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HCPCS - General Information

What's New

The Centers for Medicare & Medicaid Services is pleased to announce the scheduled release of modifications to the Healthcare Common Procedure Coding System (HCPCS) code set.  These changes have been posted to the Alpha-Numeric HCPCS code list.  Final decisions for individual HCPCS code applications will be published soon, in this section. 

The Centers for Medicare & Medicaid Services is pleased to announce its plans to initiate a limited demonstration for web-based notice and comment mechanism for allowing public input on requests to discontinue Level II HCPCS codes, that are generated internally based on national program operating needs, are not the subject of other notice and comment mechanisms; and that are not replaced by other or new codes.

This demonstration will add further transparency to CMS’ HCPCS coding process by providing advance notice regarding internal decisions to discontinue HCPCS codes and an opportunity for public input into these decisions.  Additionally, this demonstration provides a valuable opportunity for CMS to gather critical data related to the logistics, time and resources involved in adding a public component to CMS’ internal code request process, so that we can find an appropriate balance between the need for transparency and stakeholder input, and the  need to be nimble in making coding changes to improve program administration, to the extent practicable. 

CMS reserves the right to make immediate changes without notice (and take comments afterwards), when we have a national program operating need to do so.

The first year of the demonstration will be conducted in the current (2014/2015) HCPCS coding cycle.  Afterwards, CMS will consider the results of the demonstration.

The timing and logistics of the demonstration, as follows, will also be discussed in CMS’ “Level II Coding Procedures” document, published at the HCPCS Level II Coding Process & Criteria web page.

Summaries of internal requests to discontinue permanent level II HCPCS codes (that are not the subject of other notice and comment mechanisms and/or that are not replaced by other or new codes) are published by July 1, 2014 on the CMS Internal HCPCS Coding Decisions web page.

Public comments are due, in writing, via by July 21, 2014.

CMS’ HCPCS Workgroup will re-review the internal requests, together with input received timely via the above process. The final decision will be folded into the outgoing HCPCS Annual Update.

CMS has additional plans for adding transparency to the Level II HCPCS coding process, which include employing live-stream technology to enable remote attendance to CMS’ HCPCS Public meetings, effective as of the 2014 CMS’ HCPCS public meetings.  Details are published in our document entitled: “Guidelines for Participation in CMS’ HCPCS Public Meetings" on CMS’ official HCPCS website.   CMS is also developing a mechanism to share information pertaining to final decisions for individual HCPCS code applications. 

In response to shortage of liposomal doxorubicin (Doxil), the FDA is permitting the temporary importation of Lipodox, a brand of liposomal doxorubicin hydrochloride.  See  The Centers for Medicare & Medicaid Services’ (CMS) HCPCS Quarterly update includes 2 new codes (Q2048 and Q2049) for liposomal doxorubicin that  will become effective July 1, 2012.  The code descriptors are worded in a manner that distinguishes Lipodox and Doxil.  As of July 1, 2012, HCPCS code J9001 will not be used for Medicare billing.  CMS will release a Change Request (CR) with additional instructions in the near future. 


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 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 numeric 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 1980's. Level II codes are also referred to as alpha-numeric codes because they consist of a single alphabetical letter followed by 4 numeric digits, while CPT codes are identified using 5 numeric digits.

In October of 2003, the Secretary of HHS delegated authority under the HIPAA legislation to CMS to maintain and distribute HCPCS Level II Codes.  As stated in 42 CFR Sec. 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 workgroup comprised 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." The Health Insurance Portability and Accountability Act of 1996 (HIPAA) required CMS to adopt standards for coding systems that are used for reporting health care transactions. We 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 BIPA, which continued the use of local codes through December 31, 2003.