HCPCS stands for Healthcare Common Procedure Coding System (HCPCS). For Medicare and other health insurance programs to ensure health care claims are processed in an orderly and consistent manner, standardized coding systems are essential. The HCPCS Level II code set is one of the standard code sets used by medical coders and billers for this purpose. The other, HCPCS Level I, is comprised of CPT (Current Procedural Terminology), copyrighted by the American Medical Association (AMA).
Sometimes described as the “hall closet of coding,” HCPCS Level II serves several needs. The HCPCS Level II code set is made up of five-character alpha-numeric codes representing primarily medical supplies, durable medical goods, non-physician services and services not represented in the Level I code set (CPT®). HCPCS Level II includes services such as ambulance, durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) when used outside a physician’s office. It is also used as an official code set for outpatient hospital care, chemotherapy drugs, Medicaid and other services. The Blue Cross Blue Shield Association and the American Dental Association (ADA) post their procedure codes as part of HCPCS Level II. The Centers for Medicare & Medicaid Services (CMS) often uses HCPCS Level II to post codes for the tracking of demonstration projects and new technologies.
The development and use of HCPCS Level II began in the 1980s. In 2003, the Secretary of Health and Human Services (HHS) delegated authority under the Health Insurance Portability & Accountability Act of 1996 (HIPAA) legislation to CMS to maintain and distribute HCPCS Level II codes. The code set is updated quarterly based on public input, which includes feedback from providers, manufacturers, vendors, specialty societies, the ADA, Blue Cross and others.