Lesson · 20 min

Introduction to Healthcare Procedure Coding (HCPCS)

Learn the HCPCS Level II coding system used for supplies, equipment, medications, and services not covered by CPT.

By the end of this lesson you can

Explain what HCPCS Level II covers and how it differs from CPT
Identify the main HCPCS Level II code categories by letter
Determine when both a CPT and a HCPCS code are needed
Describe how HCPCS Level II is maintained

📘 Reading Lesson

Lesson Notes

Read through the key concepts before you try the challenge.

The code set for everything CPT does not cover

On the job

You are coding a visit where a medication was administered.

The provider gave an injection. CPT has a code for administering it. CPT has no code for the drug itself. Bill only the CPT code and the practice is paid for the work and not for the medication it purchased.

Your task: Learn what the second code set covers, and when you need both.

HCPCS is the Healthcare Common Procedure Coding System, and it has two levels. Level I is CPT. Level II is a separate alphanumeric set maintained by CMS, covering the things CPT does not: supplies, durable medical equipment, prosthetics, drugs administered other than orally, and ambulance transport.

A HCPCS Level II code is one letter followed by four digits. The letter indicates the category, which makes the set unusually navigable once you know a handful of them.

Letter	Covers	Example type
A	Transportation, medical and surgical supplies	Ambulance service, dressings
B	Enteral and parenteral therapy	Feeding supplies
E	Durable medical equipment	Wheelchairs, walkers, hospital beds
G	Temporary procedures and services	Codes CMS assigns pending a CPT code
J	Drugs administered other than by mouth	Injectable and infused medications
K	Temporary DME codes	Assigned by the DME contractors
L	Orthotics and prosthetics	Braces, artificial limbs
Q	Temporary codes	Various, assigned by CMS

HCPCS Level II categories seen most often

A single encounter often needs codes from both levels. An injection produces a CPT code for the administration and a J code for the drug. Reporting only one is among the most common ways a practice loses revenue through incomplete rather than incorrect coding.

What Is HCPCS?

HCPCS (Healthcare Common Procedure Coding System) is a standardized coding system maintained by CMS. It has two levels:

Level I: CPT codes (American Medical Association) — physician services and procedures
Level II: Alphanumeric codes (A0000–V9999) — ambulance, durable medical equipment, drugs, and supplies not covered in CPT

Common HCPCS Level II Categories

A codes: Transportation, medical/surgical supplies
E codes: Durable medical equipment (wheelchairs, crutches, oxygen)
J codes: Drugs administered other than by oral method
L codes: Orthotic and prosthetic procedures

Medicare and Medicaid require HCPCS Level II codes for many services that CPT does not cover. Knowing when to use HCPCS vs. CPT is a key billing skill.

Challenge

Apply what you've learned in this lesson.

Check your understanding

Which HCPCS Level II code category covers durable medical equipment like wheelchairs?

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