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Medical providers can use the Healthcare Common Procedure Coding System (HCPCS) to accurately and efficiently submit claims for reimbursement and insurance coverage to various insurance providers, including Medicare and Medicaid. The practical and accurate processing of insurance claims relies heavily on these codes.

This blog will discuss the importance of these codes and how they differ from other types of coding terminology.

What are HCPCS codes used for?

These codes identify treatments, supplies, equipment, and services for Medicare and private health insurance beneficiaries. These 5-digit codes, based on the American Medical Association’s Current Procedural Terminology, are used by many insurance companies to assist physicians in filing claims for payment smoothly and accurately.

These coding systems provide crucial tasks for hospital payments, physician reimbursement, quality assurance, benchmarking analysis, and gathering general medical statistics data. Additionally, these codes help create an accurate and efficient reimbursement process that enables medical professionals and other individuals to avoid the hardships of insurance procedures and receive the money they deserve.

What are the types of HCPCS codes?

The two separate levels of Healthcare Common Procedure Coding System codes, as described below:

Level I: These are CPT codes, which are a set of codes and descriptive phrases used to describe medical services and procedures provided by healthcare institutions, other providers, and physicians. The AMA updates and maintains the CPT codes annually.

Level II: When used outside of a physician’s office, durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), and ambulance services are examples of items that are not covered by CPT codes and are identified using Level II of the Healthcare Common Procedure Coding System, a standardized coding system.

What is the difference between HCPCS and CPT codes?

Healthcare common procedures and coding system codes are used for fundamental healthcare services, including medical equipment and other supplies. These codes provide a uniform description of the services. Procedures, diagnostic testing, E&M, and other services employ CPT codes. However, the key differences between the two terminologies are explained here.:

Differences (Healthcare Common Procedure Coding System) Codes (Current Procedural Terminology) Codes



These codes are used for billing Medicare and Medicaid Services.


Cpt codes are used for billing services provided by healthcare providers.




These codes will likely cover the medical equipment and supplies for the assistance of many insurance-providing organizations.


Cpt codes are likely to aid physician services and procedures e towards


Number of levels


These codes are generally divided into two distinct levels:

Level I (CPT)

Level II (HCPCS)



They are divided into 3 distinct categories.

1. Descriptors correspond to a procedure or service.

2. Supplemental codes for performance measurement.

3. Temporary alphanumeric codes for technology, procedures, and services


Structure of the code


These codes consist of a single letter followed by four digits.


These codes consist of five alphanumeric characters.


Third-party payers


Medicare, Medicaid, and other payers

Use these codes.


Private insurance companies primarily use CPT codes.


Flexibility in Billing


Allows more specific billing for non-physician services


Primarily designed for physician billing


National/ Local


National Level II, Healthcare Common Procedure codes are used across the United States.


CPT codes can have regional variations



Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) are used in medical billing. By precisely identifying and classifying healthcare operations, services, and supplies, HCPCS codes serve an essential role in medical billing. However, CPT codes are more narrowly focused on procedures and services performed by physicians, while Healthcare Common Procedure Coding System codes are more generalized. Knowing the distinctions between different code sets is crucial for proper reimbursement and organized healthcare administration.

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