The Centers for Medicare and Medicaid Services (CMS) has issued a document addressing applications for new or revised Level II Healthcare Common Procedure Coding System (HCPCS) codes effective January 1, 2012 (www.cms.gov/MedHCPCSGenInfo/Downloads/2012HCPCSApplication.pdf). Level II HCPCS codes are used for billing a variety of items and services, including drugs, biologicals, and durable medical equipment. Although the CMS document is similar in most respects to previous code application documents, there are a few significant changes that should be noted to avoid having the application deferred until the 2013 cycle.

Level II HCPCS codes are alphanumeric codes established by CMS. The first symbol of the code, which is a letter, can signify the type of product (e.g., drugs and biologicals typically have codes that start with "J" – a J code). CMS has an annual process for creating and revising Level II HCPCS codes that begins with the submission of an application in January, release of preliminary decisions in April and May, public meetings in May and June, and the release of a new code set in October or November that takes effect the next January 1.

According to the recently released CMS document, applications for new or revised codes effective January 1, 2012, must be received by CMS no later than close of business January 3, 2011. Consistent with prior years, the deadline is the first business day of the new calendar year such that submissions by overnight delivery must be sent at the end of 2010. Applications received later than January 3, 2011 will be considered for a code effective January 1, 2013. The required contents for an application are largely the same as in past years, including a requirement that for all items for which a code is sought, a copy of the cover page from the initial Food and Drug Administration (FDA) application must be submitted.

A significant change in the application process pertains to drugs and biologicals that will not have FDA approval when the application is submitted and it can mean the difference between a new code effective January 1, 2012 and one effective January 1, 2013. For most products, FDA approval must be obtained prior to the submission of the HCPCS code application. However, CMS historically has allowed an additional three months for drugs and biologicals to obtain FDA approval and CMS continues that policy such that an application can be considered timely if the drug or biological receives FDA approval by March 31, 2011. The change for 2012 is that this additional grace period of FDA approval for drugs and biologicals applies only if the product was submitted for FDA approval by September 30, 2010. Thus, if a drug or biological is not FDA, approved when the HCPCS application is submitted (no later than January 3, 2011), it will be considered for a new code effective January 1, 2012, only if both (i) FDA approval comes by March 31, 2011 and (ii) the request for FDA approval was submitted to the FDA before September 30, 2010. As a result, companies with new drugs or biologicals must consider not only the deadline for submission of the HCPCS application, but also may need to be cognizant of the FDA approval submission deadline if the product will not be approved by the FDA before January 3, 2011.