Form CMS-10398 (#28) CMS-10398 (#28) Advance Planning Document (APD) Template for Implementat

OMB Control Number 0938-1148
Expiration date: 10/31/2014
ADVANCE PLANNING DOCUMENT (APD) TEMPLATE FOR IMPLEMENTATION
OF THE NATIONAL CORRECT CODING INITIATIVE (NCCI) IN A STATE’S
MEDICAID MANAGEMENT INFORMATION SYSTEM (MMIS)

Name of State: ____________________
Name of State Medicaid Agency: ________________________________________
Name of Contact in State Medicaid Agency: _______________________________
E-Mail Address of Contact in State Medicaid Agency: _______________________
Telephone Number of Contact in State Medicaid Agency: ____________________
Date of Submission to CMS Regional Office: ______________________________

DISCLAIMERS
PRA Disclosure Statement: According to the Paperwork Reduction Act of 1995, no persons are
required to respond to a collection of information unless it displays a valid OMB control
number. The valid OMB control number for this information collection is 0938-1148. The time
required to complete this information collection is estimated to average three hours per response,
including the time to review instructions, search existing data resources, gather the data needed,
and complete and review the information collection. If you have comments concerning the
accuracy of the time estimate(s) or suggestions for improving this form, please write to: CMS,
7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Mail Stop C4-26-05,
Baltimore, Maryland 21244-1850.
For the definition of an Advance Planning Document (APD) in federal regulations, see 45 CFR,
Part 95, Subpart F.
A state is requested to submit this APD to its CMS Regional Office in accordance with:
- the State Medicaid Director letter, SMD #10-017, ACA #7, dated September 1, 2010,
on the NCCI and
- the following federal law and regulations regarding Medicaid systems operations and
conditions for federal financial participation (FFP):
•
•
•
•
•
•
•

Federal Social Security Act, Title XIX, 42 USC 1396 et seq.
45 CFR Part 92
45 CFR Part 95, Subpart F
42 CFR Part 433, Subpart C
Part II, Section 11 of the Medicaid Manual
45 CFR 205.37(a)(1)-(8)
45 CFR 307.15.

The time required to complete this information collection is estimated to average one hour per
response for each Part, including the time to review instructions, search existing data resources,
gather the data needed, and complete and review the information collection.
A state must obtain prior written approval from the appropriate, authorized federal agency before
expending any funds that may be eligible for federal financial participation (FFP).
45 CFR allows CMS a maximum of 60 days to review APDs before providing a response to a
state.

2

TABLE OF CONTENTS

Page
4

INTRODUCTION
PART I: REQUEST FOR CMS APPROVAL OF FEDERAL FINANCIAL
PARTICIPATION (FFP)

5

PURPOSE OF PART I OF THIS APD

5

CMS POLICY

5

SCOPE OF PART 1 OF THIS APD

5

INFORMATION REQUIRED FOR SUBMISSION OF PART I OF THIS APD

6

PART II: REQUEST FOR CMS APPROVAL OF STATE DEACTIVATION OF EDITS
CONTAINED IN THE MEDICAID NCCI METHODOLOGIES AFTER
MARCH 31, 2011

11

PURPOSE OF PART II OF THIS APD

11

CMS POLICY

12

INFORMATION REQUIRED FOR SUBMISSION OF PART II OF THIS APD

13

PART III: REPORTING REQUIREMENTS ON STATE IMPLEMENTATION OF THE
NCCI IN MEDICAID

14

SAVINGS DUE TO IMPLEMENTATION OF THE NCCI IN THE STATE’S
MEDICAID PROGRAM

14

3

INTRODUCTION
The purpose of this document is to provide information and a template to states for submitting an
Advance Planning Document (APD) to their CMS Regional Offices for implementing the
National Correct Coding Initiative (NCCI) in their Medicaid programs. The process and
requirements for implementing the NCCI in Medicaid are described in the State Medicaid
Director letter on the NCCI, SMD #10-017, ACA #7, dated September 1, 2010.
This APD template incorporates both “planning” and “design, development, installation, and
enhancement” activities for incorporating the NCCI into a state’s Medicaid Management
Information System (MMIS). It combines a “planning” APD and an “implementation” APD into
one template. This template only applies to the NCCI.
To ensure that you have all required content for submission of this APD, please contact the
MMIS lead in your CMS Regional Office.
A state should submit an APD to its CMS Regional Office with a cover letter signed by the
appropriate state official who is authorized to commit state financial and other resources.
Part I of this APD template is to be used by a state to request CMS approval of federal financial
participation (FFP) for its expenditures for planning and implementing the Medicaid NCCI
methodologies in its MMIS.
Part II of this APD template is to be used by a state to request CMS approval of state
deactivation of Procedure-to-Procedure (PTP) edits and / or Medically Unlikely Edits (MUEs) in
the Medicaid NCCI methodologies for processing Medicaid claims with dates of service on or
after April 1, 2011. None of these edits can be deactivated by a state after March 31, 2011,
without prior CMS approval.
If a state wishes to update or change its request after submitting Part I and / or Part II to its CMS
Regional Office, the state only needs to submit to its CMS Regional Office an APD Update with
the appropriate information and documentation for that Part of the APD.
Part III of the APD describes the information that a state is requested to report to its CMS
Regional Office on its implementation of the Medicaid NCCI methodologies. A state is
requested to report the savings that the state has achieved in using the Medicaid NCCI
methodologies in processing Medicaid claims each calendar quarter.

4

PART I
REQUEST FOR CMS APPROVAL OF FEDERAL FINANCIAL PARTICIPATION (FFP)
PURPOSE OF PART I OF THIS APD
The purpose of Part I of this APD is for a state to request CMS approval of FFP for the design,
development, installation, and enhancement of the state’s Medicaid Management Information
System (MMIS) for incorporation of the Medicaid National Correct Coding Initiative (NCCI)
methodologies into the state’s MMIS. A state Medicaid agency must submit an APD containing
the information described below to its CMS Regional Office to request this approval.
CMS POLICY
Contingent upon the state’s submission of the required information and documentation in Part I
of this APD, CMS will approve FFP for state expenditures for the design, development,
installation, and enhancement of the state’s MMIS for the incorporation of all Medicaid NCCI
methodologies into the state’s MMIS. March 23, 2010, is the date of the signing of the
Affordable Care Act. CMS requires all states to activate all PTP edits and Medically Unlikely
Edits (MUEs) in all six Medicaid NCCI methodologies for processing all Medicaid claims with a
date of service on or after April 1, 2011 (with the exception of the deactivation of select edits
previously approved by CMS).
The CMS will approve FFP only for past state expenditures since March 23, 2010, for which the
state provides documentation of the activities performed for the above purpose that were funded
by these expenditures.
SCOPE OF PART I OF THIS APD
The scope of Part I of this APD submitted by a state should include the state’s planned and actual
/ past and future expenditures for both planning and implementation activities for the design,
development, installation, and enhancement of the state’s MMIS to incorporate the Medicaid
NCCI methodologies into the state’s MMIS.
States have flexibility to add edits beyond the NCCI edits. However, state expenditures related
to the implementation of edits that are not NCCI edits must not be included in the state
expenditures for which FFP is being requested.

5

INFORMATION REQUIRED FOR SUBMISSION OF PART I OF THIS APD
Section I: Executive Summary
The Executive Summary consists of the Purpose of the Advance Planning Document,
Background, and Organization.
Section II: Statement of Need and Requirements Analysis
The Statement of Need and Requirements Analysis presents a summary of project needs and
objectives, including a summary of the alternatives considered, and a discussion of the
anticipated benefits of the proposed approach. This is a statement of the state’s needs and
requirements for incorporating the Medicaid NCCI methodologies into its MMIS.
The State Medicaid Director Letter for NCCI, and its enclosures, lay out the required objectives
and timeframes for states to meet the requirements of the NCCI statute. This section lays out
what the state will need to do to meet these requirements and timeframes. This should include
what efforts will be necessary and the rationale for those efforts.
Section III: Project Management Plan, Proposed Project Schedule, and Personnel
Resource Statement
Project Management Plan
The Project Management Plan should include:
- a detailed description of the nature and scope of activities to be undertaken;
- the method used to accomplish the project, including products and deliverables;
- the project organization;
- procurement tasks and subtasks required to complete this project, project procurement
activities, and procurement schedule, if procurement will be needed for this project; and
- state and contractor resource needs.
A table may be provided to lay out the proposed project organization. The table should include
the core project team, state Medicaid agency staff, and augmentation / contractor staff. The
project director / manager should be identified.

6

Proposed Project Schedule
The Proposed Project Schedule presents tasks and subtasks required to complete the objectives in
the form of a proposed overall schedule. This section should present a proposed overall schedule
of the tasks and subtasks required to meet the requirements.
The Proposed Project Schedule for NCCI should include the Project Schedule to implement all
five Medicaid NCCI methodologies based on the timeline outlined in the SMDL. It should also
include any project activities and milestones related to any request for deactivation of PTP edits
and MUEs that is being requested in Part II of this APD. Any such activities should be
scheduled to allow for CMS approval of any and all deactivations of NCCI edits and
implementation of those deactivations.
The Proposed Project Schedule may be displayed in a table (add rows as needed):
TASK

START DATE

FINISH DATE

Personnel Resource Statement
The Personnel Resource Statement identifies state and contractor staff resources and provides an
estimate of total staffing requirements and costs. Staffing requirements for activities for which
FFP is being requested in this APD should be specified in this section. If this APD includes a
request for CMS approval to deactivate any NCCI edits, staffing requirements for that effort
should be included.
TITLE / ROLE
Core Planning Project Team

FTE %

FTE #

Medicaid Agency Staff
Augmentation Staff
TOTALS

7

COST

Section IV: Estimated Total Project Cost, Prospective Cost Distribution, and Proposed
Project Budget
The Estimated Total Project Cost and Prospective Cost Distribution present the total project cost
and the overall request for federal financial participation (FFP). This would include the total
enhanced (90%) FFP and the total of any regular (50%) FFP. It should then give the requested
federal match amount and the state amount. The sum of these two amounts should equal the
total project cost.
In addition, Section IV should specify the period over which the FFP will be claimed based upon
the federal fiscal year. This will correspond to the Proposed Project Schedule from Section III.
Documentation should be submitted that identifies which NCCI implementation activities were,
are being, and will be performed by time period within these dates and the project costs
associated with each of the activities by time period.
As specified in Circular A-87, a cost allocation plan must be included that identifies all
participants and their associated cost allocation to depict non-Medicaid activities and nonMedicaid FTEs participating in this project, if any.
A table may be provided to lay out the proposed project budget. The table should include:
1. State Staff Costs (90% FFP)
2. Augmentation Staff Costs (90% FFP)
3. Non-Personnel Services Costs (90% FFP)
4. Training Costs (50% FFP) (State Medicaid Manual, Part 11, 11276.11)
5. Other Indirect Costs (50% FFP) (State Medicaid Manual, Part 11, 11276.9)
Please include any anticipated state-only costs.

8

COMPONENT MEDICAID
/ RESOURCE
COSTS
State Staff
Costs

MEDICAID
PERCENT
FEDERAL
MATCH 1

MEDICAID
FEDERAL
MATCH
AMOUNT

MEDICAID
STATE
AMOUNT

NONMEDICAID
COSTS

TOTAL
COSTS

90%

Augmentation
Staff Costs 2

90%

Direct NonPersonnel
Costs

90%

Indirect
Personnel and
Non-Personnel
Costs

50%

Training Costs 3

50%

Subtotals
State-Only
Costs (if any)

0%

$0

Totals
The total estimated cost of this effort is $xxx.
The amount of 90 percent FFP requested is $xxx.
The amount of 50 percent FFP requested is $xxx.
Section V: Assurances
Section V includes procurement activities, monitoring and reporting activities, including access
to records, licensing, ownership of software and the safeguarding of information contained
within the system.

1

Refer to Part 11 of the State Medicaid Manual for a complete list of reimbursable costs.
Please see “Contractual Services” in section 11265 of the State Medicaid Manual.
3
State expenditures for the “training of personnel directly engaged in the operation of an MMIS” may be eligible for
75 percent FFP. Please discuss this with your CMS Regional Office.
2

9

These assurances are based on automated data processing equipment for mechanical claims
processing, outlined in the Code of Federal Regulations (CFR) listed, the appropriate sections of
the State Medicaid Manual (SMM).
Please indicate by checking “yes” or “no” whether or not the state will comply with the Code of
Federal Regulations (CFR) and the State Medicaid Manual (SMM) citations.
Please provide an explanation for any “No” responses.
Procurement Standards (Competition / Sole Source)
SMM Section 11267

☐ Yes

☐ No

45 CFR Part 95.615

☐ Yes

☐ No

45 CFR Part 92.36

☐ Yes

☐ No

42 CFR Part 433.112(b)(5) – (9)

☐ Yes

☐ No

45 CFR Part 95.615

☐ Yes

☐ No

SMM Section 11267

☐ Yes

☐ No

Access to Records

Software & Ownership Rights, Federal Licenses, Information Safeguarding, HIPAA
Compliance, and Progress Reports
45 CFR Part 95.617

☐ Yes

☐ No

42 CFR Part 431.300

☐ Yes

☐ No

45 CFR Part 164

☐ Yes

☐ No

10

PART II
REQUEST FOR CMS APPROVAL OF STATE DEACTIVATION OF EDITS
CONTAINED IN THE MEDICAID NCCI METHODOLOGIES AFTER MARCH 31, 2011
PURPOSE OF PART II OF THIS APD
The State Medicaid Director letter, dated September 1, 2010, on the implementation of the NCCI
in Medicaid, as required by Section 6507 of the Affordable Care Act, states that all states must
incorporate and activate all PTP edits and MUEs contained in all five (now six) Medicaid NCCI
methodologies for all Medicaid claims with a date of service on or after April 1, 2011. A state
can deactivate PTP edits and / or MUEs in the Medicaid NCCI methodologies in its MMIS, but
can never deactivate the Medicaid NCCI methodologies themselves in its MMIS. 4 However,
after March 31, 2011, a state Medicaid agency can only deactivate, or continue to deactivate, any
of the PTP edits or MUEs in the Medicaid NCCI methodologies in its MMIS after receiving
prior approval from CMS.
The purpose of Part II of this APD is for a state Medicaid agency to request approval from CMS
to deactivate one or more PTP edits and / or MUEs in the Medicaid NCCI methodologies in its
MMIS. States which do not want to deactivate any edits contained in the Medicaid NCCI
methodologies in its MMIS after March 31, 2011, do not have to complete or submit this Part of
this APD.
This Part of this APD might be submitted by a state to its CMS Regional Office for the first time
after March 1, 2011, in three situations. (1) A state may not have identified any PTP edits or
MUEs that conflict with state law, regulations, administrative rules, or payment policies until
after March 1, 2011. (2) A new quarterly release of the Medicaid NCCI methodology files may
contain new or revised PTP edits or MUEs that now conflict with state law, regulations,
administrative rules, or payment policies. (3) A new state law, regulation, administrative rule, or
payment policy enacted after March 1, 2011, might conflict with one or more PTP edits and / or
MUEs in the Medicaid NCCI methodologies.
If a state which has received prior CMS approval for deactivation of one or more edits contained
in the Medicaid NCCI methodologies after March 31, 2011, subsequently wishes to request CMS
approval to deactivate additional edits contained in the Medicaid NCCI methodologies in its
MMIS, the state only needs to submit an e-mail to its CMS Regional Office to request this
approval. The APD Update should identify the additional edits that the state wants to deactivate,
describe the rationale for doing so, and include supporting documentation.

4

As stated in the State Medicaid Director letter on the NCCI (SMD #10-017, ACA #7), dated September 1, 2010,
PTP edits and MUEs are only one of four components of the NCCI methodologies. The other three components are
definitions of the types of claims subject to the edits, a set of claim-adjudication rules for applying the edits, and a
set of rules for addressing provider appeals of denied payments for services based on the edits.

11

CMS POLICY
The CMS may grant state flexibility to deactivate a PTP edit or MUE which conflicts with a state
law, regulation, administrative rule, or payment policy. CMS will not approve state deactivation
of a PTP edit or MUE after March 31, 2011, because the state is not operationally ready to
implement the edit.
For those edits that CMS approves for deactivation by a state after March 31, 2011, CMS will
provide the “deletion date” for those edits. The state must add the deletion date to the deletion
date field in the NCCI methodology edit files for each of the edits approved for deactivation for
each calendar quarter beginning with the calendar quarter in which the edit is first deactivated
and every calendar quarter thereafter. The new Medicaid NCCI methodology files for each
quarter are complete replacements of prior Medicaid NCCI methodology files; they are not files
containing only updates of previous files.
Although the Medicaid NCCI methodology files will be updated for each calendar quarter, a
state will not need to submit to its CMS Regional Office each calendar quarter an APD update to
request CMS approval to continue deactivation of PTP edits and MUEs that remain in conflict
with existing state law, regulations, administrative rules, or payment policies.
However, if the relevant state law, regulation, administrative rule, or payment policy changes, so
that it no longer conflicts with the edit(s), then the state is required to reactivate the edit(s) and
notify CMS of the changes and reactivation through an APD Update. The APD Update should
identify the edit(s) that the state is reactivating, describe the reason or rationale for doing so, and
include supporting documentation.
If a state reactivates one or more edits, the “effective date” for each of the reactivated edits must
be the first day of the calendar quarter in which the edit is active for claims processing. The state
must modify the “effective date” in the state’s Medicaid NCCI methodology edit files for each
reactivated edit to reflect the new “effective date”. Since the quarterly Medicaid NCCI
methodology files are replacement files, rather than update files, the state must modify the
effective date for each reactivated edit each quarter subsequent to the reactivation.
A state Medicaid agency cannot change or modify an activated edit contained in the Medicaid
NCCI methodologies. The edits in the Medicaid NCCI methodologies are specific to the NCCI.
Consequently, CMS is not providing state flexibility to modify PTP edits or MUEs. However,
CMS has authorized state flexibility to incorporate a changed or modified edit into its MMIS
outside of the Medicaid NCCI methodologies.
Specifically, if a state wishes to change or modify an edit, the state should submit this Part of this
APD to request CMS approval for deactivation of this edit in the Medicaid NCCI methodologies
after March 31, 2011. If CMS approves deactivation of the edit, the state should deactivate the
edit within its Medicaid NCCI methodologies and incorporate into its MMIS the edit in the
changed or modified form that it wishes to use instead. The changed or modified edit will not be
part of the Medicaid NCCI methodologies. States can use edits other than those contained in the

12

Medicaid NCCI methodologies, but they cannot deactivate any of the edits contained in the
Medicaid NCCI methodologies after March 31, 2011, without prior CMS approval.
INFORMATION REQUIRED FOR SUBMISSION OF PART II OF THIS APD
For each edit, or group of edits, in the Medicaid NCCI methodologies that a state requests CMS
approval to deactivate after March 31, 2011, please provide to the state’s CMS Regional Office
the information listed below:
•

Specify the edit file by provider category that the edit is contained in:
- practitioner / ambulatory surgery center;
- outpatient hospital; or
- durable medical equipment.

•

Specify the type of edit it is: PTP or MUE.

•

For PTP edits:
- list each edit in terms of its “column one / column two” code;
- provide the long (not the short) code descriptor for each code;
- provide the modifier indicator for the edit; and
- provide the effective date for the edit.

•

For MUEs:
- list each edit by its code number and
- provide its current MUE value.

•

If a state wants to deactivate an edit because it conflicts with a state law, regulation,
administrative rule, or payment policy, please:
- specify and describe the state law, regulation, administrative rule, or payment
policy the edit conflicts with;
- specify and describe what the conflict is; and
- provide a copy of the state law, regulation, administrative rule, or payment
policy that the edit conflicts with.

•

In the case of a new state law, regulation, administrative rule, or payment policy that an
edit conflicts with, please also include the date that the new state law, regulation,
administrative rule, or payment policy goes into effect.

•

Consistent with the information above, if a state wants to deactivate an edit and
subsequently change or modify the edit outside of the Medicaid NCCI methodologies,
please describe the change or modification of the edit that the state wants to make and the
reason for the change or modification.

13

•

If the state wants to deactivate the edit for another reason, please specify the reason,
describe the rationale for deactivation, and provide any supporting documentation. CMS
will assess the reason and rationale given for the proposed deactivation, but there is no
guarantee that CMS will approve deactivation of the edit for the reason and rationale
given.

A state can provide the above information (e.g., in a spreadsheet) as an attachment to Part II of
this APD that it submits to its CMS Regional Office.

PART III
REPORTING REQUIREMENTS ON STATE
IMPLEMENTATION OF THE NCCI IN MEDICAID
SAVINGS DUE TO IMPLEMENTATION OF THE NCCI IN THE STATE’S MEDICAID
PROGRAM
Each state is required to report to its CMS Regional Office for each calendar quarter the
estimated savings in Medicaid claims payments that the state achieved as a result of using the
Medicaid NCCI methodologies in processing its Medicaid claims.
A state’s MMIS may contain edits for processing Medicaid claims from a variety of sources,
e.g., the Medicaid NCCI methodologies, additional state-specific correct coding methodologies
and edits, edits from commercial off-the-shelf (COTS) software used by the state to process
Medicaid claims, and edits from the vendor the state contracts with to process Medicaid claims.
Denials for payments of Medicaid claims that are due to edits from these other sources that are
not contained in the Medicaid NCCI methodologies should not be attributed to the Medicaid
NCCI methodologies.

PRA Disclosure Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a
collection of information unless it displays a valid OMB control number. The valid OMB
control number for this information collection is 0938-1148. The time required to complete this
information collection is estimated to average 18 hours per response, including the time to
review instructions, search existing data resources, gather the data needed, and complete and
review the information collection. If you have comments concerning the accuracy of the time
estimate(s) or suggestions for improving this form, please write to: CMS, 7500 Security
Boulevard, Attn: PRA Reports Clearance Officer, Mail Stop C4-26-05, Baltimore, Maryland
21244-1850.
14