Medicare is the largest health insurance program in the United States for individuals ages 65 and older. It also covers certain individuals under age 65 who are disabled or who have End-Stage Renal Disease (ESRD). In order to serve such a large population quickly and efficiently while giving doctors and patients the right amount of information, the Healthcare Common Procedure Coding System (HCPCS) was adopted. This system uses a standard set of codes, also known as Medicare codes, which providers use to identify the medical services they provide to a patient.
HCPCS is comprised of two categories, Level I and Level II. Level I is based on the American Medical Association's (AMA) Current Procedural Technology (CPT) codes. Level I codes provide a way for healthcare providers to communicate with each other about services and procedures patients receive. Level II was developed to code items that were not previously identified in Level I, such as durable medical equipment and other medical devices. Medicare codes are used mainly for Medicare patients and are maintained jointly by Medicare and the AMA.
Level I codes are comprised of five numerical numbers. An example of a CPT/Level I code would be 31290 for nasal/sinus endoscopy. HCPCS Level II codes are alpha-numeric. An example of a Level II code would be D5110 for dentures.
Medicare codes are often used in conjunction with International Classification of Diseases (ICD) codes on a variety of patient forms including, but not limited to, records and billing. ICD codes are used to identify any medical diseases or health conditions. Every health condition has its own unique set of codes. Examples of ICD codes are the series 010.0-010.9; A15.7 and A16.7. These particular codes are used to classify primary tuberculous complex.
The Medicare codes and the ICD codes are important when it comes to benefits and coverage of Medicare patients. The ICD code essentially describes the health condition. Based on the specific health condition, certain procedures and services may or may not be covered by Medicare or the other billing authorities. Anything coded incorrectly runs the risk of not being covered by Medicare causing the health care provider to not be reimbursed and/or the patient paying unnecessary out of pocket costs.
For healthcare providers, HCPCS codes also ensure continuity among Medicare patients. Medicare patients receiving the same covered service can be assured that they will receive the same reimbursement from Medicare.