Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
Upon analysis by states, what if an edit is found to be in conflict with a state law or regulation, but is currently included within a National Correct Coding Initiative (NCCI) methodology?
CMS allows states to consider edits on an individual, state-by-state basis. If a state determines that an edit in the Medicaid NCCI methodologies conflicts with one or more state laws, regulations, administrative rules, or payment policies, the state can request permission from CMS to deactivate the conflicting edit. States are not afforded the flexibility to deactivate edits after March 31, 2011, due to a lack of operational readiness.
If a state determines and documents that there is no other feasible way to comply with Medicaid NCCI edits, the state can send a request to deactivate that edit or those individual edits using the NCCI mailbox at NCCIPTPMUE@cms.hhs.gov. The request must include sufficient primary source documentation of the conflicting state law, regulation, administrative rule, or payment policy. States are no longer required to send NCCI deactivation requests to CMS Regional Offices.
What are National Correct Coding Initiative (NCCI) methodologies and are these methodologies compatible with the Medicaid program?
The NCCI methodologies are made up of the following four components:
- Sets of edits
- Definitions of types of claims subject to the edits
- Sets of claim-adjudication rules for applying the edits
- Sets of rules for addressing provider/supplier appeals of denied payments for services based on the edits
The NCCI methodologies include both NCCI Procedure-to-Procedure (PTP) edits and Medically Unlikely Edits (MUEs).
CMS issued SMDL #11-003 (PDF, 159.55 KB) on April 22, 2011, to state CMS policy on the requirement for appeals of claims for which payment was denied due to an NCCI edit. The nature of the appeals process in each state is left to the discretion of the state's Medicaid agency.
CMS currently has six methodologies for Medicare Part B. These methodologes are the following:
- NCCI PTP edits for practitioner and ambulatory surgical center (ASC) services
- NCCI PTP edits for outpatient services (including emergency department, observation, and hospital laboratory services) in hospitals reimbursed through the hospital outpatient prospective payment system (OPPS). Edits are applied to all facility therapy services billed to the Medicare Fiscal Intermediary (Part A Hospital / Part B Practitioner Medicare Administrative Contractors processing claims with the Fiscal Intermediary Shared System).
- MUE units-of-service edits for practitioner and ASC services
- MUE units-of-service edits for outpatient services in hospitals
- MUE units-of-service edits for supplier claims for durable medical equipment
- Add-on code edits for practitioner and ASC services (added in April 2013).
After review, CMS determined that the first five NCCI methodologies listed above were compatible methodologies for claims filed in Medicaid. A sixth methodology for Medicaid was added in 2012: NCCI PTP edits for Durable Medical Equipment (DME).
What National Correct Coding Initiative (NCCI) methodologies did CMS find that are not compatible with Medicaid and that are currently being utilized in the Medicare program?
CMS determined that the five NCCI methodologies that were in place in Medicare in 2010 were compatible methodologies for claims filed in Medicaid and that these five methodologies must be incorporated in a state's Medicaid Management Information System (MMIS) for provider claims filed on and after October 1, 2010.
CMS works with the NCCI contractor to identify specific edits within the five methodologies which need to be modified or deleted for Medicaid. Also, edits are developed for the Medicaid NCCI program for services and items that are not covered or not separately payable by Medicare. CMS found that most state MMISs could not accommodate the add-on code edits used in Medicare. Therefore CMS provides those edits to the states for optional use as state-specific edits.
Upon analysis by states, what if one or more edits are found that are necessary to improve correct coding within a state's Medicaid program, but are not currently included within an National Correct Coding Initiative (NCCI) methodology?
States are free to apply their own edits, in addition to the Medicaid NCCI edits, that meet the intent of the statute and would improve correct coding within their Medicaid programs. However, these state-specific edits should not be characterized as NCCI edits. If such state edits result in additional savings to the state's Medicaid program by promoting correct coding and reducing the error rate for claims payments, the state should recommend that CMS add these edits to one or more of the sets of Medicaid NCCI edits.
What guidance did State Medicaid Director Letter (SMDL) #10-017 implement?
SMDL #10-017 (PDF, 133.63 KB) issued on September 1, 2010 provided guidance on the implementation of the Patient Protection and Affordable Care Act (P.L. 111-148), as amended by the Health Care and Education Recovery Act of 2010 (P.L. 111-152), together referred to as the ""Affordable Care Act"", which were signed into law on March 23, 2010. In this SMDL, the Centers for Medicare & Medicaid Services (CMS) provided guidance and established policy in support of implementation of section 6507, "Mandatory State Use of National Correct Coding Initiative (NCCI)", in Subtitle F, "Additional Medicaid Program Integrity Provisions", Title VI, "Transparency and Program Integrity".
What does section 6507 of the Affordable Care Act require of state Medicaid programs, with regards to the National Correct Coding Initiative (NCCI)?
Section 6507 of the Affordable Care Act requires each state Medicaid program to implement compatible methodologies of the NCCI, to promote correct coding, and to control improper coding leading to inappropriate payment. Specifically, section 6507 of the Affordable Care Act amends section 1903(r) of the Social Security Act (the Act). Section 1903(r)(4) of the Act, as amended, required that CMS notify states by September 1, 2010, of the NCCI methodologies that are ""compatible"" with claims filed with Medicaid, in order to promote correct coding and to control improper coding leading to inappropriate payment of claims under Medicaid.
CMS was also required to notify states of the NCCI methodologies that should be incorporated for claims filed with Medicaid for which no national correct coding methodology has been established for Medicare. In addition, CMS was required to inform states on how they must incorporate these methodologies for claims filed under Medicaid.
Section 1903(r)(1)(B)(iv), as amended, also required that states incorporate by October 1, 2010, compatible methodologies of the NCCI administered by the Secretary and other such methodologies as the Secretary identifies. This means that states were required to incorporate these methodologies for Medicaid claims filed on or after October 1, 2010.
CMS was also required to submit a report to Congress by March 1, 2011, that included the September 1, 2010 notice to states and an analysis supporting these methodologies.
What is the National Correct Coding Initiative (NCCI)?
The NCCI is a CMS program that consists of coding policies and edits. Providers report procedures / services performed on beneficiaries utilizing Healthcare Common Procedure Coding System (HCPCS) / Current Procedural Terminology (CPT) codes. These codes are submitted on claim forms to fiscal agents for payment. NCCI policies and edits address procedures / services performed by the same provider for the same beneficiary on the same date of service.
This program was originally implemented in the Medicare program in January 1996 to ensure accurate coding and reporting of services by physicians. The coding policies of NCCI are based on coding conventions defined in the American Medical Association's Current Procedural Terminology Manual, national and local Medicare policies and edits, coding guidelines developed by national societies, standard medical and surgical practice, and / or current coding practice.
With regards to the National Correct Coding Initiative (NCCI), what if a new methodology is discovered that was not identified in SMDL #10-017?
CMS fully anticipates, and will continue to evaluate the application of, additional NCCI methodologies and / or edits that will achieve additional savings that are possible as a result of proper coding. Additional methodologies may be developed later and, if so, CMS will update states regarding the progress of NCCI methodologies in Medicaid moving forward. An example of this are the NCCI Procedure-to-Procedure (PTP) edits for DME which were implemented in the Medicaid NCCI Program in October 2012.
What is a National Correct Coding Initiative (NCCI) edit and how does it differ from an NCCI methodology?
NCCI edits are one component of the NCCI methodologies. The six Medicaid NCCI methodologies contain approximately three million Procedure-to-Procedure (PTP) edits and Medically Unlikely Edits (MUEs) as of March 2017. The NCCI edits are defined as edits applied to claims for services performed by the same provider, for the same beneficiary, on the same date of service. Providers report procedures / services performed on beneficiaries utilizing HCPCS/CPT codes. These codes are submitted on claim forms to fiscal agents for payment.
The NCCI methodologies contain two types of edits:
- NCCI procedure-to-procedure (PTP) edits define pairs of HCPCS / CPT codes that should not be reported together for a variety of reasons. These edits consist of a column one code and a column two code. If both codes are reported, the column one code is eligible for payment and payment for the column two code is denied. However, each PTP edit has an assigned modifier indicator, which provides information on whether a PTP-associated modifier may be used to bypass the edit, in appropriate circumstances, and allow payment for both the column one and column two codes. An indicator of "0" means that a modifier cannot be used to bypass the edit. An indicator of "1" means that a PTP associated modifier, such as 25, 59, RT, LT, etc., may be used, if appropriate, to bypass the edit. An indicator of "9" means the edit has been deleted and the modifier indicator is not relevant.
- Medically Unlikely Edits (MUEs) define for many HCPCS / CPT codes the maximum number of units of service that are under most circumstances billable by the same provider, for the same beneficiary, on the same date of service. Reported units of service greater than the MUE value are unlikely to be correct (e.g., a claim for excision of more than one gallbladder or more than one pancreas). Billed claim lines with a unit-of-service value greater than the established MUE value for the HCPCS / CPT code are denied payment in their entirety.
What does CMS provide to states in order to implement National Correct Coding Initiative (NCCI) in Medicaid?
CMS provides states the Medicaid NCCI edit files for downloading on a quarterly basis approximately 45 days before the beginning of a new calendar quarter. These files are available for downloading by states on the Medicaid Integrity Institute (MII) website on a secure portal (RISSNET). The files are available in three file formats: fixed-width ASCII text, tab-delimited ASCII text, and Excel 2007. The files are complete replacements of the files for the previous calendar quarters.
The following public documents are posted on the Medicaid NCCI pages:
- NCCI Edit Files. The most recent versions are posted in tab-delimited ASCII text and Excel 2007 file formats. These documents are intended for use by other interested parties (e.g., providers), not by state Medicaid agencies.
- Change Reports. These documents identify the changes to the NCCI edits from the previous quarter to the current quarter. These reports are posted in Excel 2007 and tab-delimited ASCII text formats.
- NCCI Edit Design Manual. This manual describes in detail the contents of the NCCI edit files that are posted to the MII and Medicaid.gov websites. It also includes information about file names, edit characteristics, and claim-adjudication rules.
- National Correct Coding Initiative Policy Manual for Medicaid Services. This manual is helpful in understanding the policies on which the Procedure-to-Procedure (PTP) edits and Medically Unlikely Edits (MUEs) are based and will assist staffs in customer service, medical review, and appeals.
- NCCI Correspondence Language Manual (PDF, 395.59 KB). This manual provides information about the Correspondence Language Example Identification Number (CLEID), which is associated with each PTP edit and MUE. The CLEID provides general information about the rationale for the edits, which can be used to help educate providers about the edits.
- Report to Congress on Implementation of the National Correct Coding Initiative in the Medicaid Program (3/11) (PDF, 331.4 KB). An overview of the Medicaid NCCI program.
- Medicaid National Correct Coding Initiative Technical Guidance Manual (PDF, 1.11 MB). This document provides information for state Medicaid agencies and fiscal agents about NCCI policies.
- Annual Report to Congress on the Medicare and Medicaid Integrity Programs (FY 2013 and 2014)