SCDHHS Announces Use of National Correct Coding Initiative (NCCI) on a Prepayment Basis


NCCI Background and FAQs

Initially National Correct Coding Initiative (NCCI) was developed by CMS for Medicare Part B claims and is now being implemented for state Medicaid programs.

NCCI was developed by CMS for the purpose of preventing overpayments to providers due to incorrect code combinations or units of service (UOS) on the same date of service by the same provider in excess of what is normally considered to be medically necessary.

NCCI consist of two types of edits:

  1.  NCCI Procedure-to-Procedure (PTP) edits: These edits define pairs of HCPCS/CPT codes that should not be reported together for a variety of reasons. These edits consist of a column one code and a column two code.  If both codes are reported, the column one code is eligible for payment and the column two code is denied. In some instances, an appropriate modifier may be added to identify that services are eligible for payment.
  2. Medically Unlikely Edits (MUE):  These edits define for each HCPCS/CPT code the number of units of service that is unlikely to be correct. The units of service that exceed what is considered medically necessary will be denied.

It is important to understand, however, that the NCCI does not include all possible combinations of correct coding edits or types of unbundling that exist. Providers are obligated to code correctly even if edits do not exist to prevent use of an inappropriate code combination. Should Providers determine that claims have been coded incorrectly, they are responsible for contacting SCDHHS. 

Providers should refer to the Centers for Medicare & Medicaid Services (CMS) website at correct coding guidelines and specific applicable code combinations.


Q:  What is the National Correct Coding Initiative (NCCI)?

A: The National Correct Coding Initiative (NCCI) (also known as CCI) was implemented to promote national correct coding methodologies and to control improper coding leading to inappropriate payment. NCCI code pair edits are automated prepayment edits that prevent improper payment when certain codes are submitted together.

In addition to Code Pair edits, the NCCI includes a set of edits known as Medically Unlikely Edits (MUEs). An MUE is a maximum number of Units of Service (UOS) allowable under most circumstances for a singleHealthcare Common Procedure Coding System/Current Procedural Terminology (HCPCS/CPT) code billed by a Provider.

Q:  Why would a Health Care Professional, Supplier, or Provider Use the NCCI Web Page, Tables, and Manual?

A: Accurate coding and reporting of services are critical aspects of proper billing. Services denied based on NCCI code Pair edits or MUEs may not be billed to patients. The NCCI tools found on the Centers for Medicare & Medicaid Services (CMS) website (including the “Medicaid NCCI Coding Policy Manual”) help Providers avoid coding and billing errors and subsequent payment denials.

Q:  How Up-to-Date are the NCCI Tables?

A:  The tables are updated quarterly and loaded into the Medicaid claims payment processing systems and onto the CMS Medicaid NCCI web pages.  

Q:  How do Physicians and Hospitals (Facilities) locate the NCCI Tables/Manuals?

A: The Code Pair edits, MUE tables, and NCCI manual are accessed at on the CMS website.

Q:  How do Physicians and Hospitals (Facilities) use the NCCI Tables?

A: NCCI is comprised of two Provider-type choices of Code Pair edits and three Provider-type choices of MUEs:

Code Pair Edits

Medicaid NCCI PTP Edits for Practitioner Services:These code pair edits are applied to claims submitted by Physicians, Non-Physician Practitioners, Ambulatory Surgery Centers (ASCs),Independent Laboratory and X-Ray Facilities. 

Medicaid NCCI PTP Edits for Outpatient Hospital:This set of Code Pair edits is applied to Outpatient Hospital claims with a Reimbursement Type of 4/Treatment, Therapy, TestingMUEs.

Medicaid MUE Edits for Practitioner Services:For Practitioner claims regardless of site of service including DME billed by Practitioner, Practitioner MUE  edits are applied.  For Ambulatory Surgical Center, Independent Laboratory and X-Ray Facility claims,  Practitioner MUE edits are applied.

Medicaid MUE Edits for Durable Medical Equipment (DME) Provider Services:For DME billed by Suppliers, not Practitioners or Hospitals,  Durable Medical Equipment (DME)) MUE  edits are applied.

Medicaid MUE Edits for Outpatient Hospital Services: For Outpatient Hospital  claims with a Reimbursement Type of 4/Treatment, Therapy, Testingincluding DME billed by Hospital,  Outpatient Hospital MUE  edits are applied. 

Q:  How do you know when an appropriate modifier may be used?

A: Modifiers may be appended to HCPCS/CPT codes only if the clinical circumstances justify the use of the modifier. A modifier should not be appended to a HCPCS/CPT code solely to bypass an NCCI edit if the clinical circumstances do not justify its use.

In the modifier indicator column, the indicator 0, 1, or 9 shows whether an NCCI-associated modifier allows the code pair to bypass the edit. The following Modifier Identifier Table provides a definition of each of these indicators.

Modifier Indicator Table

Modifier Indicator


0 (Not Allowed)


There are no modifiers associated with NCCI that are allowed to be used with this code pair; there are no circumstances in which both procedures of the code pair should be paid for the same patient on the same day by the same provider.

1 (Allowed)


The modifiers associated with NCCI are allowed with this code pair when appropriate.

9 (Not Applicable)


This indicator means that an NCCI edit does not apply to this code pair. The edit for this code pair was deleted retroactively.


NCCI Associated Modifiers: 25, 27, 58, 59, 78, 79 91, LT, RT, E1, E2, E3, E4, FA, F1, F2, F3, F4, F5, F6, F7, F8, F9, LC, LD, RC, TA, T1, T2, T3, T4, T5, T6, T7, T8, and T9 are modifiers that Providers may append to the column one or column two codes of a code pair edit. If an NCCI edit has a modifier indicator of “1”, both the column one and column two codes are eligible for payment if one of these modifiers is appended to either code of the code pair edit.


Q:  How will this new change affect Providers?

A:  Upon implementation of NCCI edits Providers will start seeing Denial Reason Code/Adjustment Reason Codes for NCCI on their Remittance Advice.

Q:  How can I as a Provider of service prepare and educate myself and my staff regarding Medicaid NCCI?

A: Providers should refer to the Centers for Medicare & Medicaid Services (CMS) correct coding guidelines and specific applicable code combinations. Provider may also want to refer to Medicare’s “How to Use THE NATIONAL CORRECT CODING INITIATIVE (NCCI) TOOLS at: This tool explains NCCI and how to use the NCCI tables to find correct coding policies.






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