Medical billing is a crucial part of the healthcare system. It’s what ensures that healthcare providers are paid for the services they deliver. Among the many different types of codes used to process claims, it plays a specific and essential role. These codes may not be as commonly known as CPT or ICD-10 codes, but they are critical in certain billing scenarios—especially within outpatient hospital settings.
In this article, we’ll explore what a C Code in medical billing is, how it works, when it’s used, and why it matters for providers, billing professionals, and healthcare organizations.
What is a C Code in Medical Billing?
C codes are a set of temporary codes established by the CMS. They are part of the HCPCS Level II. Unlike CPT codes, which are maintained by the AMA, These codes are created and managed solely by CMS.
The main purpose is to report specific items or services for outpatient hospital care, particularly when those services are related to pass-through payments or device-dependent procedures.
These codes are often used in Ambulatory Payment Classifications (APCs) for Medicare claims and are essential for billing high-cost items such as medical devices, biologicals, and certain drugs.
When and Where Are C Codes Used?
They are used almost exclusively in hospital outpatient settings. They are not intended for use in physician offices or inpatient claims. These codes come into play in the following cases:
- Outpatient Prospective Payment System (OPPS) billing for Medicare
- Pass-through items that require tracking and separate reimbursement
- New technology procedures under special payment conditions
- Specific device-related services that influence payment calculations
It can trigger separate reimbursement or help CMS evaluate the cost and usage of certain services. For example, if a hospital uses a new and expensive implant device, a corresponding C code may be used so that Medicare reimburses the hospital appropriately.
Examples of Commonly Used C Codes
Here are a few examples and what they represent:
- C1713 – Anchor/screw for opposing bone-to-bone or soft tissue-to-bone
- C2613 – Brachytherapy source, iodine-125, per source
- C1874 – Catheter, transluminal angioplasty, drug-coated, non-laser
Each code corresponds to a very specific item or device. Hospitals must use the correct code to ensure accurate billing and reimbursement.
Difference Between C Codes and Other HCPCS Codes
There are several categories of HCPCS Level II codes (A codes, J codes, Q codes, etc.), so what makes this code different?
- Temporary Use: Unlike CPT codes or permanent HCPCS codes, It is temporary and often updated or deleted based on CMS decisions.
- CMS-Specific: It is used primarily for Medicare billing under OPPS and not by commercial payers.
- Limited Scope: It is very specific in scope and applies only to certain high-cost devices, drugs, or biologicals used in the outpatient hospital setting.
- Purpose-Driven: These codes often help CMS collect data on new procedures or technology for future pricing and coverage decisions.
Why Are C Codes Important in Hospital Billing?
Although it is used in a limited setting, it carries significant weight for hospital revenue cycle management. Here’s why:
1. Accurate Reimbursement
Hospitals depend on these codes to report high-cost items that might not be covered under general procedural codes. Without using the correct C code, the hospital may not receive adequate reimbursement.
2. Cost Tracking and Reporting
Using this code allows CMS to collect cost data that supports policy changes, rate updates, and evaluation of new technology.
3. New Technology Assessment
Hospitals can use specific C codes in medical billing to test new procedures or items. CMS then evaluates this data for potential permanent code creation or pricing adjustments.
4. Compliance and Audit Readiness
It ensures compliance with Medicare requirements. Improper use—or failure to use them when required—can result in audits or denied claims.
How to Find and Use C Codes Correctly?
Medical billing and coding professionals working in outpatient hospital settings should regularly review CMS’s quarterly updates to stay informed about new, revised, or deleted C codes.
Key tips:
- Use C codes only when billing Medicare under OPPS
- Verify whether the code applies to the specific device or drug used
- Cross-reference with the CMS HCPCS quarterly update files
- Understand if the item or procedure qualifies for separate payment
Staying updated ensures clean claims and proper reimbursement.
How Often Do C Codes Change?
Since they are considered temporary, They are reviewed and updated frequently. CMS may:
- Add new codes to reflect emerging technology
- Delete codes that are no longer used
- Convert certain codes into permanent HCPCS or CPT codes
Changes usually occur in the quarterly HCPCS updates and the annual OPPS final rule released by CMS.
C Codes and the Future of Value-Based Care
As healthcare shifts toward value-based care and payment innovation, These codes may become even more valuable. They offer CMS the ability to track new treatments and devices, collect cost and outcome data, and refine reimbursement models. While their use is still very specific, the data generated from them can help shape future policies and technologies.
Key Takeaways
To summarize, here are the essential points to remember:
- They are temporary HCPCS Level II codes, used primarily in Medicare outpatient hospital billing
- These codes help report high-cost items and devices for separate reimbursement
- They are not used in physician offices or inpatient claims
- They are essential for cost tracking, compliance, and reimbursement
- These codes are frequently updated, so staying informed is vital
- Accurate use is crucial for preventing billing errors and denials