Published: Feb 14, 2023
Healthcare Policy

HCPCS Codes: Everything You Need to Know

Rex H.
Rex H.
8 minute read
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When creating good faith estimates (GFEs), you must be familiar with Healthcare Common Procedure Coding System (HCPCS) codes. These codes consist of HCPCS Level I codes and HCPCS Level II codes. Health providers and medical coders use HCPCS codes to represent medical procedures to Medicaid, Medicare, and other third-party payers.

Read on to learn more about HCPCS codes in GFEs. We'll cover the different levels of HCPCS codes, HCPCS identifiers, HCPCS examples, and No Surprises Act rules on HCPCS Codes in GFEs.


What are HCPCS codes?

Healthcare providers and medical coders use HCPCS codes to represent medical procedures to Medicaid, Medicare, and other third-party payers. Here's a breakdown of the different HCPCS levels:


Level I of the HCPCS consists of Current Procedure Terminology (CPT) codes. Maintained by the American Medical Association (AMA), these codes consist of descriptive terms and codes for reporting medical procedures and services furnished by healthcare facilities, physicians, and other providers. Healthcare professionals and medical coders use CPT codes to identify procedures and services for which they bill private and public health insurance programs.

Level I of the HCPCS does not include codes required to separately report medical services or items that are regularly billed by suppliers other than physicians.


Level II of the HCPCS is a standardized coding system mainly used to identify supplies, products, and services not included in HCPCS Level I codes, such as durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician's office. Since Medicare and other insurers cover a wide range of supplies, services, and equipment that don't fall under CPT codes, the Level II HCPCS codes were created to submit claims for these items.

The Centers for Medicare and Medicaid Services (CMS) maintains HCPCS Level II codes. HCPCS Level II codes are also called alpha-numeric codes since they consist of an alphabetical letter followed by four numeric digits. In contrast, HCPCS Level I or CPT codes have five numeric digits.

Types of Level II codes

The letter at the beginning of HCPCS Level II codes has the following meanings:

Level II Code Type



  Transportation, medical and surgical supplies, miscellaneous and experimental


  Enteral and parenteral therapy


  Temporary hospital outpatient prospective payment system


  Dental procedures. Note that D-codes are a separate category of national codes. Specifically, they're part of the Current Dental Terminology (CDT), which is copyrighted, published, and licensed by the American Dental Association (ADA). As such, the revision, addition, or deletion of CDT codes is done by the ADA.


  Durable medical equipment


  Professional services and temporary procedures


  Rehabilitative services


  Drugs administered other than through oral methods and chemotherapy drugs


  Temporary codes for durable medical equipment regional carriers


  Prosthetic or orthotic procedures


  Medical services


  Pathology and laboratory


  Temporary codes


  Diagnostic radiology services


  Private payer codes


  State Medicaid agency codes


  Vision and hearing services


As mentioned above, HCPCS Level I is the same as CPT, a numeric coding system maintained by the AMA. The AMA republishes and updates HCPCS Level I annually.


CPT-4 is the current coding system for HCPCS Level I.

CPT-5 is an effort by the AMA to create the next generation of CPT with corrections of existing problems and enhancement of existing features. It aims to ensure that the CPT meets the requirements of the Secretary of the U.S. Department of Health and Human Services (HHS) as the standard for reporting physicians' services under the Health Insurance Portability and Accountability Act (HIPAA). CPT-5 is not yet in use.

HCPCS modifiers

HCPCS modifiers are two characters (numbers or letters) added to the end of an HCPCS Level I or Level II code. These modifiers provide additional data about medical services, procedures, or supplies without changing the code meanings.

Medical coders and healthcare providers use these modifiers to explain what happened during a particular encounter. For instance, a coder may use an HCPCS modifier to indicate that:

  • Service didn't happen exactly as described by an HCPCS Level I or Level II code descriptor
  • The circumstance didn't change the code that applied

An HCPCS modifier may also offer details not included in the code descriptor, such as where the procedure happened on the body.

HCPCS Level I (CPT) modifiers

CPT or HCPCS Level I modifiers are usually two digits. Examples of the most commonly used HCPCS Level I modifiers include:

  • 25: The CPT-4 manual defines modifier 25 as a Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Same Day of the Procedure or Other Service. Coders can use modifier 25 to indicate that the patient's condition requires a separately and significantly identifiable evaluation and management (E/M) service above and beyond the other service offered.
  • 26: This modifier is called the professional component or PC. The PC is defined as a physician's service, which may include the interpretation of results, technician supervision, and a written report. Coders add modifier 26 to indicate that the physician only interprets but does not perform the test.
  • 59: Modifier 59 is called " Distinct Procedural Service." Coders can use modifier 59 to identify procedures performed at different anatomic sites, aren't usually encountered or performed on the same day, and can't be described by one of the more specific anatomic Medicare NCCI procedure to procedure (PTP) modifiers.
  • 91: Coders use modifier 91 when repeat tests are performed on the same day by the same provider to get reportable test values with individual specimens taken at different times. Coders should not use modifier 91 for testing problems and when a normal one-time result is required.

HCPCS Level II modifiers

HCPCS Level II modifiers are either alphanumeric or have two letters. Examples include:

  • E1: This stands for "Upper Left, Eyelid."
  • XS: This stands for "Separate Structure" and refers to a service that is distinct since it was performed on a separate structure or organ.
  • TC: This stands for "Technical Component" and indicates when a charge is made for the technical component alone.

HCPCS examples

An example of an HCPCS Level I is 90716, which coders can use to denote the administration of varicella or chickenpox vaccine.

Meanwhile, an example of an HCPCS Level II code is R0070. Coders use this code to denote the transportation of personnel and portable X-ray equipment to nursing homes or homes. Coders should only use this code if only one patient was served. If more than one patient was served, coders should use code R0075, which reflects multiple patients being served.

No Surprises Act Rules on HCPCS Codes in Good Faith Estimates

The No Surprises Act is best known for requiring medical providers and systems to make comprehensive GFEs of charges for items and services provided to self-paying and uninsured patients. However, it also provides rules on HCPCS codes in GFEs, including:

“Service Code” Definition

Before we dive into the HCPCS No Surprises Act coding rules, let's define what "service codes" means under the No Surprises Act.

According to the No Surprises Act, "service code" means:

The code that identifies and describes an item or service using the Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), Diagnosis-Related Group (DRG), or National Drug Codes (NDC) code sets.

As such, HCPCS Level I and Level II codes fall under the definition of "service code."

Coding rule for determining expected charges in GFEs

According to the No Surprises Act, HHS expects facilities and providers to use the service codes that best describe the service or item listed in the GFE.

Accordingly, if a single service code captures reporting and billing for the component parts of a service or item, coders should use that service code and report the expected charge for that service code in the GFE. They don't have to include the component parts in the GFE since they would not be separately billed or reported.

Example coding scenario provided by CMS

For instance, HCPCS Level I code 85027 represents a lab test that measures a patient's hemoglobin, hematocrit, leukocyte, red blood cell count, and platelet count.

There are also HCPCS Level I codes for each of the component parts of the service represented by 85027, such as 85014 (for the hematocrit component), 851018 (for the hemoglobin component), and 85048 (for the leukocyte component). However, HHS only expects the GFE to include expected charges for 85027 since there is a single code available that captures reporting for all of the component parts of the service.

Generate accurate patient cost estimates using the right codes with MD Clarity

Generating accurate estimates with the right codes can be trying, especially when you have limited resources and personnel.

Fortunately, MD Clarity's Clarity Flow software is here to help. Reliable and user-friendly, Clarity Flow provides transparency for patients and your staff. Besides generating No Surprises Act-compliant estimates with accurate HCPCS codes, it can:

  • Autosend GFEs through mail, email, or text
  • Project out-of-pocket costs at a high level of accuracy
  • Enable patients to pay upfront or make payment plan elections online directly from their estimates

Interested in seeing how Clarity Flow can help you? Request a demo today.

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