National and Local Coverage Determinations (NCD & LCD) in Medical Billing: The Complete 2025 Guide

Medical billing frequently resembles navigating a complex maze. Each step relies on specific rules, documentation, and codes, and a single misstep can lead to claim denials. Two of the most significant indicators in this complex landscape are NCDs (National Coverage Determinations) and LCDs (Local Coverage Determinations). If you are involved in healthcare, billing, or coding, you have probably encountered these terms and may have pondered:

• What do they truly signify?
• How do they influence CPT and ICD coding?
• What changes are anticipated in reimbursement policies for 2025?

Why Should You Be Concerned About NCD and LCD in 2025?

These two factors directly determine whether Medicare will reimburse you. Regardless of how impeccable your documentation is or how medically necessary you believe the procedure to be, if it is not included under the appropriate NCD or LCD policy, you are likely to encounter denials.

Here’s the important detail:

• NCDs are applicable nationwide. They are issued by CMS (Centers for Medicare & Medicaid Services).
• LCDs are specific to regions. They are determined by MACs (Medicare Administrative Contractors) who oversee claims in particular states.

Thus, if you are billing in Texas compared to California, the regulations may vary for the same service due to differences in LCDs.

What Is an NCD in Medical Billing?

An NCD (National Coverage Determination) is a standardized coverage guideline established by CMS. It addresses one essential question:

“Is this service covered by Medicare on a national level, and under what circumstances?”

For instance:

• Screening colonoscopies are covered nationwide under certain ICD-10 diagnosis codes associated with preventive screening.
• TMS (Transcranial Magnetic Stimulation) for depression previously had limited coverage, but the NCD has broadened to encompass specific ICD-10 codes as evidence of its effectiveness has increased.

Table: Illustration of an NCD in Action (2025)

And What About LCD in Billing?

An LCD (Local Coverage Determination) is where MACs hold authority. It specifies particular conditions, frequency restrictions, and documentation prerequisites for services within its jurisdiction.

For example, while the NCD may state “Sleep studies are covered for obstructive sleep apnea,” the LCD in your state could restrict the number of sleep studies allowed annually or necessitate specific documentation of unsuccessful home testing before reimbursement for lab studies.

Table: Illustration of an LCD Regulation (2025)

How Do NCDs and LCDs Influence CPT and ICD Coding?

This is where coders must be vigilant. Both NCDs and LCDs connect specific CPT codes (procedures) with ICD-10 codes (diagnoses) to substantiate medical necessity.

If you submit a CPT code without a corresponding ICD-10 code included in the NCD/LCD, the claim will be rejected.

If you surpass utilization limits set by an LCD, anticipate denials unless appropriate documentation and modifiers are utilized.

Example:

• CPT 93000 (Electrocardiogram, complete) is only eligible for coverage under specific ICD-10 codes such as I20.0 (unstable angina).
• Billing it with Z00.00 (general health exam) in an area where the LCD does not provide routine coverage will likely result in a denial.

What are the updates for NCD and LCD billing in 2025?

Here are several key updates to note:

1.     Preventive Care Expansion

• Additionally, ICD-10 codes have been incorporated under NCDs for preventive screenings (colon, breast, lung cancer).
• Reimbursement rates for preventive services have risen by 2–4% in 2025.

2.     Behavioral Health Coverage Growth

• LCDs across various regions have broadened coverage for tele-mental health consultations using codes 90791, 90834, 90837.
• Rural areas have been allocated higher reimbursement rates (up to 5% more) to promote accessibility.

3.     Chronic Care Management

• NCDs now acknowledge CPT 99490 (chronic care management) as fully reimbursable with reduced documentation requirements.
• Payment has increased by 3% in 2025.

Quick Tip for Billers and Coders in 2025

Always verify both NCD and LCD policies before submitting claims. Consider NCDs as federal regulations and LCDs as state regulations. Compliance with both is essential for successful reimbursement.

How Do You Actually Use NCD and LCD in Daily Billing and Coding?

Grasping the concepts of NCD and LCD is one aspect, but the true challenge arises when you are at your desk with patient records, codes, and an impending claim submission deadline. This is where theoretical knowledge is put to the test.

Step 1: Always Start with the CPT Code

When a provider delivers a service, your coding process commences with identifying the appropriate CPT or HCPCS code.

Example:

A physician conducts a bone density scan. The CPT code is 77080.

The next question is: Will Medicare provide coverage for this service? This is where NCDs and LCDs become relevant.

Step 2: Align CPT With ICD-10 Codes

Coverage encompasses more than just the procedure; it also involves the rationale behind the necessity of the service.

• If the bone density scan (77080) is billed alongside M81.0 (age-related osteoporosis without fracture), it is covered under NCD.
• If billed with Z00.00 (general medical exam), it will be denied due to the absence of a medical necessity connection.

Quick Coding Guideline:

Medicare and MACs provide lists of ICD-10 codes that are eligible for payment for each CPT under their NCD or LCD. Billers must verify that the selected diagnosis code appears on that list.

Step 3: Examine LCD for Local Restrictions

Even if a service is covered at the national level, your local MAC may impose additional regulations. These may include:

• Frequency limitations (e.g., only one bone density scan permitted every 2 years unless fracture risk is documented).
• Documentation prerequisites (e.g., physician notes must reference postmenopausal status).
• Provider restrictions (e.g., only specialists are authorized to bill for certain services).

This implies that a claim approved in Florida could be rejected in California if the conditions of the LCD are not satisfied.

Step 4: Utilize Modifiers When Necessary

Modifiers serve as essential tools for ensuring compliance with NCD and LCD requirements.

• Modifier 59: Utilized to signify a distinct service when LCD regulations would otherwise classify it as bundled.
• Modifier KX: Informs Medicare that documentation is available to substantiate medical necessity beyond the standard rules of the LCD.
• Modifier GA: Signifies that the patient has signed an ABN (Advance Beneficiary Notice) when there is a possibility of coverage denial.

Example:

If a patient requires a second bone density scan within a period of less than 2 years, the claim would typically be denied. However, with the application of Modifier KX and appropriate documentation of fracture risk, reimbursement may still be achievable.

Step 5: Stay Informed About 2025 Reimbursement Regulations

Medicare frequently updates its coverage policies, and the year 2025 has introduced several significant changes in reimbursement:

Table: 2025 Reimbursement Modifications Impacting NCD/LCD Billing

Conclusion: While small percentage increases may appear insignificant, when applied to numerous claims, they can have a substantial impact on practice revenue.

Practical Billing Illustration: Integrating All Components

Case Study:

Patient: 68-year-old female with a history of fractures.

Service: Bone density scan.

CPT: 77080.

ICD-10: M80.00 (age-related osteoporosis with current pathological fracture).

Region: Palmetto GBA (Southeast).

Steps:

1. Verify NCD: Confirms coverage for bone density scans related to osteoporosis.
2. Verify LCD (Palmetto): Coverage is limited to once every 24 months, unless fracture risk is documented.
3. Provider note: Documented recurrent fractures.
4. Include Modifier KX to signify justification for medical necessity.
5. Claim submitted with CPT 77080 + ICD-10 M80.00 + Modifier KX.
6. Claim reimbursed at the 2025 rate of $101.

If the coder had neglected to check the LCD or omitted the modifier, the claim would likely have faced denial.

Expert Tip for 2025

Do not merely code; ensure thorough documentation.

Most denials under NCD/LCD occur not due to lack of coverage for the service, but rather because of absent or inconsistent documentation. Always make certain that the physician’s notes explicitly connect the ICD-10 diagnosis with the medical necessity of the CPT service.

What Are the Most Common NCDs and LCDs Billers Manage in 2025?

If you inquire with a medical biller or coder about which services pose the greatest challenges, the response is nearly always consistent: laboratories, imaging, therapy, and preventive screenings. This is because these sectors are governed by the most stringent NCD and LCD regulations.

Let us examine the most commonly encountered issues and what you should be aware of in 2025.

1.     Laboratory Tests: The Dominant Cause of LCD Denials

Laboratory testing ranks among the most stringently regulated domains in billing. Each lab test must satisfy specific criteria related to medical necessity.

Example:

A physician requests a Vitamin D test.

CPT: 82306.

Coverage is only applicable if the patient has particular conditions such as E55.9 (Vitamin D deficiency, unspecified) or M81.0 (osteoporosis without fracture).

If billed with Z00.00 (routine check-up), denial according to LCD regulations.

Table: Common Lab NCDs/LCDs in 2025

2.     Imaging Services: NCDs and LCDs: Clarifying “When” and “Why”

Imaging is yet another field where NCDs and LCDs are relevant daily.

Example:

Low-dose CT for lung cancer screening.

CPT: 71271.

NCD specifies: Covered solely for patients aged 50–77 years, with a smoking history of 20+ pack-years, and who are either current smokers or have quit within the last 15 years.

If any of these criteria are not documented, the claim will be denied.

Table: Imaging Services in 2025

3.     Therapy Services: LCDs Control Frequency

• Therapy services (physical, occupational, speech) are well-known for their LCD restrictions.
• CPT: 97110 (therapeutic exercises).
• The majority of LCDs restrict therapy sessions to 20 annually unless there is documented evidence of ongoing progress.
• Modifier KX is required when therapy surpasses the LCD limit, accompanied by supporting documentation.

Example:

• Patient following a stroke (ICD-10: I63.9).
• Receives physical therapy with 25 sessions in 2025.
• First 20 automatically covered.
• Sessions 21–25 covered only with modifier KX and documented functional improvement.

4.     Preventive Care Where NCDs Expanded in 2025

Preventive services are increasingly prioritized by Medicare, as reflected in the NCDs. In 2025, coverage for cancer screenings and vaccinations was expanded.

Table: Preventive NCD Highlights in 2025

5.     Behavioral Health LCDs Expanding Coverage

Behavioral and mental health services have seen significant benefits from the 2025 LCD updates.

Examples:

• Tele-mental health visits (CPT 90834, 90837): expanded to rural areas with an increase in reimbursement.
• Psychiatric diagnostic evaluation (CPT 90791): now broadly covered under LCDs with additional ICD-10 mental health codes included.

Table: Behavioral Health LCD Expansion (2025)

Why Do These Common NCDs and LCDs Hold Significance?

These services generate the highest billing amounts: laboratory tests, imaging, therapy, preventive care, and behavioral health. Additionally, they are the services that are most often denied when the rules of LCD/NCD are not adhered to.

Advice for Billers in 2025:

Develop a quick reference chart within your office for the top 20 services you bill. This should include CPT codes, payable ICD-10 codes, and frequency limits as outlined by your MAC’s LCDs. Such a chart can help avert denials before they occur.

What Approaches Can Billers Implement to Avert Denials Under NCD and LCD Regulations in 2025?

Even the most proficient coders encounter denials when the NCD and LCD regulations are not meticulously followed. However, there is positive news: the majority of denials can be avoided. The key is to merge coding precision with comprehensive documentation and effective workflow practices.

1.     Create an NCD/LCD Reference Guide for Your Practice

Each specialty has a select number of services that are billed frequently. Rather than sifting through extensive CMS documents each time, compile a reference guide that includes:

• The CPT codes you bill most frequently.
• The associated payable ICD-10 codes.
• Frequency limits or documentation requirements.

Example (Cardiology Reference Guide):

Having this readily available ensures that billers will not waste time searching for LCD/NCD information.

2.     Use Advanced Beneficiary Notices (ABNs) Judiciously

• If you anticipate that a service may be denied under a Local Coverage Determination (LCD), safeguard your practice by utilizing an ABN (Advance Beneficiary Notice).
• The patient must sign the ABN before receiving the service.
• Should Medicare reject the claim, the financial responsibility falls on the patient, not your practice.

Pro Tip: Patients should never be caught off guard by ABNs. Ensure that front desk personnel are trained to clarify why certain services may not be covered.

3.     Utilize Modifiers Appropriately

Modifiers serve as the connection between the services rendered and the justification for payment. In 2025, their significance under LCD regulations is heightened:

• KX Modifier: Indicates that documentation is available to substantiate medical necessity beyond the limits set by the LCD.
• 59 Modifier: Applied when two services are separate and should not be combined.
• GA Modifier: Signifies that an ABN has been signed.
• GY Modifier: Used for entirely non-covered services, prompting Medicare to deny so that supplemental insurance can take action.

4.     Documentation Is Paramount

• Even with flawless coding, claims will fail without adequate documentation. Providers are required to:
• Clearly articulate the medical necessity that connects ICD-10 codes to CPT codes.
• Document frequency guidelines (e.g., “Repeat bone density scan in 18 months due to new fracture”).
• Ensure notes are signed and dated—unsigned records raise red flags for auditors.

2025 Trend: Medicare Administrative Contractors (MACs) have intensified pre-payment audits for high-volume services such as lab panels and imaging.

5.     Stay Ahead With Technology

Don’t navigate the NCD/LCD complexities by yourself. Utilize billing software or clearinghouses that:

• Identify mismatched CPT/ICD-10 combinations.
• Notify when frequency limits are surpassed.
• Automatically refresh NCD/LCD policies in 2025.

Tip: If your software fails to provide alerts, establish your own denial log. Each time a claim is rejected for NCD/LCD reasons, document it. Over time, you will identify trends and can modify workflows.

6.     Track 2025 Reimbursement Trends

Denials are not solely about regulations—they represent lost income. With reimbursement rates shifting in 2025, it is essential to understand what is at risk.

Table: Denial vs Payment Impact (2025 Example)

Consider 10 denied Vitamin D tests → That results in an immediate loss of $420. When calculated over the year, noncompliance can lead to significant financial losses.

7.     Train Your Team Regularly

• LCDs differ by region, and NCDs are updated each year. A biller who does not keep current is a biller who will encounter denials.
• Conduct monthly training sessions to discuss prevalent denials.
• Provide actual instances of denied claims and methods to resolve them.
• Motivate coders to consult CMS and MAC websites for the latest updates.

Quick Checklist for Denial Prevention in 2025

• Review NCDs for national coverage guidelines.
• Confirm LCDs for local limitations.
• Align CPT with payable ICD-10 codes.
• Monitor frequency and documentation prerequisites.
• Apply modifiers (KX, GA, 59) when suitable.
• Ensure patients sign ABNs if necessary.
• Maintain software updates reflecting 2025 reimbursement modifications.

FAQs and Concluding Remarks: Optimizing NCD and LCD for Your Benefit in 2025

By this point, it is clear that NCDs and LCDs are not merely the fine print of Medicare; they are essential to the approval of your claims. Billers and coders who grasp these regulations do more than avert denials; they serve as the financial protectors of their practice.

To conclude, we will address some of the frequently asked questions and provide a few final recommendations for 2025.

Frequently Asked Questions

Q1. What distinguishes an NCD from an LCD?

• NCD (National Coverage Determination): A regulation established by CMS that is applicable across the nation.
• LCD (Local Coverage Determination): A regulation formulated by your local MAC, which may impose additional conditions, restrictions, or documentation requirements.

Consider NCDs as akin to federal law and LCDs as comparable to state law. Both are significant.

Q2. How can I determine if a claim denial is related to NCD or LCD issues?

Review the Explanation of Benefits (EOB). Denials frequently cite “medical necessity not met” or “non-covered service under LCD/NCD.” Verify against your MAC’s LCD database and CMS’s NCD policies.

Q3. What should I do if my patient’s diagnosis code is not included in the NCD/LCD?

• If it is genuinely not covered, utilize an ABN (Advance Beneficiary Notice) to inform the patient that they are responsible for the costs.
• If coverage might be possible with additional details, request the provider to document a more specific ICD-10 code that substantiates medical necessity.

Q4. Can LCDs differ from one state to another?

Indeed! This is one of the most exasperating aspects. For instance, a sleep study that is covered twice a year in one area may be restricted to once a year in another. Always verify your MAC’s LCDs.

Q5. What reimbursement changes for 2025 should I monitor closely?

Here are some key points:

The conclusion is clear: Reimbursements for preventive and chronic care services are on the rise, yet denials are also increasing if compliance with NCD/LCD is not adhered to.

Practical Strategies for Mastering NCD and LCD in 2025

• Maintain Organization: Create a binder (or digital folder) containing the latest NCD and LCD policies relevant to your specialty.
• Conduct Self-Audits: Monthly, select 10 random claims and verify them against the current NCD/LCD regulations. Identify mistakes before Medicare does.
• Engage with Providers: Coders cannot read minds. If documentation does not substantiate medical necessity, return it for further clarification.
• Utilize Technology: Implement billing software that identifies discrepancies between CPT and ICD-10 codes according to NCD/LCD databases.
• Remember Commercial Insurers: Numerous private insurers adopt Medicare’s NCD/LCD policies. Mastering these regulations will benefit you beyond Medicare claims.

The Human Aspect of NCD and LCD

• However, consider this perspective: They are intended to guarantee that patients receive only medically necessary, evidence-based care.
• By preventing a denied claim, you are not only protecting your practice’s finances but also shielding patients from unexpected bills.
• Adhering to LCD guidelines for therapy sessions ensures that resources are allocated to patients who are genuinely making progress.
• By applying the appropriate preventive codes under NCDs, you facilitate patients’ access to screenings that could potentially save their lives.
• While billing may seem to revolve around numbers and codes, fundamentally, it is about people.

Final Thoughts

So, what exactly are NCDs and LCDs in the realm of medical billing? They are more than mere policies—they serve as the unseen guardrails that ensure the healthcare reimbursement system remains on course.

• NCDs inform us about what is covered on a national scale.
• LCDs refine those regulations at the Local level.
• Collectively, they determine whether a claim is approved or rejected.

In 2025, as reimbursement trends increasingly favor preventive and chronic care, adhering to these regulations is not optional; it is essential for success.

• Become proficient in NCD and LCD policies.
• Educate your team.
• Implement effective documentation and coding strategies.
• And always keep in mind: every clean claim contributes to a healthier practice, happier patients, and a more robust financial outcome.

Closing Note

Medical billing will always present challenges, but with the appropriate knowledge and a proactive mindset, you can transform NCD and LCD compliance from a burden into a competitive advantage. The practices that will thrive in 2025 will be those that view NCDs and LCDs not as barriers—but as chances to secure accurate payment on the first attempt. To obtain comprehensive and current information regarding medical coding and billing, explore additional articles on the website, and remember to contact MedEx MBS for guaranteed, accurate reimbursement for your services.