How Missing HCPCS Codes Are Costing Providers—and What to Do About It

The evolving landscape of healthcare reimbursement has delivered another challenge for providers: a wave of claim denials related to missing Healthcare Common Procedure Coding System (HCPCS) codes for medical supplies. What was once considered a routine part of the revenue cycle has now become a source of costly administrative friction and potential revenue loss.

In a recent episode of 1st Talk Compliance, Kevin Chmura, CEO of Panacea Healthcare Solutions, sat down with BreAnn Meadows, President of Panacea’s Revenue Integrity Services Division, to discuss this rising trend and how hospitals and health systems can respond effectively.

Why Are Claims Being Denied?

Historically, providers were advised to charge for all supplies provided, using standard 270 or 272 revenue codes—even if those items did not have a corresponding HCPCS code. However, starting in mid-2024 and continuing into 2025, many payers have updated their policies. Now, supplies billed without a valid HCPCS code—despite being previously deemed chargeable—are leading to line-item denials and, in some cases, full claim denials.

“It’s frustrating,” says Chmura. “A single missing code on a low-cost supply item can trigger a denial for the entire claim.”

These changes have left many providers scrambling for clarity. Are chargeable guidelines shifting? Should providers remove items from their chargemaster? How much net revenue are they unknowingly leaving on the table?

The Supply CDM Challenge

One major obstacle is the complexity of the supply Charge Description Master (CDM) itself. Over time, hospitals often accumulate tens of thousands—or even over 100,000—line items. While it may be tempting to deactivate older, less-used supplies, most organizations hesitate due to the unpredictability of clinical use.

Now, as payers begin enforcing stricter HCPCS requirements, providers must revisit these massive inventories to assign codes accurately—a daunting and time-consuming task.

“It’s incredibly difficult to go back through line-by-line and clean up the supply CDM,” says Meadows. “Even with tools in place, you still need to prioritize where your efforts will have the most impact.”

Inconsistencies Among Payers

What makes this situation even more complex is the lack of consistency across payers. While some have already implemented stricter HCPCS requirements, others are still phasing in changes—or applying them inconsistently. That means a one-size-fits-all approach won’t work.

“Providers are bound by one CDM, but they’re dealing with a fragmented payer environment,” Chmura notes. “It puts them in a difficult position.”

Strategies for Compliance and Revenue Protection

So what can providers do? Meadows recommends a phased, strategic approach:

  • Assign HCPCS Codes Where Possible

    Begin by identifying items in the CDM that are missing HCPCS codes and assign them where appropriate. This may require the use of a matching tool or reference database to streamline the process.

  • Leverage Technology for Bulk Matching

    Tools like Panacea’s ChargeAssist can help automate code assignments using the GTIN, or Global Trade Item Number, manufacturer numbers, or internal inventory files—although manual review is still necessary for accuracy.

  • Prioritize High-Impact Items

    Rather than reviewing every item in the CDM, focus on items with high usage or high revenue impact. A targeted cleanup will yield quicker returns and reduce unnecessary resource strain.

  • Adjust Revenue Strategies for Unbillable Items

    For supplies that cannot be billed with a HCPCS code, providers must consider whether to absorb the revenue loss or shift it into related cost centers (e.g., room and board, operating room time). This adds another layer of financial planning complexity.

  • Update Policies to Prevent Future Issues

    Don’t just clean up the CDM—review your charge capture policies to ensure new supplies are evaluated and coded appropriately before they create new compliance risks.

  • Communicate With Payers

    Because of inconsistent implementation, Meadows recommends reaching out directly to payer reps to request clarification and documentation on denials. “Push for the policy language,” she advises. “It’s the only way to hold payers accountable and protect your revenue.”

The Value of Partnering with Experts

Given the complexity and scope of the issue, many organizations are turning to outside experts for help. Panacea’s Revenue Integrity Services team, for example, not only provides tools like ChargeAssist but also offers consulting to help optimize CDMs, review policy alignment, and minimize future risk.

“Hiring a third party can be more cost-effective than handling everything in-house—especially when you factor in potential lost revenue from denials,” says Chmura.

Final Thoughts

Inconsistent payer policies, legacy CDMs, and lack of staffing all contribute to a growing problem that could significantly affect provider revenue. But with the right tools, a focused strategy, and clear communication with payers, hospitals and health systems can proactively manage HCPCS compliance and protect their bottom line.

If your organization is starting to experience supply-related denials, now is the time to act.

Take the Next Step Toward Supply CDM Compliance

Don’t wait for denials to escalate. Whether you need help identifying missing HCPCS codes, streamlining your Chargemaster, or creating a payer-specific compliance strategy, Panacea’s ChargeAssist™ and Revenue Integrity Services can help.

Schedule a consultation or learn more about ChargeAssist™ to take control of your CDM and reduce costly denials.