What Are NCD and LCD in Medical Billing? A Complete 2025 Guide

Medical billing often feels like walking through a maze. Every step depends on rules, documentation, and codes—and if you take one wrong turn, claims get denied. Two of the most important signboards in this maze are NCDs (National Coverage Determinations) and LCDs (Local Coverage Determinations). If you’re in healthcare, billing, or coding, you’ve likely heard these terms but maybe wondered:

• What exactly do they mean?
• How do they affect CPT and ICD coding?
• What’s changing in 2025 reimbursement policies?

Why Should You Care About NCD and LCD in 2025?

Because these two directly decide whether Medicare will pay you or not. No matter how perfect your documentation or how medically necessary you think the procedure is, if it’s not covered under the right NCD or LCD policy, you’ll likely face denials.

Here’s the catch:

• NCDs apply across the entire country. They’re issued by CMS (Centers for Medicare & Medicaid Services).
• LCDs are regional. They’re decided by MACs (Medicare Administrative Contractors) who manage claims in specific states.

So if you’re billing in Texas vs. California, the rules may differ for the same service because of LCD variations.

What Exactly Is an NCD in Medical Billing?

An NCD (National Coverage Determination) is a uniform coverage rule set by CMS. It answers one critical question:

“Does Medicare cover this service nationwide, and under what conditions?”

For example:

• Screening colonoscopies are covered nationwide under specific ICD-10 diagnosis codes related to preventive screening.
• TMS (Transcranial Magnetic Stimulation) for depression had limited coverage earlier, but the NCD has expanded to include certain ICD-10 codes as evidence for efficacy grew.

Table: Example of an NCD in Practice (2025)

And What About LCD in Billing?

An LCD (Local Coverage Determination) is where MACs get the power. It defines specific conditions, frequency limits, and documentation requirements for services in their region.

For instance, while the NCD may say “Sleep studies are covered for obstructive sleep apnea,” the LCD in your state might limit how many times a sleep study can be performed per year or require specific documentation of failed home testing before lab studies are reimbursed.

Table: Example of an LCD Rule (2025)

How Do NCDs and LCDs Affect CPT and ICD Coding?

This is where coders need to be sharp. Both NCDs and LCDs link specific CPT codes (procedures) with ICD-10 codes (diagnoses) to justify medical necessity.

If you bill a CPT code without a supporting ICD-10 code listed in the NCD/LCD, the claim will be denied.

If you exceed utilization limits under an LCD, expect denials unless proper documentation and modifiers are applied.

Example:

• CPT 93000 (Electrocardiogram, complete) may only be covered for certain ICD-10 codes like I20.0 (unstable angina).
• If you bill it with Z00.00 (general health exam) in a region where the LCD excludes routine coverage, denial is almost guaranteed.

What’s New in 2025 for NCD and LCD Billing?

Here are some important updates you should be aware of:

1. Preventive Care Expansion

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

2. Behavioral Health Coverage Growth

• LCDs in multiple regions expanded coverage for tele-mental health visits with codes 90791, 90834, 90837.
• Rural regions received higher reimbursement rates (up to 5% more) to encourage access.

3. Chronic Care Management

• NCDs now recognize CPT 99490 (chronic care management) as fully reimbursable with lower documentation hurdles.
• Payment bumped by 3% in 2025.

Quick Tip for Billers and Coders in 2025

Always check both NCD and LCD policies before submitting claims. Think of NCDs as the federal law and LCDs as the state law. Both must be followed for successful reimbursement.

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

Understanding what NCD and LCD are is one thing, but the real challenge begins when you’re at your desk with patient charts, codes, and a looming claim submission deadline. This is where theory meets reality.

Step 1: Always Start with the CPT Code

When a provider performs a service, your coding journey begins with identifying the correct CPT or HCPCS code. This code represents what service was performed.

Example:

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

Now the question is: Will Medicare cover this service? That’s where NCDs and LCDs come in.

Step 2: Match CPT With ICD-10 Codes

Coverage is never just about the procedure—it’s about why the service was needed. That’s where ICD-10 codes come in.

• If the bone density scan (77080) is billed with M81.0 (age-related osteoporosis without fracture) → covered under NCD.
• If billed with Z00.00 (general medical exam) → denied, because there’s no medical necessity link.

Quick Coding Guideline:

Medicare and MACs publish lists of ICD-10 codes that are payable for each CPT under their NCD or LCD. Billers must ensure the diagnosis code chosen is on that list.

Step 3: Review LCD for Local Restrictions

Even if a service is nationally covered, your local MAC may place extra rules. This could include:

• Frequency limits (e.g., only one bone density scan every 2 years unless fracture risk documented).
• Documentation requirements (e.g., physician notes must mention postmenopausal status).
• Provider limitations (e.g., only specialists can bill certain services).

This means a claim that would be paid in Florida could be denied in California if LCD conditions aren’t met.

Step 4: Apply Modifiers When Needed

Modifiers are coding lifesavers when it comes to NCD and LCD compliance.

• Modifier 59 → Used to indicate a distinct service when LCD rules would otherwise deny it as “bundled.”
• Modifier KX → Tells Medicare that documentation exists to justify medical necessity beyond the LCD’s default rules.
• Modifier GA → Indicates the patient signed an ABN (Advance Beneficiary Notice) when coverage may be denied.

Example:

If a patient needs a second bone density scan in less than 2 years, the claim would normally be denied. But with Modifier KX and proper documentation of fracture risk, reimbursement may still be possible.

Step 5: Stay Updated With 2025 Reimbursement Rules

Medicare changes coverage rules frequently, and 2025 has brought some important reimbursement shifts:

Table: 2025 Reimbursement Updates Affecting NCD/LCD Billing

Takeaway: Small percentage increases may seem minor, but when multiplied across hundreds of claims, they significantly affect practice revenue.

Real-World Billing Example: Putting It All Together

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. Check NCD → Confirms bone density scans covered for osteoporosis.
2. Check LCD (Palmetto) → Only covered once every 24 months, unless fracture risk documented.
3. Provider note: Documented recurrent fractures.
4. Add Modifier KX to indicate 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 skipped checking the LCD or forgotten the modifier, the claim would likely have been denied.

Pro Tip for 2025

Don’t just code—document.

Most denials under NCD/LCD happen not because the service wasn’t covered, but because documentation was missing or mismatched. Always ensure physician notes clearly link the ICD-10 diagnosis with the medical necessity of the CPT service.

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

If you ask a medical biller or coder which services trip them up the most, the answer is almost always the same: labs, imaging, therapy, and preventive screenings. That’s because these areas have the strictest NCD and LCD policies.

Let’s break down the most frequently encountered ones and what you need to know in 2025.

1. Laboratory Tests – The King of LCD Denials

Laboratory testing is one of the most heavily regulated areas in billing. Every lab test has to meet specific criteria tied to medical necessity.

Example:

A physician orders a Vitamin D test.

CPT: 82306.

Covered only if the patient has certain conditions like E55.9 (Vitamin D deficiency, unspecified) or M81.0 (osteoporosis without fracture).

If billed with Z00.00 (routine check-up) → denial under LCD rules.

Table: Common Lab NCDs/LCDs in 2025

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

Imaging is another area where NCDs and LCDs come into play daily.

Example:

Low-dose CT for lung cancer screening.

CPT: 71271.

NCD states: Covered only for patients 50–77 years old, 20+ pack-year smoking history, and currently smoking or quit within past 15 years.

If any of these aren’t documented, claim = denial.

Table: Imaging Services in 2025

3. Therapy Services – LCDs Control Frequency

• Therapy services (physical, occupational, speech) are notorious for LCD restrictions.
• CPT: 97110 (therapeutic exercises).
• Most LCDs limit therapy sessions to 20 per year unless continued progress is documented.
• Modifier KX must be used when therapy exceeds the LCD cap, with supporting notes.

Example:

• Patient after a stroke (ICD-10: I63.9).
• Receives PT 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 a growing priority for Medicare, and NCDs reflect that. In 2025, coverage expanded for cancer screenings and vaccinations.

Table: Preventive NCD Highlights in 2025

5. Behavioral Health – LCDs Expanding Coverage

Behavioral and mental health services have been one of the biggest winners in 2025 LCD updates.

Examples:

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

Table: Behavioral Health LCD Expansion (2025)

Why These Common NCDs and LCDs Matter?

These are the services that bill the most—labs, imaging, therapy, preventive care, and behavioral health. And they’re also the services most frequently denied when LCD/NCD rules aren’t followed.

Billers’ Tip for 2025:

Create a quick reference chart in your office for the top 20 services you bill. Include CPTs, payable ICD-10s, and frequency limits from your MAC’s LCDs. This can prevent denials before they happen.

What Strategies Can Billers Use to Prevent Denials Under NCD and LCD Policies in 2025?

Even the most skilled coders face denials when NCD and LCD rules aren’t followed to the letter. But here’s the good news: most denials are preventable. The trick lies in combining coding accuracy with airtight documentation and smart workflow practices.

Let’s look at the best strategies to reduce denials and keep reimbursements flowing in 2025.

1. Build an NCD/LCD Cheat Sheet for Your Practice

Every specialty has a handful of services that get billed repeatedly. Instead of flipping through long CMS documents each time, create a cheat sheet with:

• CPT codes you bill most often.
• The corresponding payable ICD-10 codes.
• Frequency limits or documentation rules.

Example (Cardiology Cheat Sheet):

Keeping this handy means billers won’t waste time hunting for LCD/NCD details.

2. Use Advanced Beneficiary Notices (ABNs) Wisely

• If you know a service might be denied under an LCD, protect your practice by using an ABN (Advance Beneficiary Notice).
• Patient signs the ABN before the service.
• If Medicare denies the claim, the patient is responsible for payment—not your practice.
• Always append the modifier GA to show that an ABN was signed.

Pro Tip: ABNs should never be a surprise to patients. Train front desk staff to explain why certain services may not be covered.

3. Leverage Modifiers Correctly

Modifiers are the bridge between what was done and why it should be paid. In 2025, these are especially important under LCD rules:

• KX Modifier → Tells Medicare documentation exists to justify medical necessity beyond LCD limits.
• 59 Modifier → Used when two services are distinct and shouldn’t be bundled.
• GA Modifier → Indicates ABN signed.
• GY Modifier → For services not covered at all, alert Medicare to deny so supplemental insurance can process.

Example:

A patient exceeds the therapy cap of 20 visits. Without modifier KX and proof of progress → denial. With them → paid.

4. Documentation Is King

• Even if your codes are perfect, claims collapse without proper documentation. Providers must:
• Clearly state the medical necessity linking ICD-10 to CPT.
• Document frequency rules (e.g., “Repeat bone density scan in 18 months due to new fracture”).
• Sign and date notes—unsigned records are red flags for auditors.

2025 Trend: MACs have increased pre-payment audits for high-volume services like lab panels and imaging. This means documentation quality is more important than ever.

5. Stay Ahead With Technology

Don’t fight the NCD/LCD maze alone. Use billing software or clearinghouses that:

• Flag mismatched CPT/ICD-10 pairs.
• Alert when frequency limits are exceeded.
• Update NCD/LCD policies automatically in 2025.

Tip: If your software doesn’t alert you, set up your own denial log. Every time a claim is denied for NCD/LCD reasons, record it. Over time, you’ll see patterns and can adjust workflows.

6. Track 2025 Reimbursement Trends

Denials aren’t just about rules—they’re about lost revenue. With reimbursement rates changing in 2025, you need to know what’s at stake.

Table: Denial vs Payment Impact (2025 Example)

Imagine 10 Vitamin D tests denied → That’s $420 lost instantly. Multiply that across the year, and noncompliance can cost thousands.

7. Train Your Team Regularly

• LCDs vary by region, and NCDs update annually. A biller who doesn’t stay updated is a biller who faces denials.
• Hold monthly training sessions to review top denials.
• Share real examples of denied claims and how to fix them.
• Encourage coders to check CMS and MAC websites for new updates.

Quick Checklist for Denial Prevention in 2025

• Check NCDs for national coverage rules.
• Verify LCDs for local restrictions.
• Match CPT with payable ICD-10 codes.
• Watch frequency and documentation requirements.
• Use modifiers (KX, GA, 59) where appropriate.
• Have patients sign ABNs if needed.
• Keep software updated with 2025 reimbursement changes.

FAQs and Final Thoughts: Making NCD and LCD Work for You in 2025

By now, you’ve seen how NCDs and LCDs aren’t just Medicare’s fine print—they’re the backbone of whether your claims get paid. Billers and coders who understand these rules don’t just prevent denials; they become the financial guardians of their practice.

Let’s close by answering some of the most common questions and sharing a few final tips for 2025.

Frequently Asked Questions

1. What is the main difference between an NCD and an LCD?

• NCD (National Coverage Determination): A rule set by CMS that applies nationwide.
• LCD (Local Coverage Determination): A rule set by your local MAC, which may add extra conditions, limits, or documentation requirements.

Think of NCDs as the federal law and LCDs as the state law. Both matter.

2. How do I know if a claim denial is due to NCD or LCD issues?

Check the Explanation of Benefits (EOB). Denials will often reference “medical necessity not met” or “non-covered service under LCD/NCD.” Cross-check with your MAC’s LCD database and CMS’s NCD policies.

3. What happens if my patient’s diagnosis code isn’t listed in the NCD/LCD?

• If it’s truly not covered → Use an ABN (Advance Beneficiary Notice) so the patient is aware and responsible for costs.
• If coverage is possible with more detail, → Ask the provider to document a more specific ICD-10 code that justifies medical necessity.

4. Can LCDs vary between states?

Yes! That’s one of the most frustrating parts. For example, a sleep study covered twice a year in one region may be limited to once a year in another. Always check your MAC’s LCDs.

5. What are the reimbursement changes for 2025 I should watch closely?

Here are some highlights:

The takeaway? Reimbursements are trending upward for preventive care and chronic care services, but denials are also increasing if NCD/LCD compliance isn’t followed.

Practical Tips to Master NCD and LCD in 2025

• Stay Organized: Keep a binder (or digital folder) with updated NCD and LCD policies for your specialty.
• Audit Yourself: Once a month, pull 10 random claims and check them against current NCD/LCD rules. Spot errors before Medicare does.
• Communicate With Providers: Coders aren’t mind-readers. If a note doesn’t justify medical necessity, send it back for clarification.
• Leverage Technology: Use billing software that flags mismatches between CPT and ICD-10 codes based on NCD/LCD databases.
• Don’t Forget Commercial Insurers: Many private insurers adopt Medicare’s NCD/LCD policies. Mastering these rules benefits you beyond Medicare claims.

The Human Side of NCD and LCD

• At first glance, NCDs and LCDs feel like cold, bureaucratic documents. But here’s another way to look at them: They’re designed to ensure patients only receive medically necessary, evidence-based care.
• When you prevent a denied claim, you’re not just saving your practice money—you’re saving patients from surprise bills.
• When you follow LCD rules for therapy sessions, you’re ensuring resources go to patients who are truly improving.
• When you apply the right preventive codes under NCDs, you’re helping patients get access to screenings that could save their lives.
• Billing may seem like numbers and codes, but at its core, it’s about people.

Final Thoughts

So, what are NCDs and LCDs in medical billing? They’re not just policies—they’re the invisible guardrails that keep the healthcare reimbursement system on track.

• NCDs tell us what’s covered nationwide.
• LCDs fine-tune those rules at the local level.
• Together, they decide whether a claim gets paid or denied.

In 2025, with reimbursement shifts favoring preventive and chronic care, following these rules isn’t optional—it’s the key to thriving.

• Master NCD and LCD policies.
• Train your team.
• Use smart documentation and coding strategies.
• And always remember: every clean claim keeps your practice healthier, your patients happier, and your bottom line stronger.

Closing Note

Medical billing will never be simple, but with the right knowledge and a proactive approach, you can turn NCD and LCD compliance from a headache into a strength. The practices that succeed in 2025 will be the ones that see NCDs and LCDs not as obstacles—but as opportunities to get paid right, the first time. In order to get detailed and updated information about medical coding and billing, go through other articles on the website, and don’t forget to ring “Medstar Billing Services” to get a hundred percent accurate reimbursement for your services.