How Medicare's Local Carrier Determinations Affect You

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March 29, 2022

You’re a Medicare provider. And you know that the Centers for Medicare and Medicaid Services (CMS) runs Medicare. But did you know that CMS is just the umbrella organization? The actual administration is done by a Medicare Administrative Contractor (MAC.)  

What is a MAC? 
A MAC is a private health care insurer that’s been awarded a geographic jurisdiction to process claims for Medicare Fee-For-Service beneficiaries.  

CMS relies on the network of MACs to serve as the primary operational contact between the Medicare Fee-For-Services program and providers enrolled in the program.  MACs are multi-state, regional contractors that administer both Medicare Part B claims. Some of the activities the MACs include:

  • Processing claims, enrolling providers, handling 1st stage appeals redetermination requests, responding to provider inquiries, educating providers about Medicare billing requirements, reviewing medical records for selected claims and establishing local coverage determinations 

One of the functions of each MAC is to establish local coverage determinations (LCD.)  An LCD is a determination of whether a particular item or service is going to be covered on a contractor–wide basis. 

Before an LCD can be put in place, there's a whole process:

  • The Proposed LCD describes the MAC’s proposed determination regarding coverage, non-coverage or limited coverage for a particular item or service. The public announcement  begins with the date the proposed LCD is published on the Medicare Coverage Database.
  • After the proposed LCD is published, the MAC has to provide a minimum of 45 calendar days for public comment. 
  • The MAC has to establish a Contractor Advisory Committee to discuss the quality of evidence used to make a determination. You can volunteer to be part of the CAC. While you won’t get paid for your participation, this is your opportunity to have your interests heard. 
  • The MAC holds open meetings to discuss the review of the evidence and the rationale for the proposed LCD.  
  • Once these steps are completed, the final LCD and the response to comment  is published. This marks the beginning of the required notice period of a minimum 45 calendar days before the LCD can take effect. 

There is an LCD reconsideration process. As a physician you can request a revision to an LCD—either in its entirety or any provision. 

An LCD can definitely throw a wrench into your revenue cycle management if it takes you by surprise. It’s imperative that your billing folks keep you abreast of any new LCDs or changes to an existing one. Just because something was medically necessary and being reimbursed, that doesn’t mean it will be in perpetuity.

You want to make sure that your billers are checking the MAC website regularly. While it may seem that an LCD is merely a billing thing, that’s a very simplistic and largely incorrect view. LCDs have a direct impact on how you practice medicine. The more informed you are the easier it is to evaluate how an LCD effects your practice and can respond pre-emptively.

Here is a list of the MACs: https://www.cms.gov/files/document/macs-state-jun-2021.pdf

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00:00:00 Hi, it's Dr. Weitz. Thanks so much for joining me for this episode of the private medical practice academy. You're a Medicare provider. You know, that Medicare doesn't require prior authorization for provided services, but I'm sure that you also know that doesn't necessarily mean that Medicare is going to pay you for everything that you do. If you read the nutso fine print,


00:00:23 whether they pay you depends on whether Medicare determines that the provided service was medically necessary. The question is how to figure out what Medicare will pay for before you provide that service. The reason why should be self-evident no one wants to do stuff for free. The first step is understanding how Medicare works, the centers for Medicare and Medicaid services, otherwise known as CMS runs Medicare,


00:00:55 but in reality, CMS is just the umbrella organization. The actual administration is done by a Medicare administrative contractor, otherwise known as Mac. So what exactly is a Mac? A Mac is a private healthcare insurer. That's been awarded a geographic jurisdiction to process claims for Medicare fee for service beneficiaries. So what exactly is a Medicare fee for service beneficiary? This refers to those patients who have the old fashioned 80 20 Medicare,


00:01:32 where Medicare covers 80% of the allowed charge and the patient or their secondary insurance is responsible for the other 20%. Just to be clear, this has nothing to do with Medicare advantage programs, which are not under the jurisdiction of Macs. CMS relies on the network of Macs to serve as the primary operational contact between the Medicare fee for service program and providers enrolled in the program.


00:02:01 Max are multi-state regional contractors that administer Medicare part B. So some of the activities that Macs perform include processing claims, enrolling providers handling first stage appeal, redetermination requests, responding to provider inquiries, educating providers about Medicare billing requirements, reviewing medical records for selected claims and establishing local coverage determinations. When you have a question for Medicare, you don't call CMS. You actually have to call your local Mac.


00:02:42 If you're wondering who your Mac is, I've attached a list of the Macs to the show notes with this podcast episode. Now that you understand that there are multiple Macs and know how to find your Mac, you might think that all Macs follow the same rules. And while that may seem logical, it's not right. One of the functions of each Mac is to establish local coverage,


00:03:06 determinations or LCDs. And LCD is a determination of whether a particular item or service is going to be covered on a contractor-wide basis. In other words, your Mac may have an LCD that a particular service is reimbursable. While your friend who is under a different Mac may discover that the same service under the same set of circumstances is not reimbursable. And as a side note,


00:03:35 I just want to tell you, this is why posting things in a Facebook group and asking an opinion is sometimes very dangerous. It's a great way to get misinformation. One of the things that has to happen is you need to understand the rules and understand how this works once you do, then it is much easier to figure out where your rules come from and how to actually implement them correctly.


00:04:03 Well, max have the statutory authority to make local carrier determinations. There are rules that they have to abide by to establish transparency for patients and providers. So while sometimes people feel that LCDs are implemented just arbitrarily, that's not actually the case. Max have the statutory authority to make the LCD, but there are rules that they must abide by in order to establish transparency for patients and providers before an LCD could be put in place.


00:04:35 There's a whole process. It starts with informal meetings to develop the LCD interested parties can have informal meetings for educational purposes to discuss potential LCD requests, max publish how interested parties can contact them to set up an informal meeting. And that information is published on the Macs website. One of the purposes of these meetings is to have relevant to evidence needed for review for the coverage to be submitted along with a request for a formal review and OCD can be requested by beneficiaries residing or receiving care in a contractor's jurisdiction,


00:05:14 healthcare professionals, doing business in a contractor's jurisdiction and or any interested party doing business in a contractor's jurisdiction. The formal request for an LCD needs to be in writing and can be sent to the Mac via email fax or snail mail letter. It needs to include the language that their requests are once in an LCD and be supported with peer-reviewed evidence and information that addresses the relevance,


00:05:41 usefulness clinical health outcomes, or the medical benefits of the item or service before drafting and during the development of an LCD, the Mac is supposed to supplement their research with clinical guidelines, consensus documents, or consultation with experts, medical associations, and other healthcare professionals. When a Mac consults, an expert, they get consent from the expert to publicly disclose their opinion and identify it within the proposed or final LCD.


00:06:12 All proposed LCDs must follow the LCD process that consists of consultation, publication of proposed LCD open, meaning concerning the proposed policy opportunity for public comment and writing publication of the final LCD. That includes a response to the public comments that have been received and notice to the public of a new policy, 45 days in advance of the effective date. Now let's go through this.


00:06:41 Step-by-step the proposed LCD describes the max proposed termination regarding coverage non-coverage or limited coverage for a particular item or service. The public announcement of the max proposed determination begins with the date of the proposed LCD being published on the Medicare coverage database website. Along with an LCD summary sheet, the LCD summary sheet is a document that summarizes contractor actions related to the LCD, including information about when there's going to be an open meeting.


00:07:18 After the proposed LCD is published, the Mac has to provide a minimum of 45 days for public comment. They have to establish a contractor advisory committee to discuss the quality of evidence used to make the determination. This committee's purpose is to provide a formal mechanism for providers to be informed of the evidence that was used in developing the LCD and promote communications between the Mac and the healthcare community.


00:07:49 The contractor advisory committee is advisory in nature. With the final decision resting with the Mac, you can actually volunteer to be part of the contractor advisory committee while you won't get paid for your participation. This is really your opportunity to have your interests hurt all too often. LCDs result in changes in what's covered or reimbursed. And then physicians complained about it. I'll talk about mechanisms for addressing LCDs.


00:08:19 You don't agree with after the fact, but it is much harder to do it after it's already in place. This is really the time where you can get involved and have an impact. Another opportunity comes when the Mac holds open meetings to discuss the review of the evidence and the rationale for the proposed LCD. Once these steps are completed, the final LCD and the response to comments are published.


00:08:46 This marks the beginning of the required notice period of a minimum of 45 calendar days before the LCD can actually go into effect. Then there is no LCD reconsideration process. As a physician, you can request a revision to an LCD, either in its entirety or any provision within an LCD can definitely throw a wrench into your revenue cycle management. If it takes you by surprise,


00:09:14 it's imperative that your billing folks keep you abreast of any new LCDs that are proposed or any changes to existing ones, just because something was deemed medically necessary and was previously being reimbursed. Doesn't mean that that is going to continue in perpetuity. For example, our Mac changed the approved ICD tens for which an epidural steroid injection was deemed medically necessary. As you can imagine,


00:09:45 if you're not aware that there's been a change like this, you're hit with a bunch of denials. You haven't gotten an ABN because you didn't know that there was going to be a change in coverage, and you may not be able to meet the new criteria for the LCD. So you can't even appeal. It. You'll want to make sure that your billers are checking the Mac website weekly.


00:10:07 You'll want to know whether there have been any new proposed LCDs or final determination LCDs. Your billers should notify you as soon as there is any change to any LCD, but at minimum, there should be one of the questions you ask every month as part of your end of the month reports meeting with the billing people, don't ally on your billers to know which LCD is relevant to your practice.


00:10:33 While it may seem that an LCD is merely a billing thing, that's a very simplistic and largely incorrect view. LCD is have a direct impact on how you practice medicine. The more informed you are, the more proactive you can be in figuring out how the LCD is actually going to impact your practice. Thanks for joining me, please be sure to sign up for my newsletter below,


00:10:56 I'll be sending you tips on how to start a practice, grow a practice, and then add multiple services so that you can maximize your revenue.

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