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What is a Coverage Policy?

National Coverage Determinations (NCD) and Local Coverage Determinations (LCD) are Medicare’s coverage policies that describe medical necessity for certain services.

Private payers publish their own coverage policies on their Web sites.

When services are denied due to medical necessity, no pre-authorization, failing to try less expensive or invasive treatments, this is a good indication there is a coverage policy.

What’s in a policy?

Example – Noridian’s Wound Care Policy

  • Medical necessity: Brief statement that all services must be medically necessary.
  • Coding: Describes who may perform the service (physicians, NPs, PAs, Clinical Nurse Specialists). Discusses incident to guidelines briefly.
  • Lists specific codes 97597, 97598, 97602, and states these codes can’t be used for only a dressing change.
  • States this about evaluation/re-evaluation: In general, other than an initial evaluation, the assessment of the wound is an integral part of all wound care service codes and, as such, these assessments are not separately billable. Initial wound assessments that are medically necessary may be reimbursable as a separately identifiable Evaluation and Management (E/M) service or, i.e., physical therapy evaluation CPT® 97001.
  • Discusses incident to services, services provided by therapists, E/M and modifier 25, and gives a citation to the Medicare Claims Processing Manual.
  • Further sections discuss whirlpool, debridement, unna boot application, high pressure dressings.
  • Lists sources.
  • Most policies also list covered indications (ICD-10-CM codes).

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Last revised November 23, 2021 - Betsy Nicoletti
Tags: Code sets and reimbursement

Wondering about the rules for HCC coding?

Wondering what the rules are for HCC coding, and where you can find them? This video answers your questions. The topic is important to medical practices because risk-adjusted diagnosis coding is part of Medicare Advantage contracts, many commercial contracts and Accountable Care Organizations (ACOs). Sign up for our monthly newsletter to download the whitepaper and watch the video.

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Our mission is to provide accurate, comprehensive, up-to-date coding information, allowing medical practices to increase revenue, decrease coding denials and reduce compliance risk. That's what coding knowledge can do.

In 1988, CodingIntel.com founder Betsy Nicoletti started a Medical Services Organization for a rural hospital, supporting physician practice. She has been a self-employed consultant since 1998. She estimates that in the last 20 years her audience members number over 28,400 at in person events and webinars. She has had 2,500 meetings with clinical providers and reviewed over 43,000 medical notes. She knows what questions need answers and developed this resource to answer those questions. For more about Betsy visit www.betsynicoletti.com.

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