Did you know—5 billion claims for payment are processed by health care insurers in the United States annually? A statistic of this caliber surely seems overwhelming. To maintain order and consistency in processing so many claims, standardized coding systems are integral. HCPCS is one of many coding mechanisms used by healthcare professionals, billers, and third parties on a daily basis to streamline the medical billing cycle. So what exactly is the HCPCS? We’ve got the facts you need to know.
The Basics
The Healthcare Common Procedures Coding System (HCPCS) is a code set utilized by healthcare professionals, medical coders, and billers. Administered by the Centers for Medicare and Medicaid Services (CMS) in cooperation with third parties, HCPCS is an official code set assigned to every task and service a physician may provide to a patient, including medical, surgical, and diagnostic services, to ensure uniformity in billing to Medicare and Medicaid.
The Hierarchy
Level I
Similar to ICD and CPT, HCPCS codes are grouped together by the services they describe and are arranged in numeric order. The HCPCS Code set is broken down into three levels. Level I codes are actually the same as CPT codes, made up of 5 character alphanumeric codes copyrighted by the American Medical Association, representing physician and non-physician services. So all CPT codes are HCPCS codes, but not vice versa.
Level II
Level II includes additional codes that are designated to represent non-physician services such as ambulance rides, wheelchairs, walkers, other durable medical equipment, and medical services not covered by Level I. Like Level I codes, Level II codes are five characters long. However, they are alphanumeric characters, with the first always being a letter. Level II codes are typically not costs that are associated with a physician’s office. Thus, they are dealt with differently by Medicare or Medicaid versus a health insurance company.
Level III
Like Level II, Level III codes are 5 character alphanumeric codes. These codes and descriptors developed by Medicare carriers are for use at the local level and represent physician and non-physician serviced not previously represented in either Level I or Level II.
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