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The Healthcare Common Procedure Coding System (HCPCS<\/a>, pronounced \u201chix-pix\u201d) maintained by the Centers for Medicare & Medicaid Services (CMS) comprises two medical code sets, HCPCS Level I and HCPCS Level II.<\/p>\n Level I consists of the Current Procedural Terminology\u00a9 <\/sup>(CPT<\/a>), a classification index which, as Applied Policy has previously discussed<\/a>, is developed, maintained, and copyrighted by the American Medical Association.<\/p>\n With nearly 11,000 codes, CPT is obviously extensive. But it is far from comprehensive and is not intended to be. As its unabbreviated name states, CPT\u2019s focus is the medical procedures<\/em> provided and performed by physicians and other healthcare professionals. It was not developed to allow for the classification of thousands of medical products and services, especially those used or delivered outside of an office setting.<\/p>\n HCPCS Level II fills this classification gap by providing a coding system for such items as durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) used outside of a physician\u2019s office; drugs and biologicals not classified by CPT; ambulance services; and even certain episodes of chaplain spiritual care<\/a>.<\/p>\n Level II codes are developed and maintained by CMS. Because they are developed in response to market interests as well as emerging science and technology, Level II codes evolve more rapidly than Level I codes.<\/p>\n There are currently HCPCS Level II codes for nearly 8,000 separate categories of medical services and items. They can be distinguished from Level I\/CPT codes by their naming convention. Both Level I and Level II codes are five characters in length. While Level I codes are almost always numeric, Level II codes always begin with single alphabetical character, ranging from A to V, followed by four numbers.<\/p>\n In coding and policy discussions the term HCPCS is typically used in reference to Level II codes, while Level I codes are referred to as CPT codes. Categories of HCPCS codes are often referred to by their leading letter. For example, one might hear discussions of E codes for DME, J codes for drugs delivered intravenously or by injection, or L codes for orthotics and prosthetics.<\/p>\n CMS offers and recognizes sets of codes for unique circumstances which may be specific to payment models or product classification or the lack thereof.<\/p>\n C codes, also known as \u201cpass through codes,\u201d are temporary pricing codes used for new procedures, drugs, biologicals, or radiopharmaceuticals without other coding assignments. They can be used for a minimum of two years and are typically replaced with permanent codes. Established to facilitate the implementation of Section 201 of the Balanced Budget Refinement Act (BBRA) of 1999, C codes were originally restricted to use for hospital outpatient department procedures and items qualifying for pass through payment under the Outpayment Prospective Payment System. They are now also used by other providers under other payment systems.<\/p>\n G codes are used for procedures and services which might be expected to have a CPT code, but for which no adequate CPT code exists. Q codes are used in Medicare claims processing for drugs, biologicals, or medical equipment not yet identified by a permanent HCPCS codes.<\/p>\n In some instances, it may be necessary for a supplier to use a \u201cmiscellaneous\/not otherwise classified\u201d code in submitting a claim. While the use of a miscellaneous code might sound arbitrary, such submissions are recognized by CMS as appropriate when no existing code adequately describes an item or service which is rarely used or for which an application is pending.<\/p>\n CMS maintains a set of two-character code modifiers which is published<\/a> as part of the HCPCS code set.\u00a0 These modifiers, which may consist of one letter and one number or two letters, are used when additional information or specificity is required regarding the provision of an item or service. A \u201cUE\u201d modifier, for example, would indicate that a product was used, while a \u201cNU\u201d modifier would be used to specify that a product was new.<\/p>\n HCPCS Level II also includes a subset of dental codes which are published, copyrighted, and licensed by the American Dental Association (ADA<\/a>) and over which CMS does not have jurisdiction.<\/p>\n While anyone can request the establishment of a new Level II code and\/or the revision or discontinuation of an existing one, such requests are generally made by drug or device manufacturers for whom having a HCPCS classification is a crucial step towards reimbursement.<\/p>\n CMS maintains a quarterly HCPCS coding cycle for drugs or biologicals and a bi-annual coding cycle for non-drug, non-biological items or services, but notes<\/a> that it may not always be able to accommodate every request received in a given cycle and may need more than a single cycle to complete \u201cparticularly complex or multi-faceted decision(s).\u201d The agency may also consider applications outside of regular cycles in the event of a public health emergency or urgent circumstances.<\/p>\n CMS instituted these coding cycles beginning in January 2020, stating it was an effort to facilitate the launch of new products into the marketplace for providers and patients. Prior to 2020, CMS only accepted and reviewed HCPCS Level II code applications annually.<\/p>\n HCPCS Level II applications and supporting documentation must be submitted through the Medicare Electronic Application Request Information SystemTM<\/sup> (MEARIS<\/a>TM<\/sup>).* This is also a newer development to the HCPCS Level II code application process. At the end of 2021, CMS noted that moving forward it would only accept HCPCS Level II applications submitted via the MEARIS system, previously submitted by paper or more recently, email. The MEARIS system allows CMS to better track applications and streamline the review process, helpful for both the agency and applicants. However, technical components of the MEARIS system including character restrictions for responses, limited places to upload attachments, and specific questions and answers that do not always apply can sometimes make the process challenging for applicants.<\/p>\n Applications are considered by CMS\u2019s HCPCS Workgroup made up of physicians and healthcare professionals within CMS, as well as other pertinent federal agencies such as the Department of Veterans Affairs and the Department of Defense.<\/p>\n In reviewing requests for new codes, the Workgroup considers<\/a> whether a product performs a significantly different function or operates in a significantly different manner from items in existing coding categories. The company requesting the code must show in the application that there is a significant therapeutic distinction compared to existing coded treatments or products.\u00a0 The application includes other questions to distinguish why a new code is needed. For example, for devices, there are questions pertaining to the coding for the FDA predicate device, and why the new device should not be coded in the same manner.<\/p>\n For requests for non-drug, non-biological items or services, the Workgroup makes a preliminary recommendation on applications in advance of a public meeting<\/a> at which applicants and other interested parties have a chance to respond. The preliminary decisions are typically published three weeks before the public meeting, which is usually held over three days. Public stakeholders, including applicants, can submit written comments in response to the preliminary decision the day of the public meeting in which the application was discussed. Following the meeting and public feedback, CMS issues final decisions about 60 days after the public meeting.<\/p>\n As mentioned, there are two coding cycles per year for non-drug and non-biological items. For the first cycle, applications are due the first business day of January, the public meeting is held in June and the final decisions are published in July\/August. Finalized codes are then effective in October. For cycle 2, applications are due the first business day of July, preliminary decisions are published in the beginning of November, the public meeting is held at the end of November\/beginning of December, and final decisions are announced in January of the following year. Finalized codes are effective the following April.<\/p>\nThe mechanics<\/strong><\/h3>\n
Special categories and special circumstances<\/strong><\/h3>\n
HCPCS development and revision<\/strong><\/h3>\n