1. 6 Procedural Coding: Introduction to HCPCS

2. Learning Outcomes When you finish this chapter, you will be able to: 6.1 Discuss the purpose of the HCPCS code set. 6.2 Define durable medical equipment. 6.3 Compare permanent national codes and temporary national codes. 6.4 Explain how to locate the periodic updates to HCPCS. 6.5 List the steps for assigning correct HCPCS codes and modifiers. 6.6 Discuss the tools used to verify Medicare billing rules for specific HCPCS codes. 6.7 State the purpose of the Certificate of Medical Necessity. 6-2

3. Key Terms Certificate of Medical Necessity (CMN) CMS HCPCS Workgroup Coverage Issues Manual (CIM) durable medical equipment (DME) durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) 6-3 Durable Medical Equipment Medicare Administrative Contractor (DME MAC) Healthcare Common Procedure Coding System (HCPCS) Level II Level II modifiers Medicare Carriers Manual (MCM )

4. Key Terms (Continued) never event permanent national codes Pricing, Coding Analysis, and Coding (PDAC) contractor temporary national codes 6-4

5. 6.1 Overview of HCPCS 6-5 The Healthcare Common Procedure Coding System (HCPCS) was set up to give health care providers a coding system that describes specific products, supplies, and services that patients receive HCPCS is technically made up of two sections of procedural codes: 1.Level I, the CPT (from Chapter 5) 2.HCPCS Level II Codes—national codes that identify supplies, products, and services not in Level I

6. 6.2 Level II Codes 6-6 Level II codes are five characters, beginning with a letter and followed by four numbers Durable medical equipment (DME)—reusable physical supplies ordered by the provider for home use – Can withstand repeated use – Primarily and customarily used for a medical purpose – Generally not useful to a person in the absence of an illness or injury – Appropriate for use in the home

7. 6.2 Level II Codes (Continued) 6-7 CMS has four Durable Medical Equipment Medicare Administrative Contractors (DME MAC)—contractors that process Medicare claims for DMEPOS Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS)—category of HCPCS services

8. 6.3 Permanent versus Temporary Codes 6-8 CMS HCPCS Workgroup: government committee that maintains the Level II HCPCS code set – Maintains the permanent national codes—HCPCS Level II codes – Temporary national codes—HCPCS Level II codes available for use but not part of the standard code set; may become permanent codes Pricing, Coding Analysis, and Coding (PDAC) contractors—contractors responsible for helping to determine which HCPCS code describes DMEPOS items

9. 6.4 HCPCS Updates 6-9 Annual updates to HCPCS codes are released on the CMS HCPCS website, effective for use January 1 of each year – Interim updates for temporary codes are also found on the CMS HCPCS website Annual HCPCS code books are published as a code reference

10. 6.5 HCPCS Coding Procedures 6-10 Correct HCPCS coding follows the same general guidelines as ICD-9-CM and CPT coding: – Begin by locating the item to be coded in the index (or the Table of Drugs) – Then verify the probable code in the main sections – Assign appropriate modifiers Level II modifiers—HCPCS national code set modifiers – Provide additional information about services, supplies, and procedures

11. 6.6 HCPCS Billing Procedures 6-11 Medicare billing rules for specific HCPCS codes are shown by references in the main sections next to the codes Medicare Carriers Manual (MCM)—guidelines established by Medicare about coverage for HCPCS Level II services Coverage Issues Manual (CIM)—information about Medicare-qualified clinical trials, treatments, therapeutic interventions, diagnostic testing, durable medical equipment, therapies, and services

12. 6.7 The Certificate of Medical Necessity 6-12 Certificate of Medical Necessity (CMN)– document used to assist DME MACs in gathering information – Useful for providing medical necessity information in a concise manner formatted for efficient claims processing The following DMEPOS items require a CMN: – Oxygen – Pneumatic Compression Devices – Osteogenesis Stimulators – Transcutaneous Electrical Nerve Stimulators (TENS) – Seat Lift Mechanisms