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Frequently Asked Questions

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.

FAQ Library

Showing 1 to 10 of 18 results

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.

FAQ ID:95166

Both the State Medicaid Director Letter describing the Substance Use Disorder (SUD) section 1115 demonstration opportunity and the Centers for Medicare & Medicaid Services (CMS) SUD Implementation Plan template, reference needs assessment tools and program standards established by the American Society for Addiction Medicine (ASAM). Is a state required to reference or rely on the ASAM Criteria in implementing an SUD section 1115 demonstration?

No, a state is not required to reference or rely on the ASAM Criteria however, states should use guidelines/patient placement tools that are comparable to ASAM criteria. The State Medicaid Director Letter describing the SUD section 1115 demonstration opportunity references the ASAM Criteria as a recognized standard and an example of a patient placement assessment tool that states could use. Participating states are expected to ensure that providers use an SUD-specific, multi-dimensional assessment tool in determining the types of treatments and level of care a beneficiary with an SUD may need. The ASAM Criteria is referenced as a representative example of such an assessment tool. 

Some states proposed alternative needs assessment tools. CMS reviews each alternative proposal on an individual basis, and CMS has so far determined that those alternatives are comparable to the ASAM Criteria and meet the expectations for this demonstration initiative. In addition, participating states are expected to implement provider qualifications for residential treatment providers that reflect well-established standards for these treatment settings. Again, the ASAM Criteria is referenced as an example of a resource that states may use for determining those standards.

FAQ ID:93681

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:

  1. Sets of edits
  2. Definitions of types of claims subject to the edits
  3. Sets of claim-adjudication rules for applying the edits
  4. 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:

  1. NCCI PTP edits for practitioner and ambulatory surgical center (ASC) services
  2. 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).
  3. MUE units-of-service edits for practitioner and ASC services
  4. MUE units-of-service edits for outpatient services in hospitals
  5. MUE units-of-service edits for supplier claims for durable medical equipment
  6. 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).

FAQ ID:95121

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.

FAQ ID:95131

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.

FAQ ID:95136

Are states only required to conduct Upper Payment Limit (UPL) demonstrations for services with approved state plan supplemental payment methodologies?

No, an upper payment limit demonstration considers all Medicaid payments (base and supplemental). States must conduct UPL demonstrations for the applicable services described in State Medicaid Director Letter (SMDL) 13-003 regardless of whether a state makes supplemental payments under the Medicaid state plan for the services.

FAQ ID:92191

How and when should the Medicaid hospital tax/provider assessment be included in the inpatient hospital template?

The cost of the tax should be reported in Variable 401 - MCD Provider Tax Cost. A state may separately report the Medicaid portion of the cost of a provider assessment/tax only when it is using a cost based methodology to calculate the UPL. A state may not include this cost when calculating a DRG or Payment based UPL demonstration.

FAQ ID:92366

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".

FAQ ID:94991

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.

FAQ ID:94996

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.

FAQ ID:95001

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