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National Coverage Determination (NCD) and Local Coverage Determination (LCD) Guidance – How will an ALJ view these coverage guidelines when the Court is assessing whether my Medicare claims should be paid?

February 1, 2010 by  
Filed under ALJ Appeal

(February 1, 2010):  When treating patients, it is not uncommon for a physician to prescribe or utilize certain drugs and / or diagnostic treatments in an “off-label” fashion.  Depending on the insurance policy at issue, this may or may not be covered and paid by a third-party payor.  In the case of Medicare, the Centers for Medicare and Medicaid Services (CMS) has endeavored to better define Medicare’s coverage limits.

National Coverage Determination (NCD) guidelines describe the extent to which Medicare will cover specific services, procedures, or technologies on a national basis. Medicare coverage is limited to:

  • Items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury (and within the scope of a Medicare benefit category).
  • Determinations developed through an evidence-based process, with opportunities for public participation. In some cases, CMS’ own research is supplemented by an outside technology assessment and/or consultation with the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC).

Importantly, once an NCD is finalized and published, its coverage guidelines are binding on all Medicare contractors (including Program SafeGuard Contractors, Zone Program Integrity Contractors, Recovery Audit Contractors, Medicare Administrative Contractors (formerly Fiscal Intermediaries and Carriers) and Qualified Independent Contractors). Notably, NCDs are also binding on ALJs and the Medicare Appeals Council.

As set out in the Code of Federal Regulations:
42 C.F.R. § 405.1060   Applicability of National Coverage Determinations (NCDs).

(a) General rule. (1) An NCD is a determination by the Secretary of whether a particular item or service is covered nationally under Medicare.

(2) An NCD does not include a determination of what code, if any, is assigned to a particular item or service covered under Medicare or a determination of the amount of payment made for a particular item or service.

(3) NCDs are made under section 1862(a)(1) of the Act as well as under other applicable provisions of the Act.

(4) An NCD is binding on fiscal intermediaries, carriers, QIOs, QICs, ALJs, and the MAC.

(b) Review by an ALJ. (1) An ALJ may not disregard, set aside, or otherwise review an NCD.

(2) An ALJ may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD was applied correctly to the claim.

(c) Review by the MAC. (1) The MAC may not disregard, set aside, or otherwise review an NCD for purposes of a section 1869 claim appeal, except that the DAB may review NCDs as provided under part 426 of this title.

(2) The MAC may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD was applied correctly to the claim.

In the absence of a national coverage policy, an item or service may be covered at the discretion of the Medicare contractors based on a Local Coverage Determination (LCD).

An LCD (as established by Section 522 of the Benefits Improvement and Protection Act), is a coverage decision by a Medicare Administrative Contractor (previously issued by a Fiscal Intermediary (Part A) or Carrier (Part B) contractors).  LCDs are drafted to cover  a particular service as reasonable and necessary on a contractor-wide basis in accordance with Section 1862(a)(1)(A) of the Social Security Act.

Unlike an NCD, ALJs are not bound to follow an LCD.  Nevertheless, ALJs will give LCD coverage guidelines considerable weight. In representing health care providers, we work hard to persuade an ALJ that the services at issue do, in fact, qualify for coverage.

As set out in the Code of Federal Regulations:

42 C.F.R. § 405.1062   Applicability of Local Coverage Determinations (LCDs) and other policies not binding on the ALJ and MAC.

(a) ALJs and the MAC are not bound by LCDs, LMRPs, or CMS program guidance, such as program memoranda and manual instructions, but will give substantial deference to these policies if they are applicable to a particular case.

(b) If an ALJ or MAC declines to follow a policy in a particular case, the ALJ or MAC decision must explain the reasons why the policy was not followed. An ALJ or MAC decision to disregard such policy applies only to the specific claim being considered and does not have precedential effect.

(c) An ALJ or MAC may not set aside or review the validity of an LMRP or LCD for purposes of a claim appeal. An ALJ or the DAB may review or set aside an LCD (or any part of an LMRP that constitutes an LCD) in accordance with part 426 of this title.

Liles Parker attorneys have extensive experience representing health care providers in ALJ hearings.  Call us to discuss your case.  Your initial consultation is complementary.  We can be reached at:  1 (800) 475-1906.

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