What is the difference between HCPCS Level 1 and Level 2 codes?

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HCPCS Level 1 codes are five-digit numeric Current Procedural Terminology (CPT) codes used to report medical procedures and professional services, while HCPCS Level 2 codes are alphanumeric codes (one letter followed by four numbers) used to identify products, supplies, and services not included in Level 1, such as durable medical equipment, ambulance services, and drugs.

Key Differences

  • Purpose: Level 1 captures clinical procedures and physician services (like surgeries and evaluations). Level 2 captures tangible items, equipment, and non-physician services (like wheelchairs, injections, or bandages).
  • Format: Level 1 codes are strictly numeric (five digits). Level 2 codes are alphanumeric, starting with a single letter (like A, E, or J) followed by four numbers.
  • Management: Level 1 is maintained and copyrighted by the American Medical Association (AMA). Level 2 is maintained and overseen by the Centers for Medicare & Medicaid Services (CMS).

What are the four types of HCPCS level 2 codes?

The four main types of HCPCS Level II codes are permanent national codes, temporary codes, miscellaneous codes, and modifiers.

1. Permanent National Codes

  • Purpose: Maintained by the Centers for Medicare & Medicaid Services (CMS) workgroup, these standard codes are used by all public and private insurers.
  • Format: Consist of a single letter followed by four numbers (e.g., A-series for transportation or E-series for durable medical equipment).
  • Updates: Updated annually on January 1st.

2. Temporary Codes

  • Purpose: Established to meet immediate operational and informational needs for new items or services before a permanent code is created.
  • Format: Use specific letters as prefixes, such as C, G, K, Q, S, H, or T.
  • Updates: Reviewed and updated on a quarterly basis.

3. Miscellaneous (Not Otherwise Classified) Codes

  • Purpose: Used when a provider submits a claim for a new service, supply, or drug that does not have a specific permanent or temporary code.
  • Usage: Prevents delays in billing while waiting for the next official code update cycle, though they often require manual review and detailed documentation by the insurer.

4. Modifiers

  • Purpose: Two-character alphanumeric or alphabetic add-ons attached to a primary HCPCS code to provide extra details about the service or item.
  • Usage: Clarifies specific circumstances, such as which side of the body an item applies to or specific ambulance journey details.

When to use HCPCS level 2?

Use HCPCS Level II codes when submitting claims for medical supplies, services, equipment, and drugs that are not included in the standard CPT (HCPCS Level I) code set.

When to Apply HCPCS Level II Codes

  • Durable Medical Equipment (DME): Reporting items like wheelchairs, walkers, or hospital beds (using E-codes).
  • Medical Supplies & Injections: Billing for surgical dressings, catheters, or non-oral/injectable drugs administered during a visit (using A-codes or J-codes).
  • Transportation Services: Documenting ambulance rides and specialized transit (using A-codes).
  • Orthotics and Prosthetics: Fitting braces, artificial limbs, or supports (using L-codes).
  • Payer-Specific Mandates: Providing required billing data for Medicare, Medicaid, or specific commercial health plans when standard CPT detail is not specific enough.

Do all insurance carriers accept HCPCS Level II codes?

Not all insurance carriers accept HCPCS Level II Codes.

Acceptance and Adoption

  • Commercial Acceptance: While many private payers and third-party insurers have adopted the HCPCS Level II Coding System for items like durable medical equipment, supplies, and injections, adoption is not universal.
  • Not a Guarantee of Coverage: The existence of a valid HCPCS Level II Code Set does not mean a specific private insurance carrier covers or reimburses the item.
  • Payer Rules: Medical coders must verify individual policy guidelines and contract rules with each third-party payer before submitting claims.

What is the difference between CPT codes and HCPCS Level 2 codes?

The main difference is that CPT codes (HCPCS Level I) describe medical procedures and services performed by clinicians, while HCPCS Level II codes cover supplies, equipment, and medications not found in the CPT set.

What are CPT Codes?

  • Purpose: Describe professional medical, surgical, and diagnostic services.
  • Format: Five numeric digits.
  • Management: Created and owned by the American Medical Association (AMA).

What are HCPCS Level II Codes?

  • Purpose: Identify products, supplies, ambulance services, and durable medical equipment (like wheelchairs or braces).
  • Format: Alphanumeric, starting with one letter followed by four numbers.
  • Management: Maintained by the Centers for Medicare & Medicaid Services (CMS).

HCPCS Level II Coding: Demystifying Services, Supplies, and Modifiers

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What is HCPCS level 1 and 2?

The Healthcare Common Procedure Coding System (HCPCS) is a standardized coding system used by insurers and providers to process medical claims, divided into two main levels.

HCPCS Level I

  • Definition: Comprises Current Procedural Terminology (CPT®) codes.
  • Format: Five-digit numeric codes.
  • Managed by: Maintained by the American Medical Association (AMA).
  • Purpose: Used to report medical, surgical, and diagnostic services and procedures performed by physicians and other healthcare professionals.

HCPCS Level II

  • Definition: A standardized alphanumeric coding system.
  • Format: Five characters starting with a single letter (A through V) followed by four numbers.
  • Managed by: Maintained by the Centers for Medicare & Medicaid Services (CMS).
  • Purpose: Used to identify products, supplies, injections, and services not included in Level I/CPT codes—such as durable medical equipment (DMEPOS), ambulance transport, and specific drugs.

What are the new HCPCS Level II codes for 2026?

The Centers for Medicare & Medicaid Services (CMS) releases HCPCS Level II codes through a comprehensive annual update alongside routine quarterly updates throughout the year.

Major 2026 HCPCS Updates

  • January 2026 Annual Update: Introduced 160 new codes, 101 deletions, and 294 long-descriptor changes covering hydrophilic catheters (A codes), new C codes for DME and implantable neurostimulators, psychiatric/telehealth G codes, and new J and Q drug/biosimilar codes.
  • April 2026 Update: Included technical corrections, retroactive adjustments like reinstating J1572 (Flebogamma), and updates to relative value units.
  • July 2026 Update: Added 39 new codes including specific drug additions like J1577 (Immune Globulin), J0528 (Fosfomycin), and J1289 (Narsoplimab).
  • October 2026 Update: Finalized 88 new codes (or 45 in specific subsets) covering wound dressings, infusion supplies, ambulatory pumps, orthotics, and breast prostheses like L8030, L8031, and L8035.

For complete official lists and file downloads of all modified, added, or deleted codes by effective date, consult the CMS HCPCS Quarterly Update resource.

Can you explain the difference between HCPCS level I and level II codes?

HCPCS Level 1 codes are five-digit numeric Current Procedural Terminology (CPT) codes used to report medical procedures and professional services, while HCPCS Level 2 codes are alphanumeric codes (one letter followed by four numbers) used to identify products, supplies, and services not included in Level 1, such as durable medical equipment, ambulance services, and drugs.

Key Differences

  • Purpose: Level 1 captures clinical procedures and physician services (like surgeries and evaluations). Level 2 captures tangible items, equipment, and non-physician services (like wheelchairs, injections, or bandages).
  • Format: Level 1 codes are strictly numeric (five digits). Level 2 codes are alphanumeric, starting with a single letter (like A, E, or J) followed by four numbers.
  • Management: Level 1 is maintained and copyrighted by the American Medical Association (AMA). Level 2 is maintained and overseen by the Centers for Medicare & Medicaid Services (CMS).

Can you use CPT modifiers for HCPCS level 2 codes?

Yes, you can use CPT modifiers with HCPCS Level II codes.

Rules for Mixing Modifiers and Codes

  • Cross-Usage is Allowed: Medical coders can use CPT (Level I) modifiers on HCPCS Level II codes, and they can use HCPCS Level II modifiers on CPT codes.
  • No General Restriction: There is no overall rule against combining code sets and modifiers as long as the specific clinical scenario supports it.
  • Payer Guidelines Apply: Always check specific insurance or payer rules, because certain modifiers only apply to specific codes or programs.

What are some examples of HCPCS Level II codes?

HCPCS Level II codes are alphanumeric codes (one letter followed by four digits) used to identify products, supplies, and services not included in the standard CPT (Level I) code set.

Common Examples by Category

  • Durable Medical Equipment (E-Codes):
    • E0110 – Crutch, underarm, wood, adjustable or fixed, pair
    • E0601 – Continuous positive airway pressure (CPAP) device
  • Medical and Surgical Supplies (A-Codes):
    • A4216 – Sterile water, saline and/or injection, sterile water, 10 ml
    • A4351 – Intermittent urinary catheter, straight tip
  • Drugs Administered Other Than Oral Method (J-Codes):
    • J9355 – Injection, trastuzumab, excludes biosimilar, 10 mg
    • J3490 – Unclassified drugs
  • Temporary Procedures and Professional Services (G-Codes):
    • G0202 – Screening digital mammography, bilateral
  • Outpatient PPS Devices (C-Codes):
    • C1823 – Generator, neurostimulator (implantable), non-rechargeable, with transvenous sensing and stimulation leads
  • Vision Services (V-Codes):
    • V2599 – Contact lens, other type

You can look up specific codes and updates directly through the CMS HCPCS database or search tools like Codify by AAPC.