Medicare NCCI edit and correct coding policy

National Correct Coding Initiatives Edits

The CMS developed the National Correct Coding Initiative (NCCI) to promote national correct coding methodologies and to control improper coding leading to inappropriate payment in Part B claims. The CMS developed its coding policies based on coding conventions defined in the American Medical Association's CPT manual, national and local policies and edits, coding guidelines developed by national societies, analysis of standard medical and surgical practices, and a review of current coding practices. The CMS annually updates the National Correct Coding Initiative Coding Policy Manual for Medicare Services (Coding Policy Manual).  The Coding Policy Manual should be utilized by carriers and FIs as a general reference tool that explains the rationale for NCCI edits.

Carriers implemented NCCI edits within their claim processing systems for dates of service on or after January 1, 1996.

A subset of NCCI edits is incorporated into the outpatient code editor (OCE) for OPPS and therapy providers (Skilled nursing facilities (SNFs), comprehensive outpatient rehabilitation facilities (CORFs), outpatient physical therapy and speech-language pathology providers (OPTs), and home health agencies (HHAs) billing under TOBs 22X, 23X, 75X, 74X, 34X).

The purpose of the NCCI edits is to prevent improper payment when incorrect code combinations are reported.  The NCCI contains two tables of edits.  The Column One/Column Two Correct Coding Edits table and the Mutually Exclusive Edits table include code pairs that should not be reported together for a number of reasons explained in the Coding Policy Manual.

This web page provides information to providers on Medicare's NCCI edits but does not address specific NCCI edits. If the viewer has concerns about specific NCCI edits, he/she may submit comments in writing to:

National Correct Coding Initiative

Correct Coding Solutions LLC
P.O. Box 907
Carmel, IN 46082-0907
Attention:  Niles R. Rosen, M.D., Medical Director and Linda S. Dietz, RHIA, CCS, CCS-P, Coding Specialist
Fax #:  317-571-1745

The NCCI Edits Manual may also be obtained by purchasing the manual, or sections of the manual, from the National Technical Information Service (NTIS) website located in the "Related Links Outside CMS" section below, or by contacting NTIS at 1-800-363-2068 begin_of_the_skype_highlighting              1-800-363-2068      end_of_the_skype_highlighting or 703-605-6060 begin_of_the_skype_highlighting              703-605-6060      end_of_the_skype_highlighting.


Correct Coding Policy

The Correct Coding Initiative was developed to promote national correct coding methodologies and to control improper coding leading to inappropriate payment in Part B claims. Refer to Chapter 23 for additional information on the initiative.

The principles for the correct coding policy are:

The service represents the standard of care in accomplishing the overall procedure; The service is necessary to successfully accomplish the comprehensive procedure.
Failure to perform the service may compromise the success of the procedure; and

The service does not represent a separately identifiable procedure unrelated to the comprehensive procedure planned.

For a detailed description of the correct coding policy, refer to

The CMS as well as many third party payers have adopted the HCPCS/CPT coding system for use by physicians and others to describe services rendered. The system contains three levels of codes. Level I contains the American Medical Association’s Current Procedural Terminology (CPT) numeric codes. Level II contains alpha-numeric codes primarily for items and services not included in CPT. Level III contains carrier specific codes that are not included in either Level I or Level II. For a list of CPT and HCPCS codes refer to the CMS Web site.

The following general coding policies encompass coding principles that are to be applied in the review of Medicare claims. They are the basis for the correct coding edits that are installed in the claims processing systems effective January 1, 1996.

A.Coding Based on Standards of Medical/Surgical Practice

All services integral to accomplishing a procedure are considered bundled into that procedure and, therefore, are considered a component part of the comprehensive code. Many of these generic activities are common to virtually all procedures and, on other occasions, some are integral to only a certain group of procedures, but are still essential to accomplish these particular procedures. Accordingly, it is inappropriate to separately report these services based on standard medical and surgical principles.

Because many services are unique to individual CPT coding sections, the rationale for rebundling is described in that particular section of the detailed coding narratives that are transmitted to carriers periodically.

B.CPT Procedure Code Definition

The format of the CPT manual includes descriptions of procedures, which are, in order to conserve space, not listed in their entirety for all procedures. The partial description is indented under the main entry. The main entry then encompasses the portion of the description preceding the semicolon. The main entry applies to and is a part of all indented entries, which follow with their codes.

In the course of other procedure descriptions, the code definition specifies other procedures that are included in this comprehensive code. In addition, a code description may define a rebundling relationship where one code is a part of another based on the language used in the descriptor.

C.CPT Coding Manual Instruction/Guideline

Each of the six major subsections include guidelines that are unique to that section. These directions are not all inclusive of nor limited to, definitions of terms, modifiers, unlisted procedures or services, special or written reports, details about reporting separate, and multiple or starred procedures and qualifying circumstances.

D.Coding Services Supplemental to Principal Procedure (Add-On Codes) Code

Generally, these are identified with the statement “list separately in addition to code for primary procedure” in parentheses, and other times the supplemental code is used only with certain primary codes, which are parenthetically identified. The reason for these CPT codes is to enable physicians and others to separately identify a service that is performed in certain situations as an additional service. Incidental services that are necessary to accomplish the primary procedure (e.g., lysis of adhesions in the course of an open cholecystectomy) are not separately billed.

E.Separate Procedures

The narrative for many CPT codes includes a parenthetical statement that the procedure represents a “separate procedure.”

The inclusion of this statement indicates that the procedure, while possible to perform separately, is generally included in a more comprehensive procedure, and the service is not to be billed when a related, more comprehensive, service is performed. The “separate procedure” designation is used with codes in the surgery (CPT codes 10000-69999), radiology (CPT codes 70000-79999), and medicine (CPT codes 90000-99199) sections. When a related procedure from the same section, subsection, category, or subcategory is performed, a code with the designation of “separate procedure” is not to be billed with the primary procedure.

F.Designation of Sex

Many procedure codes have a sex designation within their narrative. These codes are not billed with codes having an opposite sex designation because this would reflect a conflict in sex classification either by the definition of the code descriptions themselves, or by the fact that the performance of these procedures on the same beneficiary would be anatomically impossible.

G.Family of Codes

In a family of codes, there are two or more component codes that are not billed separately because they are included in a more comprehensive code as members of the code family. Comprehensive codes include certain services that are separately identifiable by other component codes. The component codes as members of the comprehensive code family represent parts of the procedure that should not be listed separately when the complete procedure is done. However, the component codes are considered individually if performed independently of the complete procedure and if not all the services listed in the comprehensive codes were rendered to make up the total service.

H.Most Extensive Procedures

When procedures are performed together that are basically the same or performed on the same site but are qualified by an increased level of complexity, the less extensive procedure is bundled into the more extensive procedure.

I.Sequential Procedures

An initial approach to a procedure may be followed at the same encounter by a second, usually more invasive approach. There may be separate CPT codes describing each service. The second procedure is usually performed because the initial approach was unsuccessful in accomplishing the medically necessary service. These procedures are considered “sequential procedures.” Only the CPT code for one of the services, generally the more invasive service, should be billed.

J.With/Without Procedures

In the CPT manual, there are various procedures that have been separated into two codes with the definitional difference being “with” versus “without” (e.g., with and without contrast). Both procedure codes cannot be billed. When done together, the “without” procedure is bundled into the “with” procedure.

K.Laboratory Panels

When components of a specific organ or disease oriented laboratory panel (e.g., codes 80061 and 80059) or automated multi-channel tests (e.g., codes 80002 - 80019) are billed separately, they must be bundled into the comprehensive panel or automated multi- channel test code as appropriate that includes the multiple component tests. The individual tests that make up a panel or can be performed on an automated multi-channel test analyzer are not to be separately billed.

L Mutually Exclusive Procedures

There are numerous procedure codes that are not billed together because they are mutually exclusive of each other. Mutually exclusive codes are those codes that cannot reasonably be done in the same session.

An example of a mutually exclusive situation is when the repair of the organ can be performed by two different methods. One repair method must be chosen to repair the organ and must be billed. Another example is the billing of an “initial” service and a “subsequent” service. It is contradictory for a service to be classified as an initial and a subsequent service at the same time.

CPT codes which are mutually exclusive of one another based either on the CPT definition or the medical impossibility/improbability that the procedures could be performed at the same session can be identified as code pairs. These codes are not necessarily linked to one another with one code narrative describing a more comprehensive procedure compared to the component code, but can be identified as code pairs which should not be billed together.

M. Use of Modifiers

When certain component codes or mutually exclusive codes are appropriately furnished, such as later on the same day or on a different digit or limb, it is appropriate that these services be reported using a HCPCS code modifier. Such modifiers are modifiers E1 - E4, FA, F1 - F9, TA, T1 - T9, LT, RT, LC, LD, RC, -58, -78, -79, and -94.

Modifier -59 is not appropriate to use with weekly radiation therapy management codes (77427) or with evaluation and management services codes (99201 - 99499).

Application of these modifiers prevent erroneous denials of claims for several procedures performed on different anatomical sites, on different sides of the body, or at different sessions on the same date of service. The medical record must reflect that the modifier is being used appropriately to describe separate services.

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