How Supply Chain can support HCPCS Level II Device Charge Capture

September 20, 2022

4 minute read

Medical care providers and organizations are required by most payers to use HCPCS (Healthcare Common Procedure Coding System) Level II codes to document the medical products used for patient care. The accuracy of assigning these codes to products significantly impacts the capture of charges per patient case and overall hospital charge capture.

Question & Answer

Q: What are HCPCS Level II codes and how are they used by hospitals?

A: HCPCS Level II is the national standardized coding system used by healthcare providers, practitioners and medical equipment suppliers to identify and bill for products, supplies, devices, drugs and services not included in the CPT-4 codes (HCPCS Level I), such as ambulatory services, durable medical equipment (DME), and drugs/dosing. They consist of one Alpha character (A-V) followed by 4 digits. A full list of categories and descriptions below.

HCPCS Level II coding tends to take a back seat in medical coding. Not only is it important, it is critical for Outpatient reimbursement that is typically bundled into Inpatient Services/Claims.

Q: Which payers require HCPCS level II coding?

A: HCPCS Level II is a collection of codes that represent procedures, supplies, products and services which may be provided to Medicare beneficiaries and to individuals enrolled in some private health insurance programs. The codes applied to patients with Medicare coverage can vary by geographic area/jurisdiction based on the Medicare Administrative Contractor (MAC). Some, not all, private health insurance accept HCPCS Level II codes. For example, Blue Cross typically uses “S codes” vs. Medicare using a “G code” for the same service. Contracts between payers and providers are typically built into EHR billing systems to capture these regional/state/contractual requirements. Most EHR billing systems even have a conversion feature, so a coder can use one code for a service/product and the billing system will convert it based on the primary payer listed on the claim.

Q: How are HCPCS Level II codes assigned to products? What are the challenges?

A: HCPCS Level II codes, except for dental code services, are developed and maintained jointly by the Centers for Medicare and Medicaid, Blue Cross and Blue Shield and the Health Insurance Association of America. Any supplier or manufacturer can submit a request for code modification or a new code. The HCPCS coding review process is an on-going process; published annually but updated quarterly. One challenge for healthcare providers is recognizing a new code that has replaced a temporary code. Changes and edits need to be reviewed at least annually to ensure the most accurate code is submitted for timely reimbursement.

Q: How can hospitals correctly and consistently assign HCPCS Level II?

A: Best practice is for the hospital to assign HCPCS Level II supply codes to their item master. These codes can then be transferred downstream to other hospital systems such as the Electronic Health Record (EHR) and Chargemaster. It is important for hospitals to accurately reflect all procedure costs, including devices/supplies, using the appropriate HCPCS Level II code, where applicable.

Symmetric Health Solutions assists hospitals by including HCPCS codes as part of our web application, APIs and data feeds. Customers can:

  • View items by HCPCS to see potentially missed reimbursements
  • Pull Manufacturer HCPCS codes to help improve charge capture and avoid denials
  • Potential integration of Item Master with EHR and Charge Master
  • HCPCS Level II Categories

    A codes
  • Transportation Services Including Ambulance
  • Medical and Surgical Supplies
  • B codes
  • Enteral and Parenteral Therapy
  • C codes
  • Outpatient PPS
  • E codes
  • Durable Medical Equipment
  • G codes
  • Procedure/Professional Services (Temporary codes)
  • H codes
  • Alcohol and Drug Abuse Treatment Services
  • J codes(table of drugs)
  • Drugs/dosing
  • Chemotherapy Drugs/dosing
  • M codes
  • Medical Services
  • Quality Measures
  • P codes
  • Pathology and Laboratory Services
  • Q codes
  • Temporary codes pending CMS approval to become a CPT code (HCPCS Level I)
  • R codes
  • Diagnostic Radiology codes
  • S codes
  • Temporary National Codes (non-Medicare)
  • T codes
  • National T codes Established for State Medicaid Agencies
  • V codes
  • Vision Services
  • Hearing Services
  • For Additional Information visit the CMS website.

    Contact us if you’re interested in learning more about HCPCS Level II codes.