Three-tier coding system developed by the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA), used for reporting physician/supplier services and procedures. Providers must use HCPCS to receive payment by Medicare and Medicaid programs. Level I consists of national codes to code ambulatory, laboratory, radiology, and other diagnostic services for Medicare billing. This level contains only the American Medical Association’s CPT codes. Level II consists of HCPCS national codes used to report ambulance services, durable medical equipment, and orthotic and prosthetic devices. Level III HCPCS regional/local codes have been discontinued. Pronounced “hick-picks” and formerly referred to as Health Care Financing Administration Common Procedure Coding System (HCPCS) . Also known as national codes .