The Importance of Understanding CMS National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs)

How many times have you, as a provider, received a denial from Medicare because a service you have furnished to a patient is not covered or does not meet coverage criteria? Or had that service deemed “experimental”? It is important to know what policy is in place for a service you furnish to a patient to ensure proper reimbursement from Medicare.

National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) are created by the Centers for Medicare & Medicaid Services (CMS.) They apply to all Medicare providers to establish how a service will be covered; what criteria is required to establish medical necessity; and what documentation requirements there are for the service.

NCDs:

·      Establish and communicate medical necessity guidelines

·      Promote understanding for proper billing of claims

·      Assure conformity

·      Help eliminate and/or identify potential problems or errors

·      Decrease appeals

·      Reduce audit errors

Local Coverage Determination Policies are established by local contractors and only apply to certain Medicare Administrative Contractors (MACs).

LCDs:

·      LCDs created by MACs

o   Local contractor level

o   Contractor Medical Directors’ (CMD’s) responsibility

·      May or may not be associated with NCD

o   Assist in determining reasonable and necessary criteria

·      LCDs cannot restrict or conflict with NCDs or any CMS interpretive manuals

·      Not all services have a policy

·      Contain reasonable and necessary language

·      Provide coverage guidance

·      Include documentation requirements to support medical necessity

Local Coverage Articles (LCAs) are additional documentation that accompany an LCD that will outline the billing guidelines associated with the LCD. LCAs give guidance on what CPT codes the LCD covers as well as what diagnosis codes (ICD-10 codes) support the medical necessity of the procedure. Always read both the LCD and LCA to determine if the diagnosis you are treating supports the medical necessity of the procedure you need to perform.

Locating a coverage policy prior to performing a service for a patient can mean the difference between getting paid and not getting paid for the service you furnish.

Acquaint yourself with your region’s Medicare Administrative Contractor website. Each MACs website will have a section available to search for LCDs. It will allow key words or CPT codes to search.

We at PMRG are working hard to communicate the proper coding and billing guidelines with our clients to ensure you are reimbursed for the hard work you do. If you have any questions regarding Medicare coverage criteria, LCDs or LCAs, please reach out to Jana Holt at jholt@medicalpmrg.com.