Medically Unlikely Edits and Advance Beneficiary Notice

on Wednesday, 28 March 2018. All News Items | FAQ

Outpatient FAQ March 2018


Can we give Medicare patients an Advance Beneficiary Notice (ABN) and bill them when services are denied for exceeding a Medically Unlikely Edit (MUE)?


No. Medically Unlikely Edits (MUEs) define correct coding and therefore the denials are coding denials. This means the provider is liable. Advance Beneficiary Notices (ABNs) are to be used when the provider expects denials related to the medical necessity of services. Since an MUE denial is a coding denial and not a medical necessity denial, an ABN is not appropriate.  The Medicare patient cannot be billed for services denied for exceeding MUE limits.

The MUE program began in January 2007 and was implemented to reduce the Medicare paid claims error rate. The MUE is a limit on the number of units Medicare will adjudicate. MUE values are adjudicated either against units reported on a line item of a claim or on an entire date of service. For date of service (DOS) MUEs, if units reported for a HCPCS code for one day exceed the MUE limit, no payment will be made for that code unless the denial is overturned on a provider-initiated appeal.

The type of MUE can be determined by the “MUE adjudication indicator” (MAI) in the MUE edit table. These indicators describe the type of MUE and how it is adjudicated.

  • An MAI of “1” is a claim line edit. The MUE may be by-passed when appropriate by reporting units exceeding the MUE on separate lines with an acceptable modifier.
  • An MUE with an indicator of “2” is an absolute date of service edit. Units of service exceeding the MUE value are considered “impossible” because they are contrary to statute, regulation or sub-regulatory guidance, including correct coding policies. Denials for services with an MAI of “2” will not be overturned on appeal.
  • MUEs for HCPCS codes with an MAI of “3” are date of service edits based on clinical guidelines. These edits will cause an automatic denial if the units for a date of service exceed the limit, but the denial may be overturned on appeal if there is adequate documentation of medical necessity of correctly reported units.

A recent article by Palmetto GBA (the Medicare Administrative Contractor (MAC) for Jurisdictions J and M) discusses MUE denials and ABNs.  Additional information on MUEs can be found on CMS’s NCCI/MUE website at including an NCCI FAQs download that addresses questions about procedure-to-procedure (PTP) edits and MUEs. Much of the discussion above was from a prior Wednesday@One article that readers may also find helpful. 

For more information on ABNs, see the MLN Booklet Medicare Advance Written Notices of Noncoverage.

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