What Is LCD / NCD (Local & National Coverage Determinations)?
An NCD is a nationwide CMS coverage policy specifying whether Medicare will cover a service; an LCD is a coverage policy issued by a Medicare Administrative Contractor (MAC) for its jurisdiction when no NCD applies, defining medical necessity criteria and covered diagnosis codes.
- CARC 50 (not medically necessary) denials almost always trace back to an LCD/NCD criteria failure.
LCD / NCD (Local & National Coverage Determinations)
Also known as: Local Coverage Determination; National Coverage Determination; Medicare Coverage Policy
An NCD is a nationwide CMS coverage policy specifying whether Medicare will cover a service; an LCD is a coverage policy issued by a Medicare Administrative Contractor (MAC) for its jurisdiction when no NCD applies, defining medical necessity criteria and covered diagnosis codes.
Definition
NCDs are published by CMS in the Medicare Coverage Database under section 1862(l)(6) of the Social Security Act, are binding on all MACs, and apply nationwide. LCDs are issued by individual MACs and apply only within that MAC's jurisdiction. LCDs typically include covered ICD-10 diagnosis codes, frequency limits, documentation requirements, and noncovered indications. Both NCDs and LCDs go through public comment processes. Article documents (formerly LCAs) often accompany LCDs with billing and coding details. Most commercial payers have analogous medical policies, and many specifically reference Medicare LCDs/NCDs as their coverage standard. Which LCD applies is a function of MAC jurisdiction: CMS divides the country into 12 A/B MAC jurisdictions, and the LCD published by the MAC for your jurisdiction — not a neighboring contractor's — governs coverage for your claims, so confirm your jurisdiction before citing an LCD.
Example
Medicare's NCD for screening colonoscopy (NCD 210.3) covers it once every 24 months for high-risk beneficiaries and once every 10 years for average-risk. A MAC's outpatient physical-therapy LCD lists the ICD-10 codes it covers, the documentation it expects and the frequency it treats as reasonable — but it cannot make coverage conditional on the patient continuing to improve (see Common Misconceptions).
Common Misconceptions
An LCD only applies to the MAC's jurisdiction — practices in different MAC jurisdictions may face different LCD criteria for the same service. NCDs override LCDs whenever both exist for the same service. 'Medical necessity' for Medicare is defined by the LCD/NCD, not by the practitioner's clinical judgment alone. A further misconception is that skilled therapy stops being covered once the patient plateaus. Under the Jimmo v. Sebelius settlement, CMS states that coverage of skilled nursing and skilled therapy in the skilled nursing facility, home health and outpatient therapy benefits "does not turn on the presence or absence of a beneficiary's potential for improvement, but rather on the beneficiary's need for skilled care", and that a maintenance program is covered where an individualized assessment shows a qualified therapist's specialized judgment, knowledge and skills are necessary for its safe and effective performance. That is not a rule that maintenance therapy is always covered. CMS states the settlement "does not alter or supersede any other applicable coverage requirements", so the service must still be reasonable and necessary to diagnose or treat the condition, the LCD/NCD criteria and the documentation must still substantiate that skilled care was required and was in fact provided, existing statutory limits on the amount or duration of the benefit still apply, and coverage is not available where the patient's needs can be met safely and effectively by nonskilled personnel.
Practical Application
Before billing services with frequent denials (PT, advanced imaging, certain injections), pull the relevant LCD or NCD from the CMS Medicare Coverage Database (MCD), confirm the diagnosis code is covered, and document the medical-necessity criteria in the encounter note. CARC 50 (not medically necessary) denials almost always trace back to an LCD/NCD criteria failure.
Related Terms
CMS
CMS is the federal agency within the U.S. Department of Health and Human Services that administers Medicare, jointly administers Medicaid and CHIP with the states, and oversees the Health Insurance Marketplaces and HIPAA administrative simplification.
Read definitionMAC (Medicare Administrative Contractor)
A Medicare Administrative Contractor is a private organization that contracts with CMS to process Medicare Part A and Part B claims (or DME claims) within a defined geographic jurisdiction, applying CMS coverage rules and publishing local coverage determinations.
Read definitionICD-10-CM
ICD-10-CM is the U.S. clinical modification of the WHO's ICD-10 diagnosis code set, maintained by the CDC's National Center for Health Statistics, used to report diagnoses on all HIPAA-covered claims.
Read definitionCARC 50
CARC 50 is the X12 claim adjustment reason code a payer returns when it has determined that a service does not meet its coverage criteria for medical necessity — a Medicare local or national coverage determination, or a commercial plan’s own medical policy.
Read definitionWhere This Applies on MedPrecision
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