Which coding system is managed by CMS and used for classifying medical equipment and drugs in an outpatient setting?

The coding system that is specifically managed by the Centers for Medicare & Medicaid Services (CMS) for classifying medical equipment and drugs in an outpatient setting is HCPCS Level II. This system includes codes for various healthcare services that are not covered by the Current Procedural Terminology (CPT) codes, such as non-physician services, durable medical equipment (DME), prosthetics, and certain medications administered in an outpatient setting.

HCPCS Level II codes are essential for billing and reimbursement processes, particularly for services and items that require specific identification beyond what CPT codes provide. For example, if a patient requires a wheelchair or other medical supplies, the relevant HCPCS Level II codes would be used to report these items to insurance payers or Medicare.

In contrast, the other coding systems mentioned serve different purposes. CPT codes are mainly concerned with outpatient procedures and services provided by healthcare professionals, ICD-10-CM codes are utilized for classifying diagnoses, and ICD-10-PCS is used for inpatient hospital procedures. Thus, HCPCS Level II stands out as the correct choice in this context.