Local Coverage Determination (LCD)
A Local Coverage Determination (LCD) is a decision issued by a Medicare Administrative Contractor (MAC) about whether a particular item or service is considered reasonable and necessary, and therefore eligible for coverage, within that contractor's geographic jurisdiction.
Updated
Medicare's fee-for-service claims are processed by regional contractors known as Medicare Administrative Contractors (MACs). Where no nationwide policy fully settles whether a service is covered, a MAC may publish a Local Coverage Determination (LCD) that explains, for its jurisdiction, the circumstances under which the contractor considers a specific item or service to be reasonable and necessary. LCDs are limited to that determination of medical necessity; they do not, on their own, set payment amounts or dictate how to complete a claim.
Because LCDs are issued by individual MACs, the applicable policy generally depends on the geographic area where the service is furnished, so coverage guidance for the same service can differ from one contractor's jurisdiction to another. CMS maintains a public Medicare Coverage Database where LCDs and related materials are posted. Many LCDs are accompanied by separate billing and coding articles that describe supporting documentation expectations and reference the relevant code sets, which are maintained by their respective standards organizations rather than defined within the LCD itself.
LCDs sit within a broader coverage framework and follow a defined process for development, public comment, and revision. The specific criteria, effective dates, and any documentation requirements are stated in each individual LCD, so the authoritative wording for any given service should be read directly from the current version in the CMS Medicare Coverage Database rather than assumed.
In practice
In day-to-day billing operations, staff typically check whether an LCD (and any associated billing and coding article) applies to a service in the jurisdiction where care was delivered, then confirm that the clinical documentation supports the medical-necessity criteria described in that policy. Because LCDs are jurisdiction-specific and are revised over time, the operative details are read from the current published version rather than memorized as fixed rules.
LCDs interact with, but are distinct from, nationwide coverage policy and from claim-level edits. When a national policy exists, it generally governs; an LCD addresses areas the national policy leaves to contractor discretion. The precise relationship, criteria, and effective dates for any specific service are stated in the applicable CMS materials, which are the authoritative source when questions arise.
Commonly confused with
- National Coverage Determination (NCD): An NCD is a nationwide Medicare coverage decision issued by CMS that applies across all jurisdictions, whereas an LCD is issued by an individual MAC and applies only within that contractor's geographic area. Where an NCD addresses a service, it generally controls; LCDs address matters left to contractor discretion.
- Medicare Administrative Contractor (MAC): A MAC is the regional contractor that processes Medicare fee-for-service claims and issues LCDs; the LCD is the coverage policy document, while the MAC is the organization that authors and applies it.
- Local Coverage Article (billing and coding article): Articles often accompany an LCD and provide supporting billing, coding, and documentation guidance, but the LCD itself is the reasonable-and-necessary coverage determination. The two are related but serve different functions.