Coding 101: What are HCPCS codes?

During our discussions with clients we frequently receive questions on exactly what are HCPCS codes and how are they developed. In the coming weeks we will be sharing knowledge and insights on common customer questions. Today we’ll be discussing HCPCS codes.

The acronym HCPCS (usually pronounced “hick-pick”) stands for Healthcare Common Procedure Coding System and it is comprised of two separate code systems. The first coding system is known as Current Procedural Terminology (CPT®) or Level I HCPCS codes. These codes are maintained by the American Medical Association (AMA) and serve as the coding system by which physicians bill for the various services and procedures that they render. CPT® codes, in general, do not provide a coding system for specific products used during a procedure, therefore that is why CMS created a second code set known as Level II HCPCS codes, which are the codes that RJ Health Systems has specialized in for the past 16-years. The level II codes are utilized for drugs, supplies, durable medical equipment, and for filling in gaps within the CPT coding system. There is a universal need for accurate HCPCS data – Payors, Physicians, Manufacturers, and Service Providers must be fluent in HCPCS codes (and their underlying NDC’s, but that’s a different Blog post).

The Level II HCPCS coding structure starts with a letter and are followed by 4 digits. The specific letter that a code starts with is specific to the type of product that is coded to the code. The following chart shows the various code types:

Level II HCPCS Code Type
What does it include?
Example
   A-Codes*
Transportation, Medical & Surgical Supplies, Diagnostic and Therapeutic Radiopharmaceuticals
A9556 – Gallium Ga-67 citrate, diagnostic, per millicurie
    B-Codes*
Enteral and Parenteral Therapy
B4103 – Enteral formula, for pediatrics, used to replace fluids and electrolytes (e.g., clear liquids), 500 mL = 1 unit
    C-Codes**
Temporary Hospital Outpatient Prospective Payment System
C9473 – Injection, mepolizumab, 1 mg
    E-Codes*
Durable Medical Equipment
E0607 – Home blood glucose monitor
    G-Codes*
Temporary Procedures & Professional Services
G0008 – Administration of influenza virus vaccine
    H-Codes***
Rehabilitative Services
H0001 – Alcohol and/or drug assessment
    J-Codes**
Drugs, biologicals, and chemotherapy
J1745 – Injection infliximab, 10 mg
    K-Codes***
Temporary Codes for Durable Medical Equipment Regional Carriers
K0001 – Standard wheelchair
    L-Codes***
Orthotic/Prosthetic Procedures
L0140 – Cervical, semi-rigid, adjustable (plastic collar)
    M-Codes***
Medical Services
M0075 – Cellular therapy
    P-Codes*
Pathology/Laboratory Services and various Blood Products
P9041 – Infusion, albumin (human), 5%, 50 mL
    Q-Codes*
Temporary Codes
Q0144 – Azithromycin dihydrate, oral, capsules/powder, 1 gram
    R-Codes***
Diagnostic Radiology Services
R0076 – Transportation of portable EKG to facility or location, per patient
    S-Codes*
Private Payer Codes (Non-Medicare)
S0073 – Injection, aztreonam, 500 mg
    T-Codes***
State Medicaid Agency Codes
T1016 – Case management, each 15 minutes
   V-Codes***
Vision/Hearing Services
V2121 Lenticular lens, per lens, single
*= Some codes, but not all, can be found on the current ReimbursementCodes website
**= All codes can be found on the current ReimbursementCodes website
***= No codes can be found on the current ReimbursementCodes webiste

These codes can equate to a $15 to $20 PMPM spend for Payors. And well over 50% of the billings from Specialist Practice areas are drug products.  So, the reliability and accuracy of the code assignments for Specialty drugs has significant cost implications to all involved.

At RJ Health Systems, our expertise in the coding of drugs has led to the establishment of industry standard data and the development of productivity and analysis tools that assist our various types of clients with Medical Pharmacy trend management. As the industry’s authoritative source, we maintain an updated pricing database for all drug codes, which is utilized by the vast majority of health plans in the United States. Through the use of our data and tools our customers realize increases in claim accuracy and pricing, which results in savings.

To see our various tools, or to learn more about our data please contact info@rjhealthsystems.com for a demonstration.

Best,

Todd Cooperman, PharmD, MBA, R.Ph.
VP, Drug Information Services and Data Analytics

RJ Health Systems