BY Michael R. Alexander, Esq. and Jordan Vogel, Esq., Brown & Fortunato, P.C.
Inaccurate coding and reporting of services can have devastating impacts on a medical business. You cannot bill insurance or insurance beneficiaries for services that are incorrectly coded, and advanced notices will not allow you to shift liability to a beneficiary under Medicare in that circumstance, either. To ensure payment for your services, you need to avoid common improper claims and understand the rules and principles that apply to claims submission and processing.
One potentially relevant set of coding principles and rules that providers need to be aware of was established through the National Correct Coding Initiative (“NCCI”). The NCCI is a national policy established by the Centers for Medicare & 
Medicaid Services (“CMS”) and it impacts Part B claims and separately, with some slight modifications, Medicaid claims involving certain specific services—including practitioner services, ambulatory surgical center services, outpatient hospital services, DME, prosthetics, orthotics, and supplies. But the application of the NCCI rules extends beyond federal health care programs as several commercial insurers have adopted the NCCI rules.
NCCI Edits
The Medicare NCCI program includes the following three types of claim edits—rules for claim adjudication—that act to automatically reject claims for services that fit certain characteristics:
(1) Procedure-to-Procedure (“PTP”) edits;
(2) Medically Unlikely Edits (“MUEs”); and
(3) Add-on Code (“AOC”) edits.
The Medicaid NCCI edits include PTP and MUEs edits, like Medicare, but it does not include AOC edits. Whether a state Medicaid program adopts AOC edits is decided by the state and is not considered an NCCI edit to the extent a state adopts the edit in their Medicaid program.
PTP Edits
PTP edits prevent inappropriate payment for services that should not be reported together. CMS publishes a table of code edit pairs that cannot be reported together on the same day for the same beneficiary. If a provider/supplier reports two codes that are found in a PTP edit pair for the same beneficiary for the same date of service, only one of the two codes will be payable, and the other code will be denied absent a modifier indicating that the services were clinically appropriate.
MUEs Edits
MUE edits prevent payment for an inappropriate number/quantity of the same service on a single day. An MUE for a HCPCS/CPT code is the maximum number of units of service that is reported for a HCPCS/CPT code on the vast majority of appropriately reported claims by the same provider/supplier for the same beneficiary on the same date of service.
AOC Edits
AOC edits consist of a listing of HCPCS and CPT Add-on Codes with their respective primary codes. An AOC is a HCPCS/CPT code that describes a service that, with rare exception, is performed in conjunction with another primary service by the same practitioner. An AOC is rarely eligible for payment if it is the only procedure reported by a practitioner.
NCCI Policies
A complete set of NCCI rules and policies can be found in the Medicare and Medicaid NCCI Policy Manuals. Familiarity with these policies is critical for providers because claims are evaluated under the policies, even if an NCCI edit does not specifically apply. Stated differently, providers need to understand the general coding principles outlined in the NCCI because claims can be denied for incorrect coding for violating the NCCI principles, regardless of whether an edit exists for the specific circumstance. The following policies are not comprehensive and do not address all of the NCCI or other CMS coding policies. Rather, they are illustrative of the billing practices that are considered unacceptable by CMS:
- Procedures shall be reported with the most comprehensive CPT code that describes the services performed.
- Providers/suppliers must not unbundle the services described by a HCPCS/CPT code.
- Providers/suppliers must avoid down-coding.
- Providers/suppliers must avoid up-coding.
- Providers/suppliers must report units of service correctly.
- Physicians shall not inconvenience beneficiaries nor increase risks to beneficiaries by performing services on different dates of service to avoid MUE or PTP edits.
- If two HCPCS/CPT code descriptions describe redundant services, they shall not be reported separately.
- Two codes from a family may not be reported separately.
- If a HCPCS/CPT code is reported, it includes all components of the procedure defined by the descriptor.
- If a physician provides a service that is not accurately described by other HCPCS/CPT codes, the service shall be reported using an unlisted procedure code.
- A physician shall not report a CPT code for a specific procedure if it does not accurately describe the service performed.
- It is inappropriate to report the best fit HCPCS/CPT code unless it accurately describes the service performed, and all components of the HCPCS/CPT code were performed.
CMS provides examples illustrating the above principles in the applicable Medicare or Medicaid NCCI Policy Manual, which may be helpful to understand the scope of the rule. However, providers are responsible for understanding the principles and ensuring their billing is accurate regardless of whether a specific example of a general principle relates to the claim at issue.
Prudent impacted providers will understand the NCCI, or other applicable billing rules, and ensure their billing practices comply. Those providers that do not are more likely to receive claim denials or requests for recoupment based on coding errors that could have been avoided.