Understanding National and Local Coverage Determinations
When a new drug or technology enters the market following FDA approval, Medicare may approve or deny coverage on a claim-by-claim basis and beneficiaries may face coverage restrictions until a national or local coverage determination is made. National coverage determinations and local coverage determinations are key decisions on whether a particular medical service, procedure, or technology will be covered under Medicare and are essential in shaping Medicare’s coverage landscape and often influence the commercial coverage landscape.
What is a National Coverage Determination?
A National coverage determination (NCD) is a decision made by the Centers for Medicare and Medicaid Services (CMS) regarding whether a particular medical service, procedure, or technology will be covered under Medicare. This determination establishes a nationwide policy that applies to all Medicare beneficiaries and ensures uniform coverage across the US.
NCD Application Process and Timeline
The NCD application process typically begins when a manufacturer submits a formal request to CMS, which triggers a detailed evaluation of the clinical evidence, cost-effectiveness, and public health implications. CMS may solicit input from its own experts or convene a Medicare Evidence Development and Coverage Advisory Committee (MEDCAC) meeting for further assessment. The entire NCD process generally takes 9 to 12 months, depending on the complexity of the technology or service being reviewed and the public comment period. Following the review, CMS publishes a final decision, either approving or denying national coverage. If denied coverage under an NCD, manufacturers may request a reconsideration which follows the same process as the initial application.
What is a Local Coverage Determination?
A local coverage determination (LCD) is a decision made by a Medicare Administrative Contractor (MAC) regarding whether a particular medical service, procedure, or technology will be covered under Medicare. This determination establishes a policy that applies to all Medicare beneficiaries within the MAC jurisdiction and ensures uniform coverage within the jurisdiction.
LCD Application Process and Timeline
The LCD application process typically begins when a MAC identifies a need for coverage guidance on a particular service or product, or when a manufacturer or provider requests an LCD. MACs review clinical evidence, consider Medicare’s statutory and regulatory framework, and sometimes consult with clinical specialists. The LCD process also involves a period for public comment and engagement with stakeholders. The entire process may take between 6 to 12 months, depending on the complexity of the service or product and the need for additional clinical evidence. Once the LCD is finalized, it applies only within the MAC’s geographic jurisdiction but can be used as a reference by other MACs.
What Is a MAC?
A MAC is a private healthcare insurer that is contracted by the Medicare Fee-For-Service (FFS) program to process Part A and Part B medical claims or Durable Medical Equipment (DME) claims for beneficiaries within MAC’s geographic jurisdiction. There are 12 MAC jurisdictions, all of which span multiple states and/or US territories.1 MACs are responsible for determining coverage under LCDs within their jurisdiction. They also play a key role in educating providers on Medicare billing requirements, fraud prevention, and ensuring that services meet medical necessity requirements under Medicare regulations.
Coverage Restrictions
Even when coverage for a product or service is established with an NCD or LCD, there may still be coverage restrictions. Restrictions may include limits on the eligible patient population and the setting of care, such as inpatient settings or specialized outpatient clinics, and restricting coverage to specific medical conditions or stages of disease. Off-label use of drugs or devices may also be excluded from coverage. There may also be coverage restrictions when the technology or service is used with other treatments or procedures, requiring specific conditions to be met before coverage is granted. Additionally, at the national level only, CMS may impose a coverage with evidence determination (CED) when issuing an NCD.
Coverage With Evidence Determination
CMS may issue an NCD with a requirement to generate additional clinical evidence, known as a CED. Under a CED, Medicare beneficiaries may be granted coverage of the new technology or drug on the condition that the manufacturer conducts a clinical trial or collects real-world evidence (RWE) to evaluate the technology’s effectiveness and safety. The CED ensures that CMS is able to assess the long-term outcomes and benefits of the technology, particularly in real-world Medicare populations, before granting full coverage. A clinical trial required by CMS under a CED is distinct from any post-marketing clinical trial required by the Food and Drug Administration (FDA). CEDs have generally been used for novel, high-cost technologies, such as new cancer therapies or breakthrough devices, where additional evidence is necessary to confirm clinical benefit before broader coverage is provided.
Medicare Coverage at Magnolia Market Access
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References:
Magnolia Market Access Authors: Amanda Forys, Amanda O’Hora, Tracy Baroni Allmon
