Current Procedural Terminology (CPT) codes are the standardized codes used in healthcare to describe medical, surgical and diagnostic services and procedures. Healthcare providers use CPT codes to report their services to payers like Medicare for reimbursement. Whether a CPT-coded service or procedure will be covered by Medicare based on the patient’s diagnosis (ICD-10 code), however, depends on National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs). If the diagnosis matches an approved ICD-10 code in the NCD or LCD, the procedure is covered. Insurance often denies coverage for a service if the CPT code and ICD-10 code are not on the approved list or deemed to be medically necessary.
National Coverage Determinations (NCD's)
The Centers for Medicare and Medicaid Services (CMS) develops National Coverage Determinations that apply nationwide and are binding for all Medicare contractors. NCDs describe the criteria and coverage limitations that apply to a particular service, device or procedure for payment purposes, and they generally help ensure that similar claims are covered in a consistent manner.
Local Coverage Determinations (LCD's)
Local Coverage Determinations, on the other hand, are decisions made by a local Medicare Administrative Contractor (MAC) on whether a service or item is deemed medically necessary, and the decisions only apply within the issuing MAC’s jurisdiction. LCDs provide coverage rules where no NCD exists, or when specific jurisdiction needs to be defined.
Local Coverage Articles (LCA's)
To assist providers with billing and coding guidelines or otherwise educate providers, MACs will publish Local Coverage Articles (LCAs). Often related to LCDs, these articles provide information on how to correctly report CPT/HCPCS procedure codes, diagnosis codes, and even modifiers. Similar to LCDs, LCAs only apply to the MAC that issued the article.
Example:
The following represents a straightforward example of the billing and coding for the removal of benign skin lesion(s). A diagnosis code of “irritated skin lesion” is considered insufficient to justify lesion removal. In other words, the reason for removal also needs to be coded. The article will show Group 1-3 diagnosis codes that would support billing a benign skin lesion removal.
- CPT Code: 17000 – Destruction of Premalignant Lesion, such as actinic keratosis, using any method (including laser surgery, electrosurgery, cryosurgery, chemosurgery, surgical curettement); first lesion.
- Example of approved ICD-10 Code:
- L57.0 Actinic Keratosis (found in Group 1)
- Under group 1, it states, “The ICD-10 codes listed below identify the lesion being treated and will, by themselves, be considered for payment.”
- The reason for the removal will determine if codes from Group 1-3 are also needed to support medical necessity. For example, B07.0 Plantar wart is under Group 2, and it states, “For the conditions below, a primary ICD-10 code and secondary ICD-10 code that represents a complication are required.” This indicates that if a provider sends a claim with only B07.0, the service will be denied. A primary code must be listed along with B07.0.
Understanding the relationship between CPT codes, ICD-10 codes, and the coverage policies defined by NCDs, LCDs, and LCAs is essential for ensuring that claims are processed and reimbursed appropriately. If you have any questions or need support with your billing and coding processes, we’re here to help. Please email coding@medicmgmt.com to set up a conversation.
Jessica Fernandez-Reed is a Coder II at Medic Management Group. MMG is a national provider of advisory and consulting competencies, transaction support services, and back office administrative support to independent and system owned physician practice groups.