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December 5, 2014

National Correct Coding Initiative (NCCI) and Medically Unlikely Edits (MUEs)

At a national level, Medicare identifies individual services that are components of more inclusive services using National Correct Coding Initiative (NCCI) edits. NCCI edits are designed to promote correct coding and prevent improper payments by "bundling" component codes into the more inclusive code. Component services that are billed separately from the more inclusive service are denied, unless an exception applies. This is one of the top reasons for denial of Medicare Part B services.

Here are some steps you can take to prevent NCCI denials:

  • First, know if NCCI edits apply to the services you are submitting. Code pairs are listed on the CMS website and may be updated as often as quarterly.
    • Codes are designated as Column I or Column II codes. Most of the time, the "parent" code is in Column I and component code in Column II. For some code pairs, the Column I and II codes are considered "mutually exclusive" and should not be reported together (for example, a vaginal hysterectomy and total abdominal hysterectomy).
    • If both codes from a Column I and II code pair are submitted, the Column I code may be reimbursed and the Column II code will not be reimbursed.
  • Second, if an NCCI edit applies to your services, determine whether you have an exception to the NCCI edits as noted by the Modifier Indicator assigned to the code combination. (No exceptions are allowed if the modifier indicator is 0.) There must be documentation in the patient's medical record to support all exceptions.
    • Note: denials based on NCCI edits are coding denials, not medical necessity denials; therefore, it is not appropriate to issue an Advance Beneficiary Notice of Noncoverage (ABN) to shift liability to the beneficiary.
      Modifier Indicator Explanation Example
      0 Codes are always bundled; do not submit a modifier for exceptions CPT codes 43235 (EGD) and 31505 (laryngoscopy)
      1 Exceptions may apply; submit the appropriate modifier. (Note: documentation is required in the patient's medical record.) CPT codes 94620 (pulmonary stress test) and 94010 (spirometry)
      9 Not applicable. The code pair is no longer bundled and no modifier is needed for purposes of noting an NCCI exception. CPT codes 97001 (PT evaluation) and 99354 (prolonged eval., office)

Exceptions may include services that were performed:

  • At different (separate) encounters
  • On different anatomic sites
  • As distinct services (use caution when identifying "exceptions" for this reason, as errors are frequently noted with this usage)
    Do you have an exception to the NCCI edit? Steps
    No (services are correctly bundled)
    • Do not submit the component service. It is incorrect to submit separate codes ("unbundle") when a service is correctly represented by a single, comprehensive code.
    Yes (services should not be bundled)
    • Identify the correct modifier to submit with the component code to signify that an exception applies. The CGS Modifier Tool provides some guidance.
    • Know that CPT modifier 59 may be used to note an exception to National Correct Coding Initiative (NCCI) edits, if no other "exception" modifier applies. For this reason, CPT modifier 59 is often the "modifier of last resort" to note an exception to NCCI edits or other bundling edits.
      • Important: maintain supporting documentation in the patient's medical record.

Guidance: Appropriate and Inappropriate Use of CPT modifier 59

  • If another, more specific modifier exists that is more appropriate and describes an exception to an NCCI edit, use the more specific modifier, not CPT modifier 59. Guidance on documentation and correct modifier submission is available in the CGS Modifier Lookup Tool.
  • CPT modifier 59 may be appropriate when two procedures that would otherwise be bundled are performed on different anatomic sites or during different patient encounters. Documentation in the patient's medical record must support use of this modifier.
  • Different diagnoses are not necessarily required. The keys are anatomic sites and patient encounters.
  • Refer to CMS MLN Matters article SE1418External PDF, "Proper Use of Modifier -59," for specific examples of appropriate and inappropriate use of CPT modifier 59.
  • If your claim was denied as a duplicate, but the two (identical) services are "separate and distinct" and no other modifier applies, CPT modifier 59 maybe appropriate.

Future update: for dates of service on or after January 1, 2015

CMS has established four new Healthcare Common Procedure Coding System (HCPCS) modifiers to define subsets of CPT modifier 59. For dates of service on or after 1/1/2015, you may submit the X HCPCS modifiers (XE, XS, XP, and XU) if you are currently using CPT modifier 59 for a reason within the published definition of the X HCPCS modifiers. You also have the option to continue using CPT modifier 59 until CMS issues examples of circumstances in which the X HCPCS modifiers are or are not appropriate. For more information, see CMS MLN Matters Article 8863External PDF, "Specific Modifiers for Distinct Procedural Services."

Medically Unlikely Edits

"Medically Unlikely Edits" (MUEs) are a separate set of NCCI edits designed to identify the maximum number of units that would normally be performed by a provider on a single date of service. These are not "frequency parameters" – these edits are designed to prevent billing errors that result from entering an incorrect quantity for services.

  • Most MUEs are available on the CMS websiteExternal website and may be updated as often as quarterly. MUE changes are not retroactive unless the change is to update the file with a retroactive date.
  • MUE denials are coding denials, not medical necessity denials; therefore, it is not appropriate to issue an Advance Beneficiary Notice of Noncoverage (ABN) to shift liability to the beneficiary.
  • Before you submit claims for injected drugs, pay special attention to the quantity; look at the specific HCPCS code and the number of units associated with that code. For example, HCPCS code J1020 is for "injection, methylprednisolone acetate, 20 mg." If you administered 20 mg to the patient, the quantity billed on your claim should be 1, not 20.
  • If the number of services you submitted is correct and reflects medically necessary care provided to the patient, and your claim is denied based on an MUE, you may appeal the denial. Keep in mind that first-level appeals (Redeterminations) must be submitted within 120 days of the date of the initial determination (i.e., date on your Remittance Advice). Include supporting documentation with your request. Redeterminations may be submitted electronically through our secure web portal, myCGS, or on paperPDF (tip: complete the form electronically, then print, sign, attach supporting documentation, and mail).
  • The MUE Adjustment Indicator (MAI) provides the rationale for the edit:
    MAI Explanation

    Claim line edit


    Absolute date of service edit; "per day edits based on policy"

    • CGS will not pay in excess of an MUE value with MAI indicator 2

    Date of service edit: "per day based on clinical benchmarks"

If You Disagree with an NCCI or MUE Edit:

  • To request a reconsideration of an NCCI edit, follow the instructions on the CMS NCCI web pageExternal PDF.
  • To request a reconsideration of an MUE value, send your request, the rationale, and any supporting documentation, to:

    National Correct Coding Initiative
    Correct Coding Solutions, LLC
    PO Box 907
    Carmel, IN 46082-0907
    Fax: 317-571-1745


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