The Changing Face of Local Medicare Reimbursement Policy
Ninety percent of Medicare policies are established at the local level, providing Medicare carriers with tremendous authority over payment policy in a given state. Through development of local Medicare policy, carriers indicate whether a procedure is considered reasonable, medically necessary, and appropriate in an attempt to clarify specific coverage guidelines, particularly in instances where a carrier has identified overutilization of a procedure. This includes the listing of indications and ICD-9 codes that support medical necessity. These policies, formerly termed "Local Medical Review Policies (LMRP)," are now referred to as "Local Coverage Determinations (LCD)," as a result of the Benefits Improvement and Protection Act of 2000 (BIPA), which called for all existing LMRPs to be converted to LCDs by December 2005. Overall, this transition will be relatively seamless, with the most notable changes occurring in the format of the policies; the meaning and implications of the change are described below. Importantly, the current Carrier Advisory Committee (CAC) structure, by which physicians have input into local Medicare policy, will be maintained and utilized for the development of new and revised LCDs.
The ACR Radiology, Radiation Oncology, and Nuclear Medicine CAC Networks assist CAC representatives with the review of LCDs and questions pertaining to local Medicare coverage. Given the importance of the CAC/LCD review process and its direct impact on reimbursement for services provided to Medicare beneficiaries, the ACR CAC networks were established to coordinate all CAC activities and assist CAC representatives in reviewing LCDs, ICD-9-CM codes that support medical necessity, and other Medicare carrier issues. Through the networks, ACR staff and other resources are available to CAC representatives and alternates. The ACR CAC networks actively advise and assist CACs in their interactions with Medicare at the local level to ensure appropriate coverage of radiology, radiation oncology, and nuclear medicine services.
What Is an LCD?
An LCD is defined by the Centers for Medicare and Medicaid Services (CMS) as "a decision by a fiscal intermediary or carrier whether to cover a particular service on an intermediary-wide or carrier-wide basis." Fiscal intermediaries are contractors who are responsible for the administration of Medicare Part A or hospital services claims, where carriers are responsible for the administration of Part B or physician services claims. LCDs are binding only within the contractor's jurisdiction; however, carriers across multiple jurisdictions often collaborate to develop uniform LCDs. The current CMS administration is working toward the goal of consistent policies between Medicare carriers and already requires carriers to have consistent policies for all states across their jurisdiction. For example, Trailblazer, the Medicare carrier for Delaware, the District of Columbia, Maryland, Texas, and Virginia, is currently in the process of consolidating its policies so there is only one LCD for each procedure to cover all 5 states, rather than having separate policies for each state.
LCD Versus LMRP
An LCD consists only of information pertaining to when a procedure is considered medically reasonable and necessary (eg, indications and ICD-9-CM codes), whereas an LMRP comprises coding guidelines, reasons for denial, and detailed descriptions of the procedure. Since LCDs do not include this information, carriers may now communicate such information to physicians through a separate publication, such as an article, which may be viewed on the carrier's Web site. If there is a corresponding article for an LCD, it must be referenced within the LCD. Many carriers (eg, Trailblazer, Empire, and Noridian) include links to the articles within their LCDs. These articles provide valuable information regarding proper coding of procedures and what the carrier considers reasons for denial.
In addition, LCDs, like LMRPs, may contain lists of CPT® codes that indicate the services the policy applies to as well as ICD-9-CM codes that are covered or not covered for the procedure. However, some Medicare carriers have chosen not to include lists of ICD-9-CM codes on their policies, but rather to determine coverage on an individual basis, based on the indications of medical necessity described in the policy. For example, the FCSO Florida policy on CT of the thorax (http://www.floridamedicare.com/provider/html/mainPage.asp) does not list specific ICD-9 codes. This is a new trend among carriers and tentatively appears to be a positive change, because LCDs with no ICD-9-CM codes mean that any code may be submitted for consideration. This is considered the least restrictive policy status next to no policy at all.
Conversion from LMRPs to LCDs
Although the Medicare carriers have begun the transition from LMRPs to LCDs, there appears to be wide interpretation of the guidelines outlined by CMS for the transition. For example, some carriers' draft LCDs are identical in format to LMRPs and continue to contain procedure descriptions, coding guidelines, and reasons for denial, in addition to language outlining when the procedure is considered medically necessary. Other carriers' draft LCDs contain a section at the end of the policy titled "General Information" or "Other Information," which contains coding guidelines. Finally, some carriers, such as Empire Medicare Services (New York and New Jersey), are converting LMRPs to LCDs precisely as directed by CMS, with LCDs containing only medical necessity language and separate articles containing coding guidelines. The Empire LCDs contain links to articles that include the corresponding coding guidelines.
The ACR has been working with CMS to resolve unanswered questions regarding the transition from LMRPs to LCDs. For example, will CACs have the opportunity to comment on the separate articles (ie, coding guidelines and reasons for denial) since they are technically not part of the LCD? It is important for carriers to seek the input of CAC members for all local coverage policies, including coding guidelines and reasons for denial, even though they are not formally included within LCDs. In addition, the ACR is researching whether information such as certification and accreditation requirements may be included in LCDs, similar to their inclusion on LMRPs (eg, noninvasive vascular ultrasound).