Correct Coding for Medicare

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An accurate claim is dependent upon multiple components. Staying up-to-date on annual coding changes, following standard coding guidelines and keeping detailed patient records are simple ways to make sure medical claims are accurate.

The coding of Medicare claims has a unique set of requirements that providers can refer to prevent coding related denials or improper payments. This set of coding requirements is called NCCI or CCI policy for Medicare services.

National Correct Coding Initiative (NCCI) was developed by the Centers of Medicare and Medicaid Services (CMS) to prevent inappropriate Medicare payments due to coding errors. 

There are three types of NCCI edits:

  1. Procedure-to-procedure edits
  2. Medically unlikely edits
  3. Add-on code edits

According to CMS, NCCI coding policies are decided and based on a combination of different coding policies including:

  • The Current Procedural Terminology (CPT) Manual by the American Medical Association's (AMA)
  • Local and national Medicare policies
  • National societies guidelines
  • Standard medical practices
  • Current coding practices

The CMS website provides a number of resources for providers to accurately and consistently code medical claims. 

NCCI: Procedure-to-Procedure Edits

NCCI procedure-to-procedure edits apply to both CPT and HCPCS procedure codes. 

CPT codes are Common Procedural Codes and were developed and trademarked by the American Medical Association in 1966. These are a system of five character alphanumeric codes that describe in a standardized method medical, surgical, and diagnostic services.

HCPCS or the Healthcare Common Procedure Coding System levels I and II. Level I is comprised of CPT codes, and Level II includes alphanumeric codes which are used to identify products, supplies, and services not included in the CPT codes when used outside a physician's office.

NCCI procedure-to-procedure edits prevent the reporting and payment of services that should not be billed on the claim together.  NCCI edits can be found on four tables provided on the CMS website.

These tables are a reference for hospitals and physicians to identify sets of codes that cannot be submitted on the same claim or are mutually exclusive of one another.  If the claim has both codes, there are two possibilities that can occur:

  1. Based on whether the code is listed in column 1 or column 2 of the table, the column 2 code will deny.  Example: A provider should not report a unilateral diagnostic mammogram with a bilateral diagnostic mammogram.  The unilateral diagnostic mammogram will not be eligible for payment.
  2. If the table indicates that there is a clinically appropriate modifier and the modifier is used, both columns will be eligible. Example: Use Modifier 59 with the secondary, additional or lesser procedure as listed in column 1 or column 2 as appropriate.

NCCI: Medically Unlikely Edits

NCCI medically unlikely edits (MUEs) also apply to CPT and HCPCS codes. 

While procedure-to-procedure edits prevent the payment of procedures that should not be reported together on a medical claim, MUEs prevent the payment for the inappropriate number of units for a single procedure.

Certain procedures have a maximum number of units that should be reported for the same Medicare patient (beneficiary) on the same date of service by the same provider. For example, a venipuncture code should only be reported once per claim or it will deny.

However, while physicians and hospitals are encouraged to report only the maximum allowed number of units for CPT and HCPCS codes, they also must follow compliance guidelines.

  1. Avoid unbundling procedures. Some services are considered all inclusive. Unbundling is billing for procedures separately that are normally billed as a single charge. For example, a provider bills for two unilateral screening mammograms, instead of billing for 1 bilateral screening mammogram.
  2. Avoid upcoding procedures. Misrepresenting a level of service or procedure performed in order to charge more or receive a higher reimbursement rate is considered upcoding. Upcoding also occurs when a service performed is not covered by Medicare but the provider bills a covered service in its place.

NCCI: Add-On Code Edits

NCCI add-on code edits prevent the payment of add-on codes that are considered as part of the primary CPT and HCPCS codes. 

Add-on codes that are included in the primary procedure are not separately reportable and therefore are not eligible for payment. However, there are some add-on codes that are supplemental to the primary procedure that are eligible for payment.

The CPT manual identifies and has specific instructions for most add-on codes. For procedures that have a specific primary code, the add-on code should not be reported as a supplemental code.

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