Medicare's HCPCS Codes for Payments

Medicare HCPCS Codes
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HCPCS codes are numbers Medicare assigns to every task and service a medical practitioner may provide to a patient. There are codes for each medical, surgical, and diagnostic service. HCPCS stands for Healthcare Common Procedure Coding System.

Since everyone uses the same codes to mean the same thing, they ensure uniformity. For example, no matter what doctor a Medicare patient visits for an allergy injection (HCPCS code 95115) that doctor will be paid by Medicare the same amount another doctor in that same geographic region would be for that same service.

HCPCS billing codes are monitored by CMS, the Centers for Medicare and Medicaid Services. They are based on the CPT Codes (Current Procedural Technology codes) developed by the American Medical Association. HCPCS codes are regulated by HIPAA, which requires all healthcare organizations to use the standard codes for transactions involving healthcare information. 

Levels of HCPCS Codes and Modifiers

HCPCS includes two levels of codes.

  1. Level I consists of CPT codes. CPT or Current Procedural Terminology codes are made up of 5 digit numbers and managed by the American Medical Association (AMA). CPT codes are used to identify medical services and procedures ordered by physicians or other licensed professionals.
  2. Level II of the HCPCS are alphanumeric codes consisting of one alphabetical letter followed by four numbers and are managed by The Centers for Medicare and Medicaid Services (CMS). These codes identify non-physician services such as ambulance services, durable medical equipment, and pharmacy. These are typically not costs that get passed through a physician's office so they must be dealt with by Medicare or Medicaid differently from the way a health insurance company would deal with them.

    Some HCPCS codes required the use of modifiers. They consist of two digit number, two letters or alphanumeric characters. HCPCS code modifiers provide additional information about the service or procedure performed. Modifiers are used to identify the area of the body where a procedure was performed, multiple procedures in the same session, or indicate a procedure was started but discontinued.

    Sometimes services are always grouped together, in which case their codes may also be grouped. These are called "bundled" codes.

    Importance for Medical Office Staff and Providers

    Providers should be aware of the HCPCS code guidelines for each insurer especially when billing Medicare and Medicaid claims. Medicare and Medicaid usually have more stringent guidelines than other insurers.

    Providers and medical office managers must make sure their medical coders stay up-to-date on HCPCS codes. HCPCS codes are updated periodically due to new codes being developed for new procedures and current codes being revised or discarded.

    Where Patients May Find HCPCS / CPT Codes

    Patients can find HCPCS / CPT Codes in a number of places. As you leave the doctor's office, you are handed a review of your appointment which may have a long list of possible services your doctor provided, with some of them circled. The associated numbers, usually five digits, are the codes.

    If your appointment requires a follow-up billing by your doctor for copays or co-insurance, then the codes may be on those bills.

    A wise patient and smart healthcare consumer will use these codes to review medical billings from practitioners, testing centers, hospitals or other facilities.

    It's a good way to be sure your insurance (and your co-pays and co-insurance) are paying only for those services you received.

    If you receive statements from either the doctor or your health insurance and the HCPCS / CPT codes do not appear, then contact the party who sent them and request a new statement that does include the codes.

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