In Report OEI-01-11-00500 entitled “Local Coverage Determinations Create Inconsistency in Medicare Coverage” (January 2014), the Department of Health and Human Services’ Office of Inspector General (“OIG”) explained that it had reviewed Medicare Administrative Contractor (“MAC”) Local Coverage Determinations (“LCDs”). MACs have the authority to issue LCDs limiting coverage for a particular item or service, which LCDs are effective only in the issuing MAC’s jurisdiction.  The OIG reviewed various LCDs and found that in October 2011, over half of Medicare Part B procedure codes were subject to an LCD in one or more states.  The presence of these LCDs was unrelated to the cost and utilization of items and services.  These LCDs limited coverage for items and services differently across states and defined similar clinical topics inconsistently.  The OIG concluded that while the Centers for Medicare & Medicaid Services has taken steps to increase consistency among LCDs, the agency lacks a plan to evaluate new LCDs for national coverage as mandated by Congress in the Medicare Modernization Act.

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