The Healthcare Common Procedure Coding System (HCPCS) Level II is a standardized set of alphanumeric codes used by providers to bill for products, supplies, and services not covered by the primary procedural coding system. Temporary HCPCS codes are established by the Centers for Medicare & Medicaid Services (CMS) to quickly implement payment and coverage decisions for new medical items. These codes act as a placeholder for new drugs, biologicals, devices, and procedures requiring immediate tracking and reimbursement. This allows the healthcare system to rapidly integrate emerging technologies and services while long-term utilization data is collected before a permanent national code is established.
Types of Temporary Codes
The frequency of updates for a temporary code is tied to its code type and the payment system it supports. Codes are grouped by a specific initial letter, which signifies their primary function and the jurisdiction responsible for management. Understanding these categories provides context for their varied update schedules.
C Codes
C Codes are used exclusively by hospitals operating under the Hospital Outpatient Prospective Payment System (OPPS) and are often called “pass-through” codes. They capture new drugs, biologicals, and devices requiring immediate reimbursement until sufficient data is gathered for a permanent payment decision. Their function is inherently tied to the quarterly payment updates of the OPPS.
G Codes
G Codes are used to identify professional healthcare procedures and services lacking an existing code in the standard procedural system. They track services new or unique to CMS programs, such as certain care coordination services, and are managed internally by CMS.
Q Codes and K Codes
Q Codes serve as identifiers for drugs, biologicals, and medical equipment necessary for claims processing but not yet assigned a permanent national code. K Codes are designated for use by Durable Medical Equipment Medicare Administrative Contractors (DME MACs) to identify specific durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when a national code is unavailable.
Scheduled Review and Update Frequency
The official update cycles for temporary HCPCS codes are governed by regulatory procedures, such as those outlined in Title 42 of the Code of Federal Regulations (CFR) Part 414. Update frequency is not uniform, following a segmented schedule based on the type of service or product.
Quarterly Updates
The most frequently updated codes are C Codes, which are mandated to be updated quarterly. Updates are effective annually, coinciding with the OPPS calendar.
- January 1
- April 1
- July 1
- October 1
This rapid, quarterly cycle is necessary to ensure hospitals quickly receive payment for new technology and supplies that meet the “pass-through” criteria.
For codes covering drugs and biological products, such as many Q Codes, the CMS review process also operates quarterly. Applications for new drugs and biologicals are reviewed and, if approved, the resulting codes are introduced with the same quarterly effective dates.
Biannual Updates
The review cycle for non-drug and non-biological items and services, including many K Codes and other Q Codes, generally follows a biannual schedule. CMS reviews applications twice per year, with new codes typically becoming effective on April 1 and October 1. While scheduled updates are standard, CMS retains the authority to make unscheduled, immediate updates (Ad Hoc updates) in rare circumstances involving public health emergencies or critical coverage decisions.
The Lifecycle of Temporary Codes
Temporary HCPCS codes are not permanent fixtures; they are subject to a defined regulatory lifecycle leading to removal or transition. The purpose of the temporary assignment is to permit the collection of utilization data and ensure appropriate payment while the item or service is evaluated for long-term placement.
Most temporary codes are subject to a time limit, often having a maximum duration of two to three years (like C Codes). During this period, the CMS HCPCS Workgroup reviews the item or service to determine if it warrants a permanent code. If the item demonstrates adequate utilization and meets criteria, the temporary code is deleted and replaced with a permanent HCPCS Level II code or transitioned into a Category I procedural code.
If a code does not meet the criteria for permanent status, or if the item or service is no longer considered new, the code will expire and be removed. The transition or removal process ensures the coding set remains current and efficient, preventing the accumulation of obsolete or unused codes. This structured lifecycle maintains the integrity of the coding system by moving promising items to permanent status and retiring those that fail to meet long-term needs.