The Healthcare Common Procedure Coding System (aka: HCPCS) is an important standardized coding system used for submitting medical claims and health insurance claims.
These two medical code sets system includes HCPCS Level I, which are commonly called CPT codes, and HCPCS Level II codes, helping medical coders, healthcare professionals and non‑physician services identify and bill for medical procedures, medical services, durable medical equipment and ambulance services.
HCPCS ensures correct claims processing, accurate reimbursement and compliance with billing regulations. The Centers for Medicare and Medicaid Services developed these codes for insurance uses.
If you are interested in a career in medical coding, you'll be using HCPCS codes on a regular basis. Let's get into how HCPCS codes are structured and the best practices for using them.
Structure of HCPCS codes
HCPCS codes follow a standardized code structure. The structure starts with a single letter prefix—such as J codes, E codes, G codes, C codes, Q codes, I codes, A codes—followed by four numbers. This structure assigns the codes to specific code chapters, creating HCPCS Level II code descriptors that are easy to recognize.
Examples of HCPCS code chapters
J codes: identify injectable drugs
E codes: cover durable medical equipment
G codes and Q codes: used for temporary or miscellaneous code assignments
C codes: used for specific procedure bundles, commonly used for Medicare claims
HCPCS level I and level II codes
HCPCS is broken up into two levels, according to Phil Arbogast, instructor at Rasmussen University.
Level I consists of the Current Procedural Terminology (CPT®) codes, capturing outpatient procedures, diagnostic tests and professional services. “For example, a patient scheduled for a tonsillectomy at an ambulatory surgery center would be captured by a CPT code,” Arbogast explains.
“Level II, on the other hand, consists of medical supplies, durable medical equipment and medications,” Arbogast says. “Using coding guidelines and coding conventions, medical coders assign these codes based on clinical documentation for the purpose of establishing correct reimbursement and statistical analysis.”
Additionally, CPT codes are maintained by the American Medical Association®, which describes the services typically performed in physician offices, hospitals and outpatient settings.
HCPCS Level II codes mostly consist of non‑physician services not covered by CPT codes.
Comparison with other coding and code sets
HCPCS is distinct from other coding systems. Here are some examples, if you aren't familiar:
ICD‑10‑CM: used for diagnosis coding and health statistics
NDC codes: identify prescription drugs, separate from HCPCS
CPT codes: part of HCPCS Level I, describe procedural elements
Understanding the difference between these coding systems—and the relationship between HCPCS levels, CPT codes, ICD‑10‑CM and NDC codes—is important for you to learn how to bill procedures accurately.
Real-life examples of HCPCS codes
That’s all well and good, but it’s easier to understand the codes when you see them working in real life. Arbogast explains how both CPT® and HCPCS codes work in an emergency scenario.
Let’s say an elderly patient trips and falls in their kitchen, striking their scalp on the countertop and presenting to the ER for care, Arbogast begins. “They receive a physical exam by a provider, a CT of the head and a laceration repair of the scalp.”
“There will be a CPT code to capture the professional services, a CPT code to capture the head CT, and a CPT code to capture the laceration repair,” Arbogast says. “Additionally, the local anesthetic agent, the sutures and any analgesics administered will be captured via HCPCS Level II codes."
In other words, the doctor’s evaluation, the CT scan and the scalp repair are captured with CPT codes, while the anesthetic, sutures and pain medication fall under HCPCS Level II. This mirrors Arbogast’s earlier explanation that Level I CPT codes are used for tests, diagnoses, and professional services, while Level II covers medical supplies and medications.
HCPCS code updates and specialized code sets
The Center for Medicare and Medicaid Services website releases coding changes on a quarterly basis. New code additions, revisions of existing codes and deletions are routine. Within HCPCS Level II, specialized code sets include:
G codes: for services pending permanent code assignment
C codes: for billing under Medicare Administrative Contractors or bundled payment models
Q codes: for miscellaneous or temporary procedures
If you want to be in the medical coder field or other professional career that uses HCPCS codes, you must keep track of these changes to maintain accuracy in your code chapter assignments and HCPCS code descriptors.
Best practices for HCPCS coding
Now that you know what HCPCS codes are and how to use them, here are some tips to take your medical coding career to the next level. Plus, these tips will also help you ensure accurate billing and full compliance.
Stay updated on coding changes, new codes, and quarterly releases.
Use HCPCS codes alongside CPT® codes and ICD‑10‑CM codes to fully describe medical procedures and services provided.
Pay close attention to HCPCS Level II codes, especially for durable medical equipment, ambulance services and other supplies.
Regularly audit submitted claims to verify correct code usage and HCPCS code descriptors.
Engage in ongoing training to understand CPT, HCPCS and non‑physician services coding.
Resources for HCPCS Coding
If you think that a medical coding career is right for you, here's a few places to get started.
- Learn more about CPT codes in this easy introduction.
- Read about 11 strange ICD-10 codes you hope to never use.
- Bookmark the CMS website: official access to HCPCS updates, billing guidelines, and two medical code sets.
- Bookmark the AMA® website: for CPT codes, guidelines, and education.
The future of medical coding
HCPCS codes are the backbone of medical billing systems, so that providers are compensated accurately for medical procedures, supplies and services. The integrated system of HCPCS Level I (CPT codes) and Level II codes captures the whole picture of healthcare delivery—from physician services to durable medical equipment and ambulance services.
As healthcare technologies advance, CMS continues to add new codes that reflect innovative treatments and emerging procedures. Staying updated with HCPCS code updates and the procedural coding system is important if you want a career as a healthcare professional, medical coder, billing staff or a third‑party payer to maintain accuracy, compliance, and efficiency in healthcare reimbursement.
Want to learn more about medical coding now that you are a HCPCS code expert? Check out Where Do Medical Coders Work? 7 Settings That Might Surprise You.
1American Medical Association® is a registered trademark of American Medical Association
2CPT® is a registered trademark of American Medical Association
