- Introduction
- About Provider Outreach and Education
- Advance Beneficiary Notice of Noncoverage for Not Reasonable and Necessary Denials
- Appeals/Reopenings
- Assignment of Benefits
- Comprehensive Error Rate Testing
- CMS-1500 Claim Form
- Deceased Beneficiary Claims
- Electronic Data Interchange
- Evaluation and Management Services
- Fraud and Abuse
- Health Professional Shortage Area
- Hospice
- Limiting Charge
- Medical Policy Development
- Medigap
- Modifiers
- Nonphysician Practitioners
- National Provider Identifier
- Participation Program
- Payment Floor Standards
- Provider Enrollment
- Refunds and Overpayments
- Ordering and Referring Claims Information
- Return/Reject
- Standard Remittance ANSI Codes and Remittance Advice
- Appendix 1: Forms
- Appendix 2: Glossary
- Appendix 3: Place of Service Codes
Medicare Part B 101 Manual
Medical Policy Development
Table of Contents
- Medical Policy Development
- National Policies
- Local Policies
Medical Policy Development
The primary authority for all coverage provisions and subsequent policies is the Social Security Act. Medicare contractors use the following documents as guidance in developing coverage provisions:
- NCDs
- Coverage provisions in interpretive manuals, and
- LCDs with or without a Billing and Coding article
National Policies
National Coverage Determinations
Some medical policies are determined on a national basis by the CMS.
These policies, called NCDs, describe the circumstances for Medicare coverage nationwide for a specific medical service, procedure or device. The NCD generally outlines the conditions for which a service is considered to be covered (or not covered) under Section 1862(a)(1)(A) of the Act or other applicable provisions of the Act. They are binding on all Medicare carriers and providers.
National Coverage Provisions in Interpretive Manuals
Coverage provisions in interpretive manuals are instructions that are used to further define when and under what conditions services may or may not be covered.
Local Policies
Local Coverage Determinations
Section 522 of the BIP created the term “local coverage determinations.” LCDs are decisions made by a carrier whether to cover a particular service in accordance with Section 1862(a)(1)(A) of the Act.
The LCD contains only “reasonable and necessary” information. In addition, the National Government Services Part B Contractor has opted to also create an optional “article” which is referred to as the Billing and Coding article.
Typically, LCDs specify whether a service is covered (including under what clinical circumstances it is considered to be reasonable and necessary), and correctly coded. They act as administrative and educational tools to assist providers in submitting correct claims for payment. Contractors publish LCDs to provide guidance to the public and medical community within a specified geographic area.
The LCD coupled with its associated Billing and Coding article usually address one or more of the following issues.
- Is the service covered under the provisions of the SSA?
- If the service can be considered for coverage, is it investigational or is it well established medical practice? (Included in this is a consideration of whether the service is safe and effective.)
- What are the indications for rendering the service, i.e., what symptoms, signs, personal medical history, or prior test results justify the necessity of the service in a particular patient?
- How frequently or for what duration may the service be administered?
- Who should appropriately provide the service?
- What is the appropriate place of service?
- What is the proper coding for the service?
- What documentation is required?
Policy Development
Certain LCDs relating to medical necessity issues are subject to a formal development process. The CMD utilizes data as well as other tools to coordinate this development.
LCDs are based on published authoritative evidence derived from clinical trials, definitive studies, general standard of practice, scientific data or research studies published in peer reviewed medical journals, consensus of expert medical opinion of recognized authorities in the field and consultations with medical associations or other health care experts.
The CMD may contact and discuss the development of a new policy or the revision of a current policy with other contractor medical directors in their region in an attempt to work toward more uniform policies. As well, there may be an exchange of information with contractor medical directors from other states in order to work toward more uniform regional and national policies.
When a new policy is developed (or a current policy is revised that will restrict coverage), the initial policy draft is subject to a “Notice and Comment” period. View them at Local Coverage proposed LCDs by Contractor Report Results.
“Draft LCD Open Meetings” are scheduled three times per year and are held to promote discussion of draft policies. Interested parties, including providers, physicians, billing staff, vendors, manufacturers, beneficiaries, and caregivers are invited to attend. Comments may also be solicited from appropriate groups of health professionals and provider organizations that may be affected by the LCD, other contractors, QIOs, and Medicare regional staff.
Any interested party may send a request to make a formal presentation at a Draft LCD Open Meeting.
As well, the draft LCD is distributed to the members of the CAC. For the National Government Services Part B contract, each state has its own CAC. This committee consists of physicians from specialty societies, a beneficiary representative, as well as other medical organizations. CAC meetings are held three times a year. The focus of the CAC is policy and administrative development.
The purpose of the CAC is to provide:
- a formal mechanism for physicians in the state to be informed of and participate in the development of an LCD in an advisory capacity;
- a mechanism to discuss and improve administrative policies that are within contractor discretion; and,
- a forum for information exchange between the contractor and the physicians within the contractor’s jurisdiction.
This enhanced medical policy development process began with the creation of the CMD position in December 1988, and has gradually been expanded. CMS and Medicare contractors want to ensure that their policies are medically sound. Further, CMS and Medicare contractor's endeavor to involve physicians in the development of policies to make certain that the policies are communicated clearly to providers.
The CMD considers all comments received on a draft policy. Revisions that are deemed appropriate are completed in the final iteration of the policy. Final policy implementation always rests with the CMD.
The official LCD is the version the Medicare Coverage Database. Notification of final policies, revised policies, and rescinded policies are communicated via the National Government Services Email Updates program.
LCD Reconsideration Request Process
The purpose of this process is to provide a mechanism by which interested parties may request a revision to a current policy. The LCD reconsideration process is available only for final policies. The requirements for requesting a valid reconsideration to a policy can be found at LCD Reconsideration Process ‒ Medical Policy Article (A52842).
Revised 11/1/2024