The American healthcare system processes billions of claims annually, making standardized coding systems indispensable. These systems ensure that Medicare, Medicaid, and private health insurers can manage claims efficiently and consistently. In hospital-based care, the primary coding systems are rooted in the Healthcare Common Procedure Coding System (HCPCS), which is divided into two main levels: Level I and Level II. Understanding these levels is crucial for navigating hospital billing and healthcare administration.
Decoding HCPCS: Level I and Level II
HCPCS is not a single system but rather a combination of two subsystems that work together to provide a comprehensive framework for coding medical services, procedures, and supplies.
HCPCS Level I: CPT® Codes
Level I of HCPCS is based on the Current Procedural Terminology (CPT®), a coding system maintained by the American Medical Association (AMA). CPT® codes are primarily used to identify medical services and procedures performed by physicians and other healthcare professionals. These codes are essential for billing both public and private health insurance programs.
- Uniformity and Updates: CPT® provides a uniform language for coding medical procedures. The AMA updates and republishes these codes annually to reflect advancements in medical practice and technology.
- Numeric Structure: CPT® codes are composed of five numeric digits, making them easily identifiable and processable in billing systems.
- Scope: These codes cover a broad spectrum of services, from evaluation and management to surgery, radiology, and pathology. For specific inquiries regarding the application of CPT® codes for physician services, the AMA is the primary point of contact.
HCPCS Level II: National Codes
Level II of HCPCS is a standardized coding system that complements CPT® by covering products, supplies, and services not included in Level I. These often include items used outside of a physician’s office, such as:
- Ambulance services
- Durable medical equipment (DME)
- Prosthetics
- Orthotics
- Medical supplies
These are also known as alpha-numeric codes due to their structure.
- Beyond CPT®: Medicare and other insurers recognize that many necessary healthcare items and services are not captured by CPT® codes. HCPCS Level II codes were developed to ensure providers and suppliers can bill for these additional items.
- Alpha-Numeric Structure: HCPCS Level II codes consist of a single alphabetical letter followed by four numeric digits, differentiating them from the purely numeric CPT® codes.
- Maintenance by CMS: The Centers for Medicare & Medicaid Services (CMS) is responsible for maintaining HCPCS Level II codes, including decisions on adding, revising, or deleting codes to keep the system relevant and up-to-date. This system has been in place since the 1980s, with CMS’s authority formalized in 2003 to ensure national uniformity in service definitions and coding. For questions about HCPCS Level II codes, CMS provides a dedicated contact email.
MEARIS™ and Code Updates
The Medicare Electronic Application Request Information System (MEARIS™) is a crucial tool for anyone needing to interact with HCPCS Level II codes.
- Submitting Code Modifications: MEARIS™ allows anyone to submit requests to modify the HCPCS Level II national code set. This ensures the coding system can evolve with healthcare needs.
- Application Submission: The MEARIS™ electronic application is used to submit applications for:
- Quarterly drug and biological product codes.
- Biannual non-drug and non-biological items and services codes.
- Key Deadlines: Deadlines are set for applications to ensure timely updates to the coding system, occurring at the start of each quarter for drugs and biologicals, and biannually in January and July for other items and services.
The CMS also regularly publishes updates regarding coding decisions. For example, in January 2025, CMS announced the publication of coding decisions for Q4 2024 HCPCS Level II drug and biological applications. These publications provide summaries of applications, the requests made, and CMS’s coding decisions, ensuring transparency and keeping the healthcare community informed of changes.
Staying Informed
For those working in hospital-based care and healthcare billing, staying updated on coding systems is essential. Subscribing to updates, such as the HCPCS Level II Updates Listserv, is a proactive step to receive the most current and accurate information directly from CMS. This ensures accurate claim submissions and adherence to the latest coding standards.
In conclusion, hospital-based care relies on both HCPCS Level I (CPT®) and Level II coding systems to accurately represent the wide range of services, procedures, and supplies utilized. These standardized systems are vital for efficient claims processing, reimbursement, and the overall financial health of healthcare providers and systems.
