HCPCS Level 2

Last updated: 05-21-2025

Column	Data Type	Description

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What is HCPCS Level II?

HCPCS Level II (Healthcare Common Procedure Coding System, Level II) is a standardized code set used in the United States to describe products, supplies, and services not included in the CPT (Current Procedural Terminology) codes. These include durable medical equipment (DME), ambulance services, prosthetics, orthotics, and certain drugs and non-physician services.

Claim Usage:

• HCPCS Level II codes typically appear on the claim line level, rather than the header.
• They are commonly used in Medicare, Medicaid, and commercial insurance claims—particularly professional and outpatient institutional claims (e.g., UB-04 forms).
• They are tied to both billed charges and allowed amounts, with pricing determined by a mix of national and regional fee schedules and carrier-specific reimbursement policies.

Granularity and Pricing:

• Each HCPCS code corresponds to a specific item or service (e.g., "E0110 – Crutch, underarm, wood, adjustable or fixed, pair").
• Pricing is informed by multiple structures:
  • CMS DMEPOS fee schedule (for durable equipment and prosthetics)
  • Medicare ASP Drug Pricing (for Part B drugs)
  • Carrier/local MAC policies for miscellaneous services

Who Maintains HCPCS Level II?

The Centers for Medicare & Medicaid Services (CMS) maintains HCPCS Level II codes.

• CMS updates the HCPCS Level II code set quarterly and annually, with public comment periods.
• The HCPCS Workgroup, which includes representatives from CMS, private insurers, and other stakeholders, reviews code requests and proposes changes.

Code Structure

HCPCS Level II codes:

• Begin with a single letter (A–V) followed by four digits (e.g., A0429, J3490).
• Groupings often reflect service categories:
  • Axxxx – Transportation services (e.g., ambulance)
  • Bxxxx – Enteral/parenteral therapy
  • Exxxx – DME equipment
  • Jxxxx – Drugs administered other than oral method
  • Kxxxx, Qxxxx, Sxxxx, Txxxx – Temporary or local codes

Modifiers are often appended (e.g., J3301–LT) to specify laterality, professional/technical components, or billing scenarios.

Notes for Analysts

• HCPCS Level II codes are essential for understanding non-physician services, DME claims, and injectable drug billing.
• Often used in line-item analysis of claims; look for them in conjunction with:
  • Revenue center codes on UB-04s
  • National Drug Codes (NDCs) for precise identification of drugs
  • Modifiers, which may affect reimbursement and should be parsed carefully
• Analysts should account for local coverage determinations (LCDs) and fee schedules when comparing allowed vs. billed charges.

Why Isn’t There a HCPCS Level I?

There is a Level I in HCPCS: it's the CPT (Current Procedural Terminology) code set, which covers physician and outpatient services.

However, the term “HCPCS” is often used synonymously with Level II, since Level I (CPT) is maintained and copyrighted by the American Medical Association (AMA).

Why Doesn’t Tuva Include CPT Codes in Its Terminology Set?

The CPT code set is owned by the American Medical Association (AMA). Although CPT codes are mandated for use in nearly all U.S. medical billing systems, the AMA imposes strict licensing restrictions on redistribution or even descriptive usage of CPT codes.

Tuva Seed File Update Process

Note: This is the maintenance process used by Tuva to maintain the current codeset in the Tuva package. Tuva users do not need to complete this step unless they are leveraging a different version of codes or are no longer updating to the current version of the project, but need an updated terminology set.

1. Navigate to the CMS HCPCS Quarterly Update page

2. Download the latest ZIP file available.

3. Extract the file named HCPC<year>_<month>_ANWEB.xlsx from the ZIP.
   This is the only file needed.

4. Load the extracted Excel file into your data warehouse.

5. Transform the uploaded data into a new table that matches the Tuva Terminology standard:

   Source Column	Tuva Column
   hcpc	hcpcs
   seqnum	seqnum
   recid	recid
   long description	long_description
   short description	short_description

   • Ensure that null values are properly represented as null, not blank strings ('').

6. Unload the table to S3 as a .csv file (requires credentials with write permissions to the bucket):

-- example code for Snowflake
copy into s3://tuva-public-resources/terminology/hcpcs_level_2.csv
from 
(  select hcpcs, seqnum, recid, substr(long_description, 1, 2000), short_description
   from [table_created_in_step_5]
)
file_format = (type = csv field_optionally_enclosed_by = '"')
storage_integration = [integration_with_s3_write_permissions]
overwrite = true;

7. Create a branch in docs. Update the last_updated column in the table above with the current date
8. Submit a pull request

The below steps are only required if the headers of the file need to be changed. The Tuva Project does not store the contents of the terminology file in GitHub.

1. Create a branch in The Tuva Project
2. Copy and paste the updated header into the HCPCS Level II file
3. Submit a pull request