New Edits for Medicaid Claims Could Trigger Denials, Retroactive Provider Repayments

Key Medicaid coding changes included in the Patient Protection and Affordable Care Act (PPACA) could increase denials for Medicaid providers and may even trigger reimbursements to Medicaid for settled claims going back more than a year.


A provision of the PPACA required that state Medicaid programs incorporate the long-standing Medicare National Correct Coding Initiative /Medically Unlikely Edits (NCCI/MUE) into their claims processing by October 1, 2010. The CMS originally developed the NCCI in 1996 to promote national correct coding methodologies and to control improper coding leading to inappropriate payments in Medicare Part B claims. The purpose of the NCCI “bundling” edits is to prevent improper payments when incorrect code combinations are reported while the MUE edits limit the number of units that a particular code may be billed on the same date of service.


Section 6507 of the Affordable Care Act required that CMS notify states of the NCCI methodologies that are “compatible” with claims filed with Medicaid CMS providing the state Medicaid programs the opportunity to request specific NCCI edits be deactivated if the state had established as part of their own State laws, regulations, administrative rules and/or payment policies regulations, programs which would conflict with the Medicare NCCI edits. CMS also gave the states leeway to apply additional edits within their respective programs if provided to CMS by the March 31, 2011 deadline.


CMS has stated that once state Medicaid programs have the NCCI/MUE tables up and running, they are required to look at all Medicaid claims going back to October 1, 2010, apply the edits, and re-adjudicate the claims if necessary. Rick Oliver, McKesson RMS compliance, said the result could be that providers will be compelled to reimburse payments or portions of payments that were not in accordance with the NCCI/MUE edits unless an appeal opportunity is allowed to justify those services. However, Oliver noted that the state programs may instead opt to recover any monies due through offsets against a provider’s future Medicaid claims.


Going forward, Oliver stressed that Medicaid providers and their billing partners must be sure to comply with the NCCI/MUE edit requirements or face payment denials. Of particular importance, he said, is ensuring that the rules associated with applying modifier -59 to NCCI-related edits be appropriately followed.


According to CMS, an NCCI edit pair can be overridden using modifier -59 only when the:

  1. Service was done from/on a different anatomic site or
  2. Service was done on a different encounter (i.e. different time, date)

While the CPT code book provides additional examples of appropriate use of modifier -59, these reasons cannot be applied when modifier -59 is used for NCCI/MUE related overrides. The following provides the Medicare guidelines associated with modifier -59: Medicare Modifier 59 Article Medicaid NCCI Coding.


CMS has established a separate section on their website devoted to state Medicaid NCCI/MUE edits. The section includes a Medicaid Coding Manual similar to the Medicare NCCI/MUE Coding Manual. All coding supervisors, coders and claim denial personnel should familiarize themselves with the manual. Two links below provide addition information: The first leads to a CMS website page devoted to Medicaid NCCI coding; the second links to the Medicare NCCI coding page.


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