HCPCS coding and professional standards

HCPCS code system

HCPCS codes are mainly used to code drugs, supplies, and services that are not part of the CPT code system. Codes are assigned using a system similar to CPT.

HCPCS is organized into two levels, and the exam refers to them by those names. Level I is the CPT code set. It is maintained by the American Medical Association and is used to report the services and procedures performed by physicians and other qualified healthcare professionals; its codes are five numeric digits (e.g., 99213). Level II is the national code set maintained by CMS, and it is what people usually mean when they say “HCPCS codes.” It covers the products, supplies, and services that CPT does not - ambulance transport, durable medical equipment, prosthetics, orthotics, medical supplies, and certain drugs - and its codes are one letter followed by four numbers (e.g., E0114 for crutches). A third level of local codes once existed, assigned by individual payers, but it was discontinued; only Levels I and II are in use today.

HCPCS code set and manual

HCPCS codes have five alphanumeric characters, beginning with one letter followed by four numbers. HCPCS uses coding conventions for special instructions relating to specific codes. The modifiers for HCPCS are codes composed of two alphanumeric characters. The HCPCS modifiers do not change the description of the code, but rather provide additional information or describe extenuating circumstances. For example, the code E0114 (crutches) paired with the modifier LT becomes E0114-LT, indicating the crutch was used on the patient’s left side - the five-character code identifies the item, and the two-character modifier adds the detail the code alone can’t capture. Like the CPT manual, the HCPCS manual is divided into an Alphabetic Index and a Tabular List. As with the CPT, procedures and services are looked up in the Alphabetic Index, and the code (or codes) is then confirmed as the most accurate and appropriate using the Tabular List. The HCPCS manual has no subsections, categories, or subcategories; it has only sections. An appendix contains all the HCPCS modifiers and their descriptions. The HCPCS codes are updated annually by CMS.

The coding steps for HCPCS are almost identical to those for CPT codes. Clinical documentation is the starting point for HCPCS coding. The final code selected should add nothing to or omit anything from the description in the medical documentation. The final step is determining whether the code selected can stand alone or requires a modifier to further define or add needed information.

Sometimes HCPCS codes are used along with CPT codes, especially in the medical office setting. For example, a 67-year-old patient comes in for an annual physical examination and influenza vaccine; the visit would include the E/M code for the patient visit and also HCPCS codes for the administration of immunization.

Common HCPCS coding guidelines

Ambulance transportation, medical and surgical supplies, and durable medical equipment are among the most common categories that require HCPCS codes.

Ambulance transport

HCPCS codes for ambulance transport range from A0021 to A0999. These codes require specific modifiers to be added to ensure code specificity, and they cover various forms of medical transport, including ambulance services, non emergency transportation, and medical supplies used during the transport.

Medical and surgical supplies

HCPCS codes for medical and surgical supplies range from A4000 to A6513. The HCPCS manual provides some figures that offer guidance as to what the medical and surgical supplies look like, so that they can be billed properly. Medical assistants can code only for medical and surgical supplies purchased by the medical office. For example, pharmaceutical and medical equipment representatives can provide the medical office with some supplies that can be used for patient care. However, it is unethical to bill the patient’s insurance company for supplies that were given to the provider for free. All medical and surgical supplies used during patient care should be documented on the encounter form in the patient’s health record.

Durable medical equipment

HCPCS codes for durable medical equipment range from E0100 to E1841. Examples of durable medical equipment include crutches, wheelchairs, walkers, and other products that assist patients with mobility. Some equipment is kept in the medical office inventory. If the practice purchases the medical equipment wholesale, it may charge patients or their insurance company the retail value of the equipment, but the amount actually reimbursed is governed by the payer’s fee schedule (for example, Medicare’s DMEPOS fee schedule) - so the billed retail charge and the amount collected are often different. Just as with medical and surgical supplies, it is important for the provider to document the dispensing of durable medical equipment on the encounter form or health record.

The CPT and HCPCS coding manuals are updated and published every year. The updated manuals should be ordered in the early fall so that they arrive in time for the medical assistant to review them. Always use the current year’s manuals so that the codes are accurate. The introduction in each manual discusses and highlights changes or new coding guidelines. Annual updates should be uploaded to reflect any coding changes in the encoder to ensure that all codes are up to date for the current year.

Legal and ethical issues

Medical assistants are responsible for keeping up to date on CPT coding to ensure that no fraud takes place in the coding and claims submission process. Medical assistants should also ensure that proper precautions are taken to avoid incorrect coding, data entry errors, and false claims submissions, because these activities can be considered fraud.

Unbundling occurs when a coder reports two or more component codes separately instead of the single comprehensive code that already covers those components together. Medical coders should be familiar with the National Correct Coding Initiative (NCCI) edits, published every year by CMS, which flag code pairs that should not be billed separately. Medicare can cite a healthcare facility for fraud or abuse (or both) if claims submitted by the facility regularly show unbundled codes. Not only is unbundling an unethical practice, it incurs very stiff monetary penalties. According to the Civil Monetary Penalties Law, medical practices can be cited for penalties of up to $50,000 per violation, and assessments of up to three times the amount claimed for each item or service, or up to three times the amount of remuneration offered, paid, solicited, or received.

Patient-centered care

It is important for anyone who does coding to be able to explain to patients what those codes mean. When statements are sent to patients, many call the healthcare facility and ask for an explanation of the charges. A common question is “Why is the charge for my office visit so high?” By looking at the CPT E/M code, you can see the level of history taking, physical examination, and medical decision making for that visit. You can help patients understand that it is not just the face-to-face time that determines the level of an office visit. If an extensive history and examination are done and a lot of tests must be reviewed, the E/M code will be at a higher level. That higher level warrants a higher charge. Most patients understand once all of the criteria have been explained to them. When you make these explanations with a pleasant attitude, patient satisfaction also improves.