All terms
National and Local Coverage Determinations
Medicare coverage policies issued nationally (NCD) or by individual MAC contractors (LCD).
Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026
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. What the regulation says
The Centers for Medicare & Medicaid Services (CMS) issues National Coverage Determinations (NCDs) as national policy, binding for all Medicare contractors and providers. Medicare Administrative Contractors (MACs) issue Local Coverage Determinations (LCDs) within their specific jurisdictions. These determinations clarify when an item or service is considered "reasonable and necessary" under the Medicare Act, often influencing product development and market access strategies for MedTech companies.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.
Common pitfalls
- •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
NCDs and LCDs directly influence whether a new MedTech product will be reimbursed by Medicare, which is critical for market adoption and financial viability. Without a favorable coverage decision, market entry can be significantly hindered.
Cross-references
Related terms
Shared paths + categoryReimbursement
Current Procedural Terminology Codes(CPT)
AMA-maintained codes used to report medical procedures and services for billing.
Reimbursement & Market Access
Reimbursement
Coverage with Evidence Development(CED)
Medicare paradigm conditioning coverage on participation in approved clinical studies or registries.
Same category
Reimbursement
ICD-10-CM / ICD-10-PCS
Diagnosis (CM) and inpatient procedure (PCS) coding systems used in U.S. claims.
Reimbursement & Market Access · adjacent
Reimbursement
LCD and NCD
Local and National Coverage Determinations from Medicare.
Reimbursement & Market Access · adjacent
Reimbursement
Budget Impact Model(BIM)
Financial model that estimates the total cost consequences of adopting a new technology to a payer's budget over a defined horizon.
Reimbursement & Market Access
Reimbursement
CPT Codes(CPT)
AMA-maintained codes that describe medical procedures and services.
Reimbursement & Market Access
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Primary references
2 sourcesLink health: 2 verified· last checked 2026-06-20
AdvaMed·1AMA·1
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