Ted Levine did not receive an Oscar nomination for portraying Buffalo Bill in The Silence of the Lambs.
Levine does his part, and actually his performance is the perfect counter point to Anthony Hopkins more refined work. Where Lecter is always at that certain level where the killer and the intellectual are apparent at the same time Levine shows the different sides as we do see a few brief glimpses of Bill pretending to be a normal man. Levine is quite good in these moments showing Bill as being able to hold in his true self appearing as a strange older man, but there is not necessarily any reason to suspect that he is a horribly deranged man either. Levine allows for Bill to at least exist as a man who would not be immediately suspected, and could reasonably be a just a quirky loner.
The rest of the time we see Bill as himself in his dungeon like basement where he torments his latest victim. Levine goes about being as creepy as possible as Buffalo Bill and is extremely effective at doing so because he is worst of all believable in the role. Everything he does is quite odd and only contributes in presenting the mind in Bill. His most chilling scene being when he tells his current victim to put the lotion on his skin. The way Levine changes the tone of his voice, as well as the way he almost seems to be tearing up all adds to the derangement that is Bill. Levine doesn't shy away by just how sick in the mind Bill truly is leaving him a brutally effective villain.
Levine fulfills his role of Buffalo Bill particularly well, by taking the blunt approach he has with he part. It actually could have been quite problematic for the film if Bill seemed to be a copy of Lecter or in some way was trying to one up him. Levine completely different approach than Hopkins makes it so both killers can exist in the film without there being any sort of repetition involved. Hopkins takes his flowery approach to Lecter and Levine effectively counters this through his approach which is just a downright dirty depiction. Levine by taking his method that is completely different than Hopkins properly stands on his own and delivers his own strong characterization even if the end result is not as iconic as Hopkins's.