September 07, 2018

House Panel Amends Local Coverage Determination Bill

The House Ways and Means Health Subcommittee passed by voice vote an amended version of H.R. 3635, the Local Coverage Determination Clarification Act, during a September 5 legislative markup.

Originally introduced by Reps. Lynn Jenkins (R-KS) and Ron Kind (D-WI), the initial version of H.R. 3635 offered various policy changes to improve transparency and bolster accountability within the processes used by Medicare administrative contractors (MACs) when issuing local coverage determinations (LCDs). The markup session provided committee members an opportunity to review and amend the bill before sending it to the floor for consideration by the full House of Representatives.

Medicare coverage policy decisions are made nationally and locally. National coverage decisions (NCDs) are made by the Centers for Medicare and Medicaid Services (CMS) to describe the circumstances under which Medicare will cover an item or service on a nationwide basis. In the absence of an NCD, the MACs, or private insurers that assist CMS with Medicare claims processing within specific geographic areas, may issue LCDs when Medicare’s coverage rules are too vague for a specific procedure or device. LCDs are not applicable for screening services.

Although LCD policies are not permitted to conflict with an NCD, MACs are allowed to adopt other LCDs from other MACs. This practice has drawn criticism from many stakeholders within the patient and physician community. They argue that permitting MACs to copy individual LCDs effectively transforms their decisions into de facto NCDs, albeit without the same rigor required from CMS when it issues national coverage determinations.

Further complicating the matter is the fact that local MACs are now responsible for much larger collections of states, a trend that has significantly reduced opportunities for physicians to interact with the contractor medical directors who establish local medical policies. CMS’ Program Integrity Manual instructs MACs on how to develop LCDs, but the process is woefully nontransparent and lacks sufficient outside involvement to ensure decisions are patient-centric and based on of sound scientific evidence.

As a result, the original version of H.R. 3635 seeks the following:

  • Requires the MACs’ Carrier Advisory Committee meetings to be open, public and on the record with minutes taken and posted on the MAC’s website for public inspection.
  • Requires MACs to include a description of the evidence they’re reviewing at the start of the LCD process when they’re analyzing whether to cover a particular service or device;
  • Creates a meaningful process by which providers and suppliers can appeal a MAC’s LCD decision to CMS;
  • Requires all MACs to individually assess relevant scientific and clinical information before adopting an LCD previously issued by an another MAC; and
  • Creates an ombudsman position to lend administrative and technical assistance to providers and suppliers when filing appeals. The ombudsman would be required to provide recommendations to the HHS Secretary on ways to improve the efficiency of the appeals process and to publicly disclose the number of appeals filed with the MACs and CMS each year and number of times the Secretary acted in response to the appeals filed with HHS

The amended version of H.R. 3635, introduced by Health Subcommittee Chairman Kevin Brady (R-TX), later removed provisions related to the ombudsman and the requirement that LCDs independently assess scientific evidence before copying another decision rendered by a MAC.

During markup, Brady highlighted that the committee’s Democrats feared the requirements pertaining to independent review of scientific evidence would place too great of an administrative burden on MACs. In addition, the ombudsman provisions were removed due to concerns that they duplicated similar measures enacted via the 21st Century Cures Act. As a compromise, provisions were added to the amended bill mandating the HHS Secretary issue an annual report to Congress about the number of appeals filed with the MACs and actions that were taken to remedy these disagreements.

Although the American College of Radiology (ACR) has been publicly neutral regarding H.R. 3635, it applauds the Ways and Means Health Subcommittee for reaching a bipartisan compromise. The College supports the underlying attempt to enhance transparency and accountability of MAC-issued LCDs.

It is unclear at this time when the amended version of the Local Coverage Determination and Clarification Act will be voted on by the full House of Representatives. A Senate companion bill, S. 794, introduced by Sens. Johnny Isakson (R-GA) and Tom Carper (D-DE), has 20 bipartisan cosponsors and awaits consideration in the Finance Committee.

ACR members are encouraged to closely monitor Advocacy in Action eNews for the latest developments for H.R. 3635 and S. 794. For more information, contact ACR Director of Congressional Affairs Christopher Sherin at