize HCPCS coding for billing and payment purposes. The AHA clearinghouse serves as a centralized point of contact to educate hospitals, policy makers and the public on HCPCS coding, according to CMS

The AHA will “handle clearinghouse functions and provide open access to any person or organization that has questions regarding a subset of HCPCS coding, particularly hospitals and other health professionals who bill under the hospital outpatient prospective payment system (OPPS).”

Specifically, the AHA clearinghouse will provide interpretation, promotion and explanation of proper use of the following:

  • Level I HCPCS (CPT-4 codes) for hospital providers
  • Level II HCPCS codes for hospitals, physicians and other health professionals (who bill Medicare)
    • A-codes for ambulance services and radiopharmaceuticals
    • C-codes
    • G-codes
    • J-codes 
    • Q-codes (other than Q0163 through Q0181)

Submit HCPCS questions through the AHA Central Office website

When are HCPCS codes updated?

HCPCS is updated quarterly, though a list of current CPT/HCPCS codes is available annually. 

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