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Understanding NCCI Edits

By Aimee Wilcox, CPMA, CCS-P, CMHP, CST, MA, MT
February 28, 2019

Medicare creates and maintains the National Correct Coding Initiative (NCCI) edits and policy manual, which identify code pairs considered integral to one another or bundled. An NCCI code pairs consists of two codes representing procedures that when performed during the same operative session, on the same patient, and by the same provider should not be billed separately because they are considered part of the greater procedure.  A different way of explaining this would be to consider how upset you might be if you went to a restaurant and paid for a nice meal but were then asked to pay a separate fee for use of the silverware, water glass, and napkins. Those items are integral to your meal, to your ability to eat it and you shouldn’t be charged separately for them.

NCCI code pair edits are published quarterly and become effective, immediately. A companion policy manual, updated and published annually (October 1st), explains the reasoning behind the code pair edits and whether or not circumstances may exist to allow the code pair to be unbundled. Code pairs are displayed in a two-column table with the primary procedure code located in Column 1 and the secondary (bundled) procedure code located in Column 2. If a provider submits both codes of a code pair edit to the payer, the Column 1 code will be paid, while the code in Column 2 will be denied.  

Unbundling” refers to separately reporting, and expecting payment for, both the Column 1 and Column 2 codes. Occasionally circumstances exist which warrant unbundling and payment of both codes; however, there are rules that govern which code pairs may be unbundled and under what circumstances it would be warranted. CMS identifies code pairs that may be unbundled by linking an indicator 0, 1, or 9 to the Column 2 code.

NCCI Column 2 Indicators Provide Guidance

  • 0- Not eligible for unbundling under any circumstance
  • 1- Allowed when circumstances are appropriate and there is documentation to support it
  • 9- NCCI edit does not apply (it was deleted retroactively)

If the Column 2 code has an indicator of “1,” it may be unbundled and paid for separately but only under certain circumstances and if those circumstances are identifiable within the documented record. Identifying the circumstances that justify unbundling is what the policy manual is for. Organized by chapter and code range makes it easy to locate each code and the guidelines pertaining to them. 

Common NCCI Edit Mistakes

Two of the most common problems seen in unbundling are:

  1. Applying the unbundling modifier to the code in Column 1 instead of Column 2 

Although a number of modifiers may be used to unbundle services, (e.g., RT, LT), when modifier 59 or the Medicare X {EPSU} modifiers are reported, they should always be added to the Column 2 code, as it is the code that would otherwise be denied.

  1. Lack of supporting documentation

The medical record should clearly identify the circumstances that qualify it for unbundling.

CMS states,

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 an HCPCS/CPT code solely to bypass an NCCI edit if the clinical circumstances do not justify its use. If the Medicare Program imposes restrictions on the use of a modifier, the modifier may only be used to bypass an NCCI edit if the Medicare restrictions are fulfilled” -see MLN How to Use the National Correct Coding Initiative (NCCI) Tools

Here are two examples of how NCCI edits, and the policy manual, are helpful in preventing audit failures:

Example 1:

A bariatric surgeon performed a laparoscopic (nonendoscopic) sleeve gastrectomy and immediately following the procedure the assistant surgeon performed an EGD to make sure the surgery was done correctly and that there were no leaks along the suture lines. Two separate operative reports were included in the medical record which described the gastrectomy (43775) and the EGD (43235) and both were paid by the payer. Several years later, an audit revealed the EGD was inappropriately unbundled and a refund demand was made by the payer.  An NCCI edit search of the code pair 43775 and 43235 revealed no NCCI edit, so why did the payer think the provider was inappropriately paid for the EGD (43235)?  

In the NCCI Policy Manual for Medicare Services, 2016, C. Endoscopy Services, 6., paragraph 2 reads,

“If an endoscopic procedure is performed at the same patient encounter as a non-endoscopic procedure to ensure no intraoperative injury occurred or verify the procedure was performed correctly, the endoscopic procedure is not separately reportable with the non-endoscopic procedure.“

Although no official NCCI edit exists between these two codes, there are still guidelines that exist that prohibit unbundling them. Being unfamiliar with these guidelines could result in a failed audit and serious financial ramifications. When the auditor reviewed the documentation, it was apparent that the reason for the EGD was to check for possible leaks from the surgery. Unbundling was deemed inappropriate and the provider had to refund the payment to the payer.

Example 2: During a gastric restrictive procedure, the surgeon repairs a paraesophageal hernia by pulling the stomach through the opening in the diaphragm back into its normal anatomic position. A simple figure-of-eight suture was then used to repair the tear in the diaphragm to keep the stomach in position. An NCCI edit exists between the gastric restrictive procedure (43775) and the hernia repair (432811). The surgeon reported 43775, 43281-59 to override the code pair edit, believing the hernia repair deserved separate payment. Two years later an audit was performed and a demand for repayment was made stating unbundling by the provider was unjustified. The payer referenced the following,

NCCI Policy Manual, Chapter VI Surgery: Digestive System CPT Codes 40000-49999, F. Laparoscopy, #9, is reads:

“9. CPT codes 43281 and 43282 describe laparoscopic paraesophageal hernia repair with fundoplasty, if performed, without or with mesh implantation respectively. These codes should not be reported for a figure-of-eight suture often performed during gastric restrictive procedures.”

A quick review of the medical record revealed the hernia repair was performed with the figure-of-eight suture, making it ineligible for unbundling and the provider had to repay the payer for the improperly unbundled and paid hernia surgery.

It is important that those involved in documenting the medical record and processing claims be aware of the rules and guidelines governing NCCI edits to avoid significant financial losses associated with incorrect billing practices. Often we will find providers appealing an unbundling denial when the Column 2 code has an indicator “0” linked to it.  Indicator “0” is assigned to Column 2 codes that can never be unbundled from its linked Column 1 code, no matter the circumstances. Without a good understanding of this policy, billers and even providers often spend time and resources appealing claims that will never be paid.

Sometimes the policy manual will fail to identify circumstances to justify unbundling a Column 2 code with an indicator “1.” When this occurs, you will need to look elsewhere for additional information to support the decision to unbundle. Medical journals and articles, research studies, and even associated medical societies may publish information that will justify and support the decision to unbundle but the reason for the unbundling must be identifiable within the documentation, so be sure to inform providers of the need for this important detail.

Lastly, when providers disagree with the NCCI edit code pair, they should submit information to support their disagreement and explain why unbundling should be allowed. This information is reviewed by the NCCI Editorial Panel, who seriously considers every request, and is an opportunity for providers to really get involved in effecting good coding policies.


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