Rather than writing out the name of the diagnosis, medical device or surgical procedure on a claim form for payment by insurers, standardized code sets have been established so that providers, suppliers, Medicare and private insurers can convey information in a simple and consistent manner, especially placed on a claim form for billing payers.
The International Classification of Diseases, 10th Revision (ICD-10) codes stand for the patient’s diagnosis and provide justification for the medical device or supply. The Healthcare Common Procedure Coding System (HCPCS) codes (pronounced “Hicks-Picks”) are referred to as alpha-numeric codes because they consist of a single alphabetical letter followed by 4 numbers. Each HCPCS code is followed by a detailed description identifying exactly what it is and its function to distinguish it from other HCPCS codes.
The sequence of events is as follows. The medical device manufacturer sells the product to suppliers who put it their inventory. The physician writes a prescription with the name of the device or HCPCS code on it, and gives it to the patient who then takes it to the supplier. After the supplier gives the device to the patient, the supplier fills out a claim form for payment of the device from the insurer, adding an additional cost for services rendered so that a little profit can be made.
As the initial step to determine the need for a new HCPCS code, the consultant conducts a search of the existing codes to see if any of the HCPCS codes has a description which exactly matches that of the medical device. If one is found, although this is rare, this code can be immediately placed on a claim form for payment. The one drawback is that the price previously assigned to this code must be accepted by the manufacturer. If no such code is found, the consultant will recommend that the manufacturer apply for a new HCPCS code. During the process, Medicare will also ask the manufacturer to provide available data in studies that lend some evidence regarding the clinical effectiveness of the medical device. If your device is FDA approved, it takes about 6 to 9 months to obtain a new HCPCS code. The Application Form and Instructions for filling it out is available. In filling out the application form, when they say “recommendation”, they mean “application”.