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Elizabeth M. Whitehorn, Director

Provider Notice issued 10/14/10

National Correct Coding Initiative

To:​ Participating Physicians, Advanced Practice Nurses, Optometrists, Dentists, Podiatrists, School-based Linked Health Centers, Local Health Departments, Hospitals, Durable Medical Equipment and Supplies, Pharmacies, Federally Qualified Health Centers and Rural Health Clinics​
Date:​ October 14, 2010​
Re:​ National Correct Coding Initiative​

As a requirement of the Patient Protection and Affordable Care Act of 2010, State Medicaid agencies are required to apply editing methodologies of the National Correct Coding Initiative (NCCI). The Centers for Medicare and Medicaid Services (CMS) developed the NCCI to promote national correct coding methodologies and to control improper coding that leads to inappropriate payment of Part B claims. CMS has determined that these NCCI methodologies (identified below) are compatible for all claims filed through Medicaid. The department must incorporate all methodologies into our claims editing system for claims filed on or after October 1, 2010. Upon review of the NCCI edits, we have determined that many are already in place in the HFS claims editing system. 

The NCCI edits are defined as edits applied to services performed by the same provider for the same beneficiary on the same date of service and consist of two types of edits:

  1. Procedure-to-procedure edits that define pairs of HCPCS/CPT codes that should not be reported together for a variety of reasons; and

  2. Medically Unlikely Edits (MUEs), or units-of-service edits that define for each HCPCS/CPT code the number of units of service beyond which the reported number of units of service is unlikely to be correct.

CMS has established five methodologies and they are:

  1. NCCI procedure-to-procedure edits for practitioner and ambulatory surgical center (ASC) services.

  2. NCCI procedure-to-procedure edits for outpatient hospital services (including emergency department, observation, and hospital laboratory services) incorporated into the Medicare outpatient code editor (OCE) for hospitals reimbursed through the hospital outpatient prospective payment system (OPPS). These same edits in OCE are applied to all facility therapy services billed to the Medicare Fiscal Intermediary (Part A Hospital/Part B Practitioner Medicare Administrative Contractors (A/B MACs) processing claims with the Fiscal Intermediary Shared System (FISS). They do not apply to hospitals not reimbursed through the OPPS (e.g., Critical Access Hospitals (CAHs)).

  3. MUE units-of-service edits for practitioner and ASC services.

  4. MUE units-of-service edits for outpatient hospital services for hospitals reimbursed through the OPPS and for CAHs.

MUE units-of-service edits for supplier claims for durable medical equipment.

The department is awaiting further guidance from CMS concerning the specific provider types and claim types that will be subject to NCCI editing. Further information on this initiative will be provided as soon as it becomes available.

Questions regarding this notice may be directed to the Bureau of Comprehensive Health Services at 1-877-782-5565.

Theresa A. Eagleson, Administrator

Division of Medical Programs