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HCPS Level I

HCPS Level I

The Healthcare Common Procedure Coding System, or HCPCS as it is commonly abbreviated, refers to a system of codes utilized by health care providers to streamline the medical billing process. The HCPCS allows for more efficient claims filing by simplifying and standardizing the coding system across the nation. All healthcare providers who transfer electronic patient health information (ePHI) across networks must adhere to the HCPCS standards under the Healthcare Portability and Accountability Act (HIPAA). The HCPCS is divided into two parts, referred to as Level I and Level II.

HCPCS and the CPT

Level I of the HCPCS is based off of the coding index known as the Current Procedural Terminology, or CPT, which is a universal index created and maintained by the American Medical Association (AMA). Level I codes are numerical only as opposed to the alphanumerical codes utilized in level II and they include descriptions of the services to which the codes correspond.

The CPT upon which the HCPCS is based is utilized to standardize billing of health insurance companies and government programs such as Medicare and Medicaid. The codes in the CPT and HCPCS refer to procedures or services performed by health care providers for each patient.

Purpose of the HCPCS Level I

The goal of the universal adoption of the HCPCS under HIPAA is to streamline and codify the electronic medical billing process between health care providers and insurance companies. The ultimate result would be a smooth and efficient public health care system in which input error has been eliminated and reimbursement occurs at the optimal rate. However, level I does not account for extra codes such as equipment used or supplies.

Proposed outcomes of the adoption of the HCPCS include:

  • Decreased errors in transcriptions of services rendered
  • Faster claims filing and reimbursement of services rendered
  • Improved communication across various health care providers
  • More accurate description of procedures through annual updates by the AMA

HCPCS Requirements

Under the HIPAA and Affordable Care Acts, all health care providers or insurance companies transmitting personal health information electronically or taking part in any public health program must utilize the HCPCS. HIPAA also requires that standards be set for the HCPCS coding procedure and tasked the Centers for Medicare and Medicaid Services (CMS) with the responsibility of ensuring these standards.

The CMS ultimately removed a third level of the HCPCS and reduced it to the current two levels of codes. Quest National Services is a leading expert on assisting medical practices and facilities in HIPAA and electronic medical billing compliance.