For practice managers, healthcare providers, and owners, understanding HCPCS code differences is essential. The Healthcare Common Procedure Coding System (HCPCS) has two distinct levels that govern different types of medical services and supplies. Mastering this dual structure is key to accurate billing and compliance, especially with Medicare and Medicaid.
HCPCS Level I: Physician and Outpatient Services
HCPCS Level I consists entirely of Current Procedural Terminology (CPT) codes. These five-digit numeric codes primarily cover physician services and outpatient procedures. They are used for consultations, evaluations, surgeries, and diagnostic tests. For example, a code like 99213 identifies an established patient office visit. The American Medical Association (AMA) manages and updates these codes annually. Therefore, practices must verify code changes yearly and use appropriate CPT modifiers (like -25) when necessary to accurately represent the services provided.
HCPCS Level II: DME, Supplies, and Non-Physician Services
HCPCS Level II codes expand the system’s scope. They cover products, supplies, and services not listed in CPT. The format uses one letter followed by four digits (e.g., J-codes, A-codes, E-codes). This level is critical for billing Durable Medical Equipment (DME), drugs (J-codes like J1885 for injections), and non-MD services such as ambulance transport (A-codes). Consequently, Level II plays a vital role in Medicare and Medicaid billing compliance. The Centers for Medicare & Medicaid Services (CMS) manages these codes and issues quarterly updates. Practices must check these updates regularly and maintain separate systems for billing DME versus professional services.
Critical Differences and Compliance
The core HCPCS code differences come down to their format, governance, and use case:
| Feature | Level I (CPT) | Level II |
| Format | 5 numbers (99213) | 1 letter + 4 digits (J1885) |
| Governance | AMA | CMS |
| Use Case | Physician services | DME/supplies/drugs |
Conclusion
Mastering the HCPCS code differences is a non-negotiable step toward revenue integrity. In summary, CPT codes define professional services, while HCPCS Level II codes define supplies and non-physician items. Using the correct level ensures claim accuracy, reduces denials, and secures compliant, timely reimbursement.