Medicare Compliance & Reimbursement

Question: When should we report HCPCS Level II codes versus CPT^® codes? Are HCPCS Level II codes just for drugs?

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Answer: Healthcare Common Procedure Coding System (HCPCS) Level I codes are the code set providers use to report medical procedures and professional services furnished in ambulatory or outpatient settings, including physician visits to inpatients, says the Centers for Medicare & Medicaid Services (CMS) in a Medicare Learning Network fact sheet. HCPCS Level I codes are numeric and are also known as CPT^® codes, which were developed, copyrighted, and are maintained by the American Medical Association (AMA).

HCPCS Level II codes are alphanumeric and comprise “the code set providers use to report medical items, supplies, procedures, and certain professional services not described by any CPT^® codes,” CMS says. CMS maintains the Level II codes, except for the dental

services codes (D codes), which were developed, copyrighted, and are maintained by the American Dental Association (ADA). Some examples of the services and products that Level II codes cover include prosthetics, ambulance services, orthotics, durable medical equipment, and drugs.

“When providers report Level II HCPCS codes on claims, the MAC uses the codes to either determine coverage or payment for furnished items and services (less beneficiary coinsurance and copayments),” CMS says.