HCPCS Coding System

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HCPCS Coding System



Objectives


After reviewing this chapter, readers should be able to:


image Understand the importance of the HCPCS system.


image Discover that the coding system is for all insurance companies, not just Medicare.


image Identify main terms.


image Choose a main term.


image Understand the application of HCPCS modifiers.


KEY TERMS


















































Term Definition
ADA American Dental Association
AMA American Medical Association
CDT Current Dental Terminology
CMS Centers for Medicare & Medicaid Services
CPT Current Procedural Terminology
DME Durable Medical Equipment
HCFA Health Care Financing Administration; former name of CMS
HCPCS Healthcare Common Procedure Coding System
HHS Department of Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
MAC Medicare Administrative Contractors
NDC National Drug Code
PDAC The pricing, data analysis, and coding, contractor to CMS
PDR Physician’s Desk Reference


HCPCS Background Information


Each year in the United States health care insurers process over 5 billion claims for payment. For Medicare and other health insurance programs to ensure that these claims are processed in an orderly and consistent manner, standardized coding systems are essential. The Healthcare Common Procedure Coding System (HCPCS) Level II Code Set is one of the standard code sets used for this purpose. The HCPCS is divided into two principal subsystems, referred to as level I and level II of the HCPCS. Level I of the HCPCS is comprised of CPT (Current Procedural Terminology), a numerical coding system maintained by the American Medical Association (AMA). The CPT is a uniform coding system consisting of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other health care professionals. These health care professionals use the CPT to identify services and procedures for which they bill public or private health insurance programs. Decisions regarding the addition, deletion, or revision of CPT codes are made by the AMA. The CPT codes are republished and updated annually by the AMA. Level I of the HCPCS, the CPT codes, does not include codes needed to separately report medical items or services that are regularly billed by suppliers other than physicians.


Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician’s office. Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT codes, the level II HCPCS codes were established for submitting claims for these items. The development and use of level II of the HCPCS began in the 1980s. Level II codes are also referred to as alphanumeric codes because they consist of a single alphabetical letter followed by four numerical digits, whereas CPT codes are identified using five numerical digits. HCPCS level II codes are not only used by Medicare to report services, they are also used by almost all insurance companies to report services not described in the CPT coding system.


In October of 2003, the Secretary of the U.S. Department of Health and Human Services (HHS) delegated authority under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) legislation to the Centers for Medicare & Medicaid Services (CMS) to maintain and distribute HCPCS level II codes. As stated in 42 CFR Sect. 414.40 (a), CMS establishes uniform national definitions of services, codes to represent services, and payment modifiers to the codes. Within CMS there is a CMS HCPCS Workgroup, which is an internal work group composed of representatives of the major components of CMS, as well as other consultants from pertinent federal agencies. Prior to December 31, 2003, level III HCPCS were developed and used by Medicaid state agencies, Medicare contractors, and private insurers in their specific programs or local areas of jurisdiction. For purposes of Medicare, level III codes were also referred to as local codes. Local codes were established when an insurer preferred that suppliers use a local code to identify a service, for which there is no level I or level II code, rather than use a “miscellaneous or not otherwise classified code.”


HIPAA required CMS to adopt standards for coding systems that are used for reporting health care transactions. CMS published, in the Federal Register on August 17, 2000 (65 FR 50312), regulations to implement this part of the HIPAA legislation.


These regulations provided for the elimination of level III local codes by October 2002, at which time the level I and level II code sets could be used. The elimination of local codes was postponed, as a result of section 532(a) of HIPAA, which continued the use of local codes through December 31, 2003.



HealthCare Common Procedure Coding System


HCPCS is a set of health care procedure codes based on the AMA’s CPT.




Levels of Codes


HCPCS includes two levels of codes:



The HCPCS level II coding system is a comprehensive and standardized system that classifies similar products that are medical in nature into categories for the purpose of efficient claims processing. For each alphanumeric HCPCS code, there is descriptive terminology that identifies a category of like items. These codes are used primarily for billing purposes. For example, suppliers use HCPCS level II codes to identify items on claim forms that are being billed to a private or public health insurer.


HCPCS is a system for identifying items and services. It is not a methodology or system for making coverage or payment determinations, and the existence of a code does not, of itself, determine coverage or noncoverage for an item or service. Although these codes are used for billing purposes, decisions regarding the addition, deletion, or revision of HCPCS codes are made independent of the process for making determinations regarding coverage and payment.


Currently, there are national HCPCS codes representing over 4000 separate categories of like items or services that encompass millions of products from different manufacturers. When submitting claims, suppliers are required to use one of these codes to identify the items they are billing. The descriptor that is assigned to a code represents the definition of the items and services that can be billed using that code.


In summary, the HCPCS level II coding system has the following characteristics:



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Dec 10, 2016 | Posted by in GENERAL SURGERY | Comments Off on HCPCS Coding System

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