National and Local Coverage Determinations
Medicare coverage policies issued nationally (NCD) or by individual MAC contractors (LCD).
Definition
An NCD is a binding nationwide Medicare coverage decision; an LCD is a coverage decision by a Medicare Administrative Contractor applicable in its jurisdiction. Both define when an item or service is reasonable and necessary. NCDs are developed by CMS through a public process with a proposed decision, a comment period and a final decision. LCDs follow the process in the Medicare Program Integrity Manual, including open meetings and comment periods. Where no NCD or LCD exists, contractors decide claims individually. Coverage criteria often require specific diagnoses, physician qualifications or documentation.What this means in practice
Many device coverage paths begin as LCDs that influence later national policy. Manufacturers engage MACs early on evidence requirements and coverage gaps.Examples
- A manufacturer of a novel cardiac diagnostic device conducts a multi-center clinical trial to generate evidence supporting its clinical utility, aiming for an LCD with a regional MAC.
- A company developing an AI-powered diagnostic software seeks to understand existing NCDs related to imaging services to align their product
- s intended use and evidence generation strategy.
- •A common pitfall is failing to engage with MACs early in the product development lifecycle to understand evidence requirements for LCDs.
- •Another mistake is assuming that an LCD in one jurisdiction will automatically translate to an NCD or coverage in other MAC jurisdictions.
- •Companies sometimes underestimate the significant financial and time investment required to generate the clinical evidence needed to support NCD or LCD approval.
- •Ignoring the nuances of "reasonable and necessary" criteria, which can vary between NCDs and LCDs, can lead to unfavorable coverage decisions.
- •A pitfall is neglecting to monitor updates and revisions to NCDs and LCDs, which can impact existing coverage for MedTech products.
Frequently asked questions
Cross-references
Related terms
Grouped by themeEditor's picks
· Hand-selected related conceptsReimbursement & Market Access
· From this learning pathDiagnosis (CM) and inpatient procedure (PCS) coding systems used in U.S. claims.
Local and National Coverage Determinations from Medicare.
Financial model that estimates the total cost consequences of adopting a new technology to a payer's budget over a defined horizon.
AMA-maintained codes that describe medical procedures and services.
Where this term appears across MedTech Terms.
- Reimbursement & Market AccessLesson 5 of 14
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Sources
3 sourcesSources support the definition or relevant regulatory context, not necessarily every claim on this page. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.
Official citation replacements checked: . Medicare documents support Medicare coding, coverage or payment context, not every payer policy or CPT editorial procedure. Citation replacement does not change the full term review date.
- 142 CFR § 405.1060 : Applicability of NCDsTier 1 VerifiedeCFRecfr.gov
- 242 CFR § 405.1062 : Applicability of LCDsTier 1 VerifiedeCFRecfr.gov
- 3Medicare coverage determination process: national and local decisionsTier 2 UncheckedCMScms.gov
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