September 19, 2024
The Healthcare Common Procedure Coding System (HCPCS) is a system of codes designed to represent supplies, procedures, services, and products used in non-traditional hospital settings where CPT codes are used. The system is used by Medicare, Medicaid, and other health insurance programs to ensure consistent billing and reimbursement. Since CPT codes do not cover outpatient and other healthcare services, HCPCS is important in covering all aspects of care.
The idea for HCPCS was introduced by the Centers for Medicare & Medicaid Services (CMS) (formerly known as the Health Care Financing Administration (HCFA)) in the 1970s. The standardization was formally adopted in 1983 and included not only medical procedures but also supplies and services not covered by the CPT codes.
The HCPCS is maintained and updated by the CMS, with regular inputs from healthcare providers, manufacturers, and insurers. The coding system is divided into two levels, so let’s take a look at that now.
The HCPCS is divided into two levels:
Commonly known as Current Procedural Terminology (CPT) codes, these are used mainly to describe medical procedures and services conducted in traditional hospital settings.
CPT codes help to represent medical procedures and services performed by physicians and other healthcare providers. Using these codes for billing and documentation helps standardize the reporting of medical, surgical, and diagnostic services, and facilitate communication among providers, insurers, and patients.
Structure: CPT codes are numeric and five digits long. Each code precisely describes specific medical, surgical, or diagnostic interventions.
Updates: These codes are updated annually to reflect current changes in medical technology and practices.
Usage: They are used universally across the United States by healthcare providers to report procedures to Medicare, Medicaid, and private health insurers for billing and documentation.
Categories: CPT codes are divided into three categories - Category I for standard, widely used procedures; Category II for optional performance tracking; and Category III for emerging technologies.
Level II of HCPCS consists of alphanumeric codes used to identify and bill non-physician services like ambulance rides, durable medical equipment, prosthetics, orthotics, and other medical supplies that are not covered under the ambit of CPT codes.
Level II codes are further subdivided into the following sections:
Here are five commonly used HCPCS Level II codes, along with a brief description of each:
Healthcare providers in the United States are mandated to bill Medicare, Medicaid, and other health insurance programs accurately. The HCPCS codes help ensure that billing is done accurately, and providers are reimbursed correctly for the services, procedures, and supplies they provide to patients.
Patients can often move around or be transferred to different facilities during the course of treatment. A standardized system of coding that is universally accepted across all healthcare facilities and insurance companies provides for clear and consistent communication across all stakeholders, and helps minimize confusion and errors in billing and claims processing.
As noted above, a standardized method of communication between healthcare providers helps all parties comply with the reporting requirements set by federal and state healthcare programs, and avoid any errors or penalties.
HCPCS codes streamline the management of billing and claims across different healthcare providers and insurers. This efficiency helps in the quick processing of claims and reduces administrative burdens on healthcare facilities.
By tracking patient bills across institutions and providers, authorities can accurately track the frequency and types of medical services and supplies provided/needed through their HCPCS codes. This data is invaluable for managing healthcare resources, planning, and policy-making.
Researchers use HCPCS code data to analyze trends in healthcare delivery, the effectiveness of different treatments, and costs. This research can influence future healthcare policies, improve patient care, and optimize the triaging of medical resources.
As the healthcare landscape continues to evolve, the role of medical coding remains crucial. HCPCS codes provide a standardized language for describing medical services and procedures, ensuring accurate billing and reimbursement.
Fortunately, advancements in technology, such as AI-powered medical coding tools like CombineHealth's Amy, are making the coding process more efficient and accurate. By automating the assignment of CPT codes, these tools can help healthcare providers reduce errors, improve billing accuracy, and ultimately enhance patient care.
CombineHealth is at the forefront of medical coding innovation, offering AI-powered solutions that streamline the coding process and improve efficiency. With Amy, healthcare providers can benefit from increased accuracy, reduced manual effort, and enhanced revenue cycle management.
Healthcare providers use HCPCS codes to submit claims to insurance companies for reimbursement. The insurance company reviews the codes to determine the appropriate payment amount.
Yes, you can use HCPCS codes to bill self-pay patients for medical services. However, it's important to consult with your state's regulations regarding out-of-pocket billing.
Yes, HCPCS codes can be used to track the types of services provided, the volume of patients seen, and other performance metrics. This information can be valuable for quality improvement initiatives.
Yes, HCPCS codes are available for telehealth services. The specific codes will depend on the type of telehealth service provided.
CombineHealth’s AI algorithms are trained on a vast dataset of medical records and CPT/HCPCS codes. This enables them to understand the nuances of medical language and accurately identify the correct codes for various scenarios, including complex medical cases with multiple diagnoses or procedures. Our proprietary AI platform ‘Amy’ is designed to accurately identify and assign codes even in challenging scenarios.
