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Dan Murdoch

July 31, 2023
Healthcare News
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Understanding HCPCS Level 1 & Level 2 Codes: A Comprehensive Review

Healthcare professionals rely on standardized codes to represent a vast array of medical procedures, products, and services. Among these, the Healthcare Common Procedure Coding System (HCPCS) stands as one of the most pivotal. But what are HCPCS codes, and why are they so integral to the healthcare industry?

Introduction to HCPCS

The HCPCS is a collection of standardized codes employed to denote medical procedures, supplies, products, and services. This system, as defined by the National Library of Medicine, is organized into two primary subsystems: Level I and Level II.

HCPCS Level I (CPT-4 Codes)

  • Definition and Purpose: Level I is composed of Current Procedural Terminology (CPT-4 or CPT) codes. Managed by the American Medical Association (AMA), these numeric codes are paired with descriptive terms to pinpoint medical services and procedures carried out by physicians or other healthcare professionals.
  • Scope: It's crucial to note that Level I of HCPCS does not cover medical items/services typically billed by entities other than physicians.


  • Definition and Purpose: Level II of the HCPCS is reserved for products, supplies, and services not captured by CPT-4 codes. This includes specific items like ambulance services, durable medical equipment, and prosthetics used outside a physician’s office.
  • Why Level II Exists: While CPT-4 codes detail the actions of the provider, Level II codes document the items or services utilized. Despite not all payers accepting HCPCS Level II codes, many have integrated this code set, especially for Medicare claims.

Choosing the Right Code: CPT-4 vs. HCPCS Level II

Providers often encounter situations where both a CPT-4 and an HCPCS Level II code apply to the same service. Typically, Medicare mandates the use of the HCPCS Level II code. Most health insurers adhere to Medicare's guidelines, but understanding specific requirements for third-party payers is crucial. Understanding the nuances between related CPT-4 and HCPCS Level II codes ensures accurate submission for procedures or services.

Coding Assistance and Resources

  • PDAC: The pricing, coding analysis, and coding (PDAC) contractor is a valuable resource for suppliers and manufacturers. They offer guidance on the appropriate HCPCS code for billing Medicare, especially for DMEPOS items.
  • AHA Clearinghouse: Established in collaboration with CMS, the AHA clearinghouse aims to address questions on HCPCS usage. This institution provides crucial interpretation and understanding, particularly for hospitals and professionals billing under the hospital outpatient prospective payment system (OPPS). The AHA clearinghouse is a central point for education on HCPCS coding.

Updates and Structure

HCPCS undergoes quarterly updates. However, an annual list of current CPT/HCPCS codes is also accessible.

Level II HCPCS codes are structured with five characters, starting with a letter (A-V) followed by four numbers. The initial letter denotes the code chapter, effectively grouping similar items. For instance, 'J codes' begin with the letter J and are commonly employed to represent non-oral medication and chemotherapy drugs.

Deep Dive into HCPCS Level II Code Ranges

The Healthcare Common Procedure Coding System (HCPCS) Level II is an integral component of the medical billing and coding landscape. These codes encompass a vast spectrum of services, treatments, devices, and supplies. To better understand this expansive system, let's explore more of these specific code ranges and their associated categories:

A0021-A0999: Ambulance and Other Transport Services and Supplies

  • These codes cover the gamut of patient transportation, including emergency services and routine transfers between medical facilities.

J0120-J8999: Drugs Administered Other than Oral Method

  • This range is dedicated to medications given to patients through non-oral means, such as injections or intravenous methods.

L5000-L9900: Prosthetic Procedures

  • This segment deals with prosthetics, artificial devices that replace a missing part of the body. The codes cover everything from limbs to dental prosthetics.

A2001-A2013: Matrix for Wound Management

  • These codes are used for various wound management techniques, whether they involve placental, equine, or synthetic matrices.

C1052-C1062: Other Therapeutic Procedures

  • Within this range, you'll find codes related to therapeutic procedures that don't fit neatly into other categories.

E0100-E8002: Durable Medical Equipment

  • This broad category covers equipment that provides therapeutic benefits to patients due to a medical condition or illness. This can include wheelchairs, CPAP machines, or home oxygen equipment.

G0008-G9987: Procedures / Professional Services

  • These codes are employed for various medical procedures and professional services rendered to patients.

M0075-M0301: Miscellaneous Medical Services

  • A category for assorted medical services that don't necessarily fit into other predefined categories.

P2028-P9615: Pathology and Laboratory Services

  • Here, you'll find codes that pertain to diagnostic tests, screenings, and other lab-based services.

V2020-V2799: Vision Services

  • This range is dedicated to vision-related services, from routine eye exams to specific treatments for eye conditions.

B4034-B9999: Enteral and Parenteral Therapy

  • These codes revolve around therapies that deliver nutrients directly to the digestive system (enteral) or directly into the bloodstream (parenteral).

K0001-K0900: Durable Medical Equipment (DME) for Medicare Administrative Contractors (MACs)

  • Specifically for DME related to Medicare, these codes help in classifying and billing for equipment under Medicare specifications.

Q0035-Q9992: Temporary Codes

  • As the name suggests, these are temporary codes introduced for emerging services, treatments, or equipment until they get a permanent classification.

By understanding these ranges in detail, healthcare providers can ensure they're using the correct codes for their services, leading to more accurate billing and fewer denied claims. This in-depth knowledge is also invaluable for medical coding professionals to stay updated and proficient in their roles.

The Future of HCPCS with Advancements in AI Technology

With the medical field constantly evolving, the manner in which services are coded and billed must keep pace. Enter the world of Artificial Intelligence (AI) — a realm that holds the promise to significantly streamline the complexities of medical billing.

Adonis's recent advancements in AI are set to revolutionize the way healthcare providers approach HCPCS Level II coding. By integrating AI and machine learning, Adonis offers a platform that can automatically detect, classify, and code procedures, supplies, and equipment, minimizing human errors and reducing the time spent on manual data entry.

Furthermore, with AI-driven predictive analytics, Adonis's platform can also foresee coding trends and make recommendations, ensuring that healthcare providers stay ahead of the curve and maintain compliance with ever-evolving coding standards.

In conclusion, as the HCPCS Level II code system continues to expand and diversify, innovations like those from Adonis will play a pivotal role in ensuring accuracy, efficiency, and compliance in the healthcare billing landscape. The fusion of healthcare coding and AI signifies a brighter, more streamlined future for providers, patients, and payers alike.

To learn more about how Adonis can help you as a healthcare professional, please use the calendar link below to schedule quick demo.

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