LCD Development

The Local Coverage Determinations (LCDs) and Policy Articles (PAs) define coverage criteria, payment rules and documentation that are applied to durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) claims processed by the DME MACs. The policies are a combination of national and local decisions. National policies are established by CMS and the DME MACs are required to follow national policy where it exists. However, when there is no national policy on a subject, the DME MACs have the authority and responsibility to establish local policy. Because many DMEPOS suppliers operate nationally, CMS requires that the LCDs published by the DME MACs be identical in each region. LCDs must be developed through a formal process that is coordinated by the DME MAC Medical Directors.

Outline of LCD development process coordinated by the DME MAC Medical Directors.

  1. DME Medical Directors gather, review and discuss the following:
    • National Medical Policy
    • Prior Local Carrier Policies
    • Claim Information
    • Information from:
      • Consultants
      • Manufacturers
      • Suppliers
      • Physicians
      • Other Health Professionals
  2. A draft LCD is developed through a coordinated effort of the DME Medical Directors and staff, PDAC and CMS staff.
  3. The draft LCD is published for "notice and comment"
    • The DME Medical Directors distribute the draft to:
    • Other Medicare carrier medical directors and consultants
    • National supplier, manufacturer, and clinical organizations
    • Interested healthcare professionals
    • Beneficiary organizations
    • A link to the draft LCD is posted to the DME MAC Website
  4. The "notice and comment" period lasts 45 days. Comments are submitted in writing either via regular or electronic mail.
  5. Open meetings are held during this period so the Medical Directors can receive additional comments.
  6. Remarks from the respondents are reviewed and changes are made in the policy as needed.
  7. The revised policy becomes the final LCD. It is submitted to CMS for approval.

Scope of Policies

The LCDs address many of the most frequently ordered DMEPOS items and services, but clearly not all. If coverage criteria for an item is not defined in a policy, then it means only general coverage criteria apply, i.e., the item must fall within a benefit category, it must not be excluded by statute or by national CMS policy as described in the Medicare National Coverage Determinations Manual or Medicare Benefit Policy Manual, and it must be reasonable and necessary in the individual case for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member.

When coverage is addressed in the LCDs, it only refers to coverage of claims processed by the DME MAC under specific benefit categories. The items described in the policies may be covered under other provisions of the law, e.g., as part of institutional care in a hospital or nursing facility, as an item incident to a physician's service, etc. However, in these circumstances, the claim would not be submitted to the DME MAC and the coverage statements in the DME MAC policy may not apply.

Local Coverage Determinations and Policy Articles

Medical policies are published in a format mandated by CMS. The policies are divided into two documents: an LCD and a Policy Article (PA). An LCD is a decision by a Medicare contractor whether to cover a particular item or service in accordance with the Social Security Act, i.e., a determination as to whether the item or service is reasonable and necessary.

LCD Major Sections

  • Indications and Limitations of Coverage and/or Medical Necessity - This section defines coverage criteria based upon a determination of whether an item is reasonable and necessary. It includes information from NCDs when applicable. When an item does not meet these criteria, it will be denied as "not medically necessary."
  • HCPCS Codes and Modifiers
  • ICD-9 Codes and Diagnoses that Support Medical Necessity
  • Documentation Requirements
  • Revision History

Policy Article Major Sections

  • Non-Medical Necessity Coverage and Payment Rules - This section identifies situations in which an item does not meet the statutory definition of a benefit category, e.g., durable medical equipment, prosthetic devices, etc. or when it doesn't meet other requirements specified in regulations. It also identifies situations in which an item is statutorily excluded from coverage for reasons other than medical necessity. In these situations, the policies will continue to identify the denial as "noncovered." This section may also include statements defining when an item will be denied as "not separately payable" or situations in which claim processing for the item is not under DME MAC Jurisdiction.
  • Coding Guidelines

Note: The term "Policy Article" is used in the title of the article to define the document that is related to the LCD.

Both documents taken together constitute the "medical policy" and are posted in the Medicare Coverage Database This link takes you to an external website.. In the CMS database, the PA can be accessed both as an attachment to the LCD and also as a separate article in the Articles section of the database.

Resources

Last Updated Mar 09, 2017