The CMS National Correct Coding Initiative (NCCI) promotes national correct coding methodologies and minimizes improper coding leading to inappropriate payments of Medicare Part B and Medicaid claims.

NCCI Edits

The National Correct Coding Initiative (NCCI) consists of two types of edits:

1. NCCI procedure-to-procedure (PTP) edits that define pairs of Healthcare Common Procedure Coding System (HCPCS)/Current Procedural Terminology (CPT) codes that should not be reported together for a variety of reasons. The purpose of the PTP edits is to prevent improper payments when incorrect code combinations are reported.
2. Medically Unlikely Edits (MUE) are units-of-service (UOS) edits that define for each HCPCS/CPT code the number of UOS beyond which the reported number of UOS is unlikely to be correct (e.g., claims for excision of more than one gallbladder or more than one pancreas).

NCCI Methodologies

The NCCI consists of five methodologies. These are:

1. A methodology with PTP edits for practitioner and ambulatory surgical center (ASC) services.
2. A methodology with PTP edits for outpatient hospital services(including emergency department, observation, and hospital laboratory services).
3. A methodology with MUE UOS edits for practitioner and ASC services.
4. A methodology with MUE UOS edits for outpatient hospital servicesfor hospitals reimbursed using HCPCS/CPT codes.
5. A methodology with MUE UOS edits for provider claims for durable medical equipment.

NCCI Components

Each of the five NCCI methodologies has four components. These are:

1. a set of edits;
2. definitions of types of claims subject to the edits;
3. a set of claims adjudication rules for applying the edits; and
4. a set of rules for addressing provider/supplier appeals of denied payments for services based on the edits.

Impact of the Affordable Care Act of 2010 on NCCI
The Affordable Care Act of 2010 required CMS to notify States by September 1, 2010, of the NCCI methodologies that are compatible with Medicaid. State Medicaid Director Letter #10-017 notified States that all five NCCI methodologies are compatible with Medicaid. The Affordable Care Act required State Medicaid programs to incorporate compatible NCCI methodologies in their systems for processing Medicaid claims by October 1, 2010.

Medicaid NCCI Edit Files
CMS posts the updated Medicaid NCCI edit files on the Medicaid.gov website at the beginning of each calendar quarter. The files are accessed by clicking on the link in the Related Resources section of this webpage. In addition, CMS has posted on this webpage NCCI reference information, including State Medicaid Director Letters on the NCCI, manuals, and other reference guides for understanding the Medicaid NCCI edit files.