June 26, 2019

Local coverage determinations (LCDs) are defined in Section 1869(f)(2)(B) of the Social Security Act (the Act). This section states, “For purposes of this section, the term ‘local coverage determination’ means a determination by a fiscal intermediary of a carrier under part A or part B, as applicable, respecting whether or not a particular item or service is covered on an intermediary—or carrier-wide basis under such parts, in accordance with section 1862(a)(1)(A).” LCDs contain only reasonable and necessary conditions of coverage as allowed under section 1862(a)(1)(A) of the Act as opposed to the previously Local Medical Review Policies (LMRPs).

Defined on HIT.gov as the deliberate and unreasonable interference with the exchange and use of electronic health information (EHI), information blocking (or data blocking) is a prime target of the two new proposed interoperability rules issued by the Department of Health and Human Services in February shortly before HIMSS 2019.

What is all of this saying? Each Medicare contractor has the discretion to establish which services are reasonable and necessary.  Therefore, they are covered as a Medicare benefit.  These coverage policies are issued in a document called a Local Coverage Determination (formerly the Local Medical Review Policy). These can be found on Medicare contractor websites or on the CMS website in the Medicare Coverage Database.

LCDs provide guidance that assists providers in submitting correct claims for payment. LCDs can also outline how the contractor will review claims to ensure that the services provided meet Medicare coverage requirements.  The important items addressed are:

• Which services are covered and reimbursable
• Procedure requirements
• Provider qualifications
• Limitations
• ICD-10 codes that support or do not support medical necessity
• Documentation requirements
• Utilization guidelines

Although we understand the concept of medical necessity and are well-aware that invasive procedures and diagnostic studies should be performed only when medically necessary, sometimes medical necessity is harder to discern.

Each payer may have its own definition for medical necessity. However, the overall themes are similar:

• According to the Social Security Act, Medicare will not cover services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”
• The American Medical Association (AMA) Model Managed Care Contract suggests this definition of medically necessary services, “Health care services or procedures that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating and illness, injury, disease or its symptoms in a manner that is (a) in accordance with generally accepted standards of medical practice; b) clinically appropriate in terms of type, frequency, extent, site and duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of the patient, treating physician or health care provider.”
• Here’s what the Medicare Claims Processing Manual says about the issue:  Medical necessity is the “overarching criterion for payment in addition to the individual requirements of a CPT code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported.”

When it comes to selecting the appropriate level of care for any encounter, medical necessity trumps everything else, including the documentation of history, physical exam and medical decision making. For physicians this could mean that even great documentation of these components will not ensure protection if auditors find that the medical necessity is lacking.

Correctly documented diagnosis codes support the reason for the visit as well as the intensity of the service provided. Here are three strategies to incorporate into your diagnosis documentation habits:

• Ensure a diagnosis is documented for every procedure.
• Include as many specifics as possible to accurately describe the patient’s condition.
• Understand what procedure codes warrant an LCD diagnosis and include that information.

The basic difference between Medicare and commercial insurance is that Medicare is designed to absorb risk; serving individuals who have or may not have costly and complex medical needs, as well as the relatively healthy. Commercial insurance, however, is required to protect its business interests by avoiding those most likely to use medical care.

Medicare is a federally administered insurance program that Americans pay into throughout their working lives and enroll in after they retire; or in case of a serious disability. It pools the resources of the entire nation to protect older and disabled Americans from the risk of an unforeseeable financial disaster in the event of an acute illness, an injury or an expensive chronic condition. All American workers finance the program and all are covered by it once eligible: no one is excluded because of their age, health status or their income. Meanwhile, the program is obligated to pay for all necessary care for the eligible population, wherever they live in the country and whatever else may be true about their history, prospects and preferences. Medicare only denies claims for medically unnecessary care.

Commercial health insurance, even with regulations, has an entirely different mandate.  Its fundamental purpose is commercial.  Insurance corporations receive premiums that must fund the costs of their enrollees’ healthcare and administrative costs, as well as profit margins sufficient to allow borrowing in the capital markets.  To make that work, insurance firms avoid risk. They are rewarded for avoiding, within the rules of the day, those who are already sick, those likely to become sick and those whose incomes are relatively low. In short, private insurers must limit the risks they encounter in order to survive.

Although commercial health insurances function under an entirely different mandate than Medicare, there are carriers, such as Humana and UnitedHealthcare, who have adopted Medicare LCD policies. These policies include disclaimers indicating that the policy does not govern the coverage under specific plans or policies. Claims are still affected by factors such as state and federal laws and regulations, provider contract terms and the carriers’ professional judgement.  There are large number of carriers, such as Blue Shield and Harvard Pilgrim, who have devised their very own LCD policies and guidelines.

Monitored Anesthesia Care (MAC) is one of the largest anesthesia LCD policies. Specifying that MAC should be provided by qualified anesthesia personnel in accordance with individual state licensure. These qualified anesthesia individuals must be continuously present to monitor the patient and provide anesthesia care. During MAC, the patient’s oxygenation, ventilation, circulation and temperature should be evaluated by whatever methods are deemed most suitable by the attending anesthetist. Close monitoring is necessary to anticipate the need for general anesthesia administration or for the treatment of adverse physiologic reactions such as hypotension, excessive pain, difficulty breathing, arrhythmias, adverse drug reactions, etc. In addition, the possibility that the surgical procedure may become more extensive and/or result in unforeseen complications requires comprehensive monitoring and/or anesthetic intervention. The MAC service rendered must be reasonable, appropriate and medically necessary. MAC provided by anesthesia personnel may be necessary for the procedures if the patient has one or more of the conditions or situations found in the “ICD-10-CM Codes That Support Medical Necessity” section of the LCD policy. MAC may be necessary for the active and serious accompanying situations or conditions to ensure smooth anesthesia (and surgery) by the prevention of physiological complications.

Facet joint injections is another procedure gaining a lot of Medicare intermediary attention and resulting in revised LCDs. Typical policy states that facet joint injection techniques are both diagnosis and/or treatment techniques of chronic neck and back pain. However, the evidence of clinical efficacy and utility has not been well established in the medical literature There is a singular dearth of long-term studies. This is particularly problematic given the steroid dosages administered. These drugs alone may develop relief experienced by patients but are associated with serious adverse health events and could as well be administered orally. Hence ongoing coverage requires outcomes reporting as described in the LCD to allow future analysis of clinical efficacy.  Indications within the policy include:

• Patient must have history of at least three months of moderate to severe pain with functional impairment and pain is inadequately responsive to conservative care such as NSAIDs, acetaminophen, physical therapy (as tolerated).
• Pain is predominantly axial and, with the possible exception of facet joint cysts, not associated with radiculopathy or neurogenic claudication.
• There is no non-facet pathology that could explain the source of the patient’s pain, such as fracture, tumor, infection, or significant deformity.
• Clinical assessment implicates the facet joint as the putative source of pain.

If you have any questions concerning the LCD policies for your state feel free to contact your client service manager.

References:
https://www.cms.gov/Medicare/Coverage/DeterminationProcess/
https://www.aafp.org/fpm/2006/0700/p28.html
https://www.healthaffairs.org/do/10.1377/hblog20120215.016980/full/
https://www.bcbsga.com/medicalpolicies/guidelines/gl_pw_d056667.htm
https://www.humana.com/provider/medical-providers/education/claims/payment-policies