Medicare Coverage of Items and Services

Criteria for Medicare Coverage

In general, for an item or service to be considered for Medicare coverage it must:

1. Fall within at least one benefit category established in Section 1861 of the Social Security Act (the Act);
2. Not be specifically excluded by the Act; and
3. Be “reasonable and necessary” (R&N) for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member (§1862(a)(1)(A) of the Act).

Benefit Category Determinations

Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Benefit Category Determinations

CMS has procedures for making benefit category determinations and payment determinations for new DMEPOS items and services under Medicare Part B. The process involves posting of preliminary benefit category and payment determinations for new DMEPOS items and services on CMS.gov as part of the agenda for the Healthcare Common Procedural Coding System (HCPCS) Public Meeting and Consultation Process. The agenda and timing for the public meetings will be posted at the following site: https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/HCPCSPublicMeetings.

The Benefit Category Determination (BCD) process is separate and distinct from the HCPCS application, and an interested party can make a request for a BCD for a potential DMEPOS item or service independent from any associated HCPCS code request. Accordingly, an interested party may request a BCD for an item or service without requesting a change to the HCPCS. Once the BCD request is received, CMS would follow the process discussed in the above-referenced rulemaking, which includes discussing the BCD at a public meeting. Requests for a DMEPOS BCD that do not involve an associated HCPCS coding request, should be submitted via email to DMEPOS@cms.hhs.gov.

For more information visit:

• DME Center
• DMEPOS Federal Regulations and Notices

Overview of Medicare Coverage Pathways

National Coverage Determinations (NCDs)

NCDs are determinations by CMS regarding whether a particular item or service is covered (or not covered) nationally under Medicare. 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. NCDs are binding on Medicare Administrative Contractors (MACs), Qualified Independent Contractors (QICs), administrative law judges (ALJs) and attorney adjudicators and the Medicare Appeals Council within the Departmental Appeals Board of the U.S. Department of Health and Human Services.

Refer to the following resources for additional information about NCDs:

• Medicare Coverage Center
• Medicare Coverage Database
• Current NCDs
• NCD Process and Timeline
• How to Request an NCD
• Medicare Coverage Guidance Documents

Local Coverage Determinations (LCDs)

As defined in §1869(f)(2)(B) of the Act, LCDs are determinations by MACs regarding whether or not a particular item or service is covered on a contractor-wide basis in accordance with the “reasonable and necessary” standard in §1862(a)(1)(A) of the Act. LCDs may be developed in the absence of an NCD or as a supplement to an NCD as long as the LCD policy does not conflict with national policy. Most Medicare coverage decisions are made locally by the MACs.

The LCD process is defined in §1862(l)(5) of the Act. Additionally, Chapter 13 of the Medicare Program Integrity Manual (PIM) (PDF) instructs MACs on the procedures to follow when establishing LCDs. The PIM was revised in 2019 in response to a provision of the 21st Century Cures Act intended to improve transparency in the LCD process. The manual includes instructions, policies, and procedures for MACs that administer the Medicare program in different regions of the country, as well as guidance for stakeholder engagement in the process. The revised manual includes:

• Clear process “roadmap.” A step-by-step description of the LCD process in language that is accessible to all stakeholders.
• Consistent presentation of evidence. Standardized summary of clinical evidence supporting LCD decisions and a MAC coverage determination rationale.
• Informal meetings with MACs. Option to request an informal meeting with the MAC to discuss potential LCD requests.
• New LCD request process. A novel process by which interested parties in a MAC jurisdiction can request a new LCD.
• Restructured Contractor Advisory Committee (CAC) meetings. Meetings are open to the public. CAC members serve in an advisory capacity as representatives of their constituency to review the quality of the evidence used in the development of an LCD. MACs can host CAC meetings in various ways (e.g., in-person, telephone, video, webinar). MACs determine how frequently these meetings occur based on the appropriateness and volume of LCDs requiring CAC input. 
• More voices on CAC. In addition to physicians, other health care professionals can participate in the CAC. The CAC also must include beneficiary representation.
• Repurposed public meetings. Open meetings in the MAC jurisdiction to present proposed coverage, including evidence and rationale of decisions. MACs clearly identify the location, dates, and conference information (e.g., telephone, webinar) and distinguish these meetings from CAC meetings. 
• No “old” proposed policies. Proposed policies retired if not finalized within 1 year of the original posting date.
• Relocation of codes. International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and Current Procedure Terminology (CPT) codes removed from LCD in the future.
• Better communication. MAC responses to public comments are linked to the final LCD and remain in the Medicare Coverage Database indefinitely (archives). MACs notify the public when they publish a final decision and provide a web link to it.
• Consistent reconsideration process. LCD reconsideration process consistent with the National Coverage Determination reconsideration process. MACs must follow the full LCD process for valid requests.

For more information about LCDs refer to:

• Local Coverage Determination Process
• How to Request an LCD
• Recently Updated LCDs

Claim-by-Claim Review

In the absence of an LCD or NCD, claims are reviewed on a claim-by-claim basis by the MACs. In such cases, the MACs review the claim on an individual basis to ensure that all CMS requirements have been met prior to paying the claim.