Retired LCDs Pose a New Problem for Clinical Laboratories

The retirement of a LCD is considered by many to be a blessing rather than a problem because while a LCD is active, claims denials are automatic if the requirements of the LCD are not met. This forces the provider to obtain an advance beneficiary notice (ABN). Further, laboratories must maintain a database of LCD edits and update them when LCDs change or new ones are issued. Many think this all goes away when a LCD is retired. Think again!

 Because LCDs require a large commitment of a contractor’s resources to meet Medicare requirements, many contractors still require providers to use retired LCDs as a guide to the medical necessity criteria on which the LCD was created and allow ICD-9 based on the guidance of the old LCD. Further, contractors believe retired LCDs should still be adhered to in case a laboratory or provider becomes subject to post-payment recoupment even up to several years later. This is especially important considering the introduction of the RAC audits that will be implements to all states over the next few years.

 Laboratory LCD retirements are particularly troubling for laboratories because physicians tend to think of them as the lab’s problem, not a medical necessity issue. Additionally, when the LCD becomes retired, the lab can no longer require an ABN based on the LCD guidance. This places the lab between a rock and a hard place.

A best practice for laboratories in this situation would be to maintain the LCD edits in the laboratory system as a means to track and monitor the utilization of the affected tests, but not to delay or inhibit claims submissions. If the laboratory begins to see a trend of misuse or inappropriate coding for a particular test, it can use this information to seek reinstatement of the LCD or to create an audit trail for contractor review. Young, Christopher. Retired LCDs: A New Problem for Clinical Laboratories, Vol. 10, No. 5, September – October 2008, Journal of Health Care Compliance. This article can be viewed in print at page 59 or electronically via the Internet Research Network on the CCH Health Care Compliance tab/Health Care Compliance Portfolio/Journal of Health Care Compliance /September - October 2008.

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