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Medicare Compliance & Reimbursement

Hospitals:

Stay On Top Of Ever-Changing Coverage Determinations

Published on Fri Sep 17, 2004

How to bone up on regulatory changes' impact on your business.

With the changes that recent Medicare legislation has made to what's covered and what's not, ignorance about the ins and outs of LMRPs, LCDs and NCDs can mean big reimbursement and compliance problems.

Before you drop the next claim filled out according to outdated rules, read this to figure out where to turn for updated information.

Get to the Nitty-Gritty: LMRPs

In short, local coverage determinations (LCDs) are less specific than local medical review policies (LMRPs), and an LMRP can include one or more LCDs.

An LCD is a decision by a Medicare contractor about whether they'll cover a certain service or procedure, and only tells you if the service/procedure meets the standards for "reasonable and necessary," says Steve Cooper, RHIT, senior consultant of health information management (HIM) services at HCA in Nashville, Tenn.

LMRPs, however, may give you information about benefit categories, statutory exclusions, coding, and what services are "reasonable and necessary." According to CMS, an LMRP "outlines how contractors will review claims to ensure that they meet Medicare coverage requirements." Reviewing local medical review policies assists in understanding why Medicare claims may be paid or denied.

Move on up to LCDs

To comply with the Benefits Improvement and Protection Act (BIPA), all Medicare-contracted insurers will have retired their LMRPs and implemented LCDs instead within the next two years - by December 2005. "Since LMRPs are an 'administrative and educational tool' to assist providers in submitting correct claims for payment, the less-specific LCDs may create some confusion as to how to file such claims properly," says Sarah Goodman, MBA, CPC-H, CCP, president of consulting firm SLG Inc. in Raleigh, NC.

During this period of transition, when you're challenging coverage of a service, use "LCD" to refer to the "reasonable and necessary" provisions of an LMRP or LCD, Cooper says.

"Reasonable and necessary" information includes the indications and limitations of coverage - such as what counts as medically necessary - for the specific service, Cooper says. It also includes other information from the detailed LCD that you can challenge, such as frequency thresholds, diagnoses, diagnosis codes and reasons for denial.

The catch: You can't appeal based on any information that's not part of the "reasonable and necessary" information, Cooper says. That means you're not allowed to challenge based on additional information in the policy, which could include billing processes and miscellaneous comment sections that relate to the determination. "These [sections] are not subject to comment," Cooper says.

Understand the Big Picture With NCDs

National coverage determinations (NCDs) are the big cheese of Medicare coverage policy. Unlike LCDs, NCDs include much more than information about what's "reasonable and necessary," such as public input, expert opinion, medical and scientific information, Food and Drug Administration information, and information gathered from clinical trials. "NCDs should help restore some of what is lost in the transition from LMRPs to LCDs," Goodman says.

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) has recently updated the NCD development process so you can be more involved. As of Jan. 1, 2004, you can count on the following improvements:

  • Quicker decisions. Six months or less after CMS receives completed requests (for NCDs that don't need external technology assessment [ETA] or Medical Coverage Advisory Committee review), the agency will decide the fate of the requests. For requests that do need ETA assessment or committee review - and don't need a clinical trial - they'll hand down the decision no later than nine months after the completed request.

  • Access to NCD drafts. CMS will make drafts of the proposed decisions available on its Web site six to nine months after they make the decision - and you'll have a month to comment on them. After they receive your input, they'll review the comments and issue a final decision in 60 days.

    "The intent of the LCD and NCD is to position Medicare beneficiaries to challenge these policies better," Cooper says. "And HIM and the provider community as a whole always benefit from standardization." Until LCDs are fully in place, Cooper recommends that providers review their remittance advice closely, to be sure that any denials based on medical necessity are appropriate.

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