Inconsistencies in State Implementation of Correct Coding Edits May Allow Improper Medicaid Payments

Improper payments to healthcare providers constitute a significant vulnerability for Medicaid, costing an estimated $17.5 billion in fiscal year 2014. Automated claims processing safeguards called "edits" are critical program integrity tools that are available to State Medicaid agencies to prevent these improper payments. The Affordable Care Act required all States to implement the Medicaid National Correct Coding Initiative (NCCI) edits by October 1, 2010. The NCCI edits are designed to encourage providers to code correctly by automatically denying fee-for-service Medicaid payments for services that do not meet basic medical or billing standards.