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The page below is a sample from the LabCE course Medicare Compliance for Clinical Laboratories. Access the complete course and earn ASCLS P.A.C.E.-approved continuing education credits by subscribing online.

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HCPCS and CPT-4 Coding

The Healthcare Common procedure Coding System (HCPCS) is divided into two principal subsystems, referred to as level I and level II of the HCPCS.
Level I of the HCPCS is comprised of Current Procedural Terminology (CPT-4) , a numeric coding system maintained by the American Medical Association (AMA). The CPT-4 is a uniform coding system consisting of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other health care professionals. These health care professionals use the CPT-4 to identify services and procedures for which they bill public or private health insurance programs. Level I of the HCPCS, the CPT-4 codes, does not include codes needed to separately report medical items or services that are regularly billed by suppliers other than physicians.
Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT-4 codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician's office. Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT-4 codes, the level II HCPCS codes were established for submitting claims for these items.
  • The amount of payment for a test, procedure, service, ot product/supply is dependent on the HCPCS or CPT-4 code.
  • In the laboratory setting, HCPCS or CPT-4 codes should be assigned under the supervision of the laboratory technical staff.
  • Billing department employees should never change a HCPCS or CPT-4 code without the approval of a manager or compliance officer.
  • If billing department clerks notice that a particular HCPCS or CPT-4 code is being rejected by a payer they should report it to their manager.
  • It is against the law to use the wrong HCPCS or CPT-4 code for the purpose of causing or increasing payment for a test, procedure, service, or product/supply.