About Local Coverage Determinations (LCDs)

Understanding what they are, how they impact your practice and how to access the National Coverage Database to find a particular LCD.

What is a Local Coverage Determination?

Each Medicare contractor has the discretion to establish which services are reasonable and necessary and therefore covered as a Medicare benefit. These coverage policies are issued in a document called a Local Coverage Determination (formerly the Local Medical Review Policy). There are three types of LCDs that you may find on Medicare contractor websites or on the on the CMS Web site in the Medicare Coverage Database.

  • Final (Active) Local Coverage Determinations
  • Draft Local Coverage Determinations
  • Retired Local Coverage Determinations

Starting in December 2003, Medicare contractors were required to convert their Local Medical Review Policies (LMRPs) to LCDs. While LMRPs could also include provisions about benefit categories and statutory exclusions, LCDs are limited to provisions that establish clinical circumstances when services are considered to be reasonable and necessary.

Final LCDs

The majority of Medicare contractors have final (active) Physical Medicine and Rehabilitation LCDs. Each final LCD has an effective date and a distinct coverage area. LCDs typically include a description of each covered service, documentation requirements and information regarding the ICD-9 codes that do or do not support the medical necessity of the services provided.

Draft LCDs

LCDs are often revised to incorporate updated information. Revisions of this type do not require that the contractor provide for a comment period or notice period. However, the contractor must provide both a comment period and a notice period in the following situations: the establishment of a new LCD; the revision of an existing LCD to make it more restrictive; and the revision of an existing LCD that involves a substantive correction. In these situations the contractor must post the draft LCD and allow a comment period of 45 calendar days or more. After comments are received and revisions (if any) are made to the draft LCD, the final LCD must be posted with a minimum notice period of 45 calendar days.

During the draft LCD comment period contractors solicit comments and recommendations from a wide range of individuals and organizations including: affected providers and provider groups; relevant specialty societies and associations, other Medicare contractors and the general public. Comments and the contractor's responses are later summarized and posted on the contractor website for at least 6 months after the final LCD is published.

Retired LCDs

Medicare contractors are required to archive retired LCDs and create a mechanism for their retrieval. Typically, the retired LCDs can be found on the contractor Web site. They can be particularly useful during periods when there is no final LCD in effect for a particular coverage topic.

Practice Implications

Local Coverage Determinations provide guidance that assists providers in submitting correct claims for payment. LCDs also outline how the contractor will review claims to ensure that the services provided meet Medicare coverage requirements. Some of the important issues addressed in the LCD are:

  • Which services are covered and reimbursable - In the absence of a National Coverage Determination, Medicare contractors can establish their own coverage policies. For example, not all Medicare contractors cover or pay for iontophoresis.
  • How to properly code the services provided - The LCD should describe relationships between codes and provide information about how to bill for specific services.
  • Documentation requirements - The LCD describes the specific information that must be included in patient records to justify coverage for services.
  • Utilization guidelines - Medicare contractors may establish parameters for typical or expected utilization of specific services.
  • ICD-9 Codes that support or do not support medical necessity- Many LCDs include a list of the covered CPT codes paired with the ICD-9 codes that support the provision of that particular service. If an improper CPT/ICD-9 pairing is submitted on a claim the service will be denied.

Finding an LCD

Search the CMS Medicare Coverage Database.

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