LCD vs NCD in Medical Billing: What Dermatology Practices Need to Know in 2026

Medicare decides what it will pay for through two different kinds of coverage policy. A Local Coverage Determination comes from a regional Medicare Administrative Contractor (MAC) and only applies within that contractor's own jurisdiction. A National Coverage Determination comes directly from CMS itself and applies the same way everywhere in the country (CMS). Understanding the difference between these two policy types is critical for dermatology billing because the wrong assumption about which rule applies can result in a claim denial.

What Is an LCD (Local Coverage Determination)?

CMS built the LCD system because deciding whether an item or service is "reasonable and necessary" under Section 1862(a)(1)(A) of the Social Security Act often depends on local clinical practice, not one national answer (CMS). So each regional MAC makes that call for its own jurisdiction, which is exactly why coverage rules can genuinely differ from one part of the country to another.

LCDs include specific covered ICD-10 codes, non-covered ICD-10 codes, documentation requirements, and frequency limits. This explains why a Mohs procedure billed in Arizona under Noridian may face different documentation requirements than the same procedure billed in Florida under First Coast.

Each LCD has an associated Local Coverage Article (LCA) that lists the actual code lists. The LCD itself describes the policy rationale and medical necessity criteria. The LCA translates that into billing instructions: which CPT codes are covered, which ICD-10 codes support medical necessity, and which modifiers or documentation elements are required.

What Is an NCD (National Coverage Determination)?

An NCD works the opposite way from an LCD: CMS itself decides the coverage question once, and every MAC in the country has to follow that same answer. There's no regional version of an NCD, if CMS has issued one, it's the rule in every state, full stop (CMS).

CMS typically issues an NCD for one of a few real reasons: a genuine safety question has come up, MACs across the country have started handling the same service inconsistently, or a clinical advance is significant enough that patients' access to it shouldn't depend on which state they live in. The evidence behind an NCD usually comes from real clinical trial data on safety and effectiveness, not just a MAC's own judgment (CMS).

An NCD binds every single MAC in the country, and it wins outright over any LCD that conflicts with it (CMS). There's no middle ground here. If an NCD says a service is covered, no LCD can exclude it. If an NCD excludes a service, no LCD can cover it.

Key Differences: Scope, Authority, and Geographic Application

Strip away the formal language and the real distinction comes down to two things: who decides, and how far that decision reaches. CMS decides an NCD once, and it reaches all fifty states and every MAC and Medicare Advantage plan without exception (CMS). An LCD only exists at all because CMS hasn't weighed in nationally, or has, but left real gaps for a MAC to fill, so a MAC fills that gap for its own jurisdiction only, spelling out under exactly what documented clinical circumstances it will treat an item or service as reasonable and necessary.

LCDs must be consistent with all statutes, rulings, regulations, and national coverage, payment and coding policies (CMS). This means LCDs operate in the gaps left by NCDs. They can add detail, specify documentation, and define local medical necessity standards, but they can't contradict a national rule.

MACs themselves are private contractors, not government agencies, CMS hires them regionally to actually process Medicare Part A and Part B fee-for-service claims. Since each one only covers its own defined multi-state territory, two MACs can land on genuinely different LCDs for the exact same service, as long as neither one crosses a binding NCD (CMS). For dermatology practices with multiple locations across MAC jurisdictions, this creates real operational complexity. A biologic prior authorization requirement in one state may not exist in another, even though both are billing Medicare.

How LCDs and NCDs Affect Dermatology Billing and Reimbursement

Every dermatology claim you submit is adjudicated against either an NCD or an LCD (or both). If your documentation doesn't match the policy in force on the date of service, the claim denies. Medicare contractor audits verify claims against the applicable LCD in force on the date of service.

LCDs are particularly relevant for dermatology because most dermatology procedures don't have NCDs. Mohs surgery, excisions, biopsies, patch testing, and intralesional injections are all governed by LCDs. That means the rules change depending on your MAC. A Noridian LCD may require specific pathology documentation for a destruction code that CGS does not.

Medicare Advantage plans typically incorporate the applicable LCD into the plan's medical-necessity framework, with variation by plan (CMS).

When an NCD does exist, it sets the floor or ceiling. The LCD can still add documentation requirements, prior authorization workflows, or frequency limits, as long as those additions don't contradict the NCD's coverage decision.

Where to Find Current LCDs and NCDs for Your MAC or Jurisdiction

Start with the CMS Medicare Coverage Database at cms.gov/medicare-coverage-database. You can search by CPT code, keyword, or contractor. Always filter by your MAC jurisdiction. If you're billing Noridian (Jurisdiction E or F), don't rely on a Novitas LCD from Jurisdiction L.

Each MAC also publishes its own LCD library on its website. Noridian, CGS, Novitas, First Coast, NGS, Palmetto, and WPS all maintain searchable LCD databases. Bookmark your MAC's site and check it quarterly. LCDs are revised, retired, and replaced regularly.

For NCDs, search the CMS NCD manual (Publication 100-03) or use the same Medicare Coverage Database. NCDs are less common than LCDs, but when they exist, they're the final word. If you're unsure whether an NCD applies to a service, search both the NCD manual and your MAC's LCD list. If you find both, the NCD controls.

Don't forget the Local Coverage Article (LCA). The LCD tells you the policy. The LCA tells you how to bill it. Both are required reading.

Real Examples: Dermatology Procedures Governed by LCDs

Mohs micrographic surgery is one of the most heavily scrutinized dermatology procedures, and it's governed entirely by LCDs. Each MAC publishes its own Mohs LCD, and the documentation requirements vary. Some MACs require a specific statement about tumor size, location, and histologic subtype. Others require a written treatment plan or a statement explaining why standard excision was not appropriate. If your operative note doesn't match your MAC's LCD, the claim denies or gets downcoded.

Biologics for psoriasis, atopic dermatitis, and hidradenitis suppurativa are another LCD-heavy area. While the FDA approves the drug, Medicare coverage is determined by LCD. Many MACs require prior authorization, step therapy, and specific ICD-10 codes. A biologic billed without prior authorization in a jurisdiction that requires it will deny, even if the drug is FDA-approved and medically appropriate.

Cosmetic exclusions are also LCD-driven. Medicare never covers cosmetic services, but the line between cosmetic and medical is defined by LCD. For example, an LCD may specify that botulinum toxin is covered for blepharospasm or hyperhidrosis but not for wrinkles. If your diagnosis code is cosmetic or ambiguous, the LCD will exclude it. This is where understanding cosmetic versus medical billing becomes essential.

Dermatopathology billing is also LCD-governed. The number of specimen units, the use of special stains, and the split between technical and professional components are all defined by MAC-specific LCDs. If you're billing 88305 with multiple units, your MAC's LCD will dictate how many units are reasonable for a given clinical scenario. For more on this, see our guide to dermatopathology billing.

What Happens When an LCD and NCD Conflict?

On the rare occasion an LCD and an NCD genuinely disagree, there's no ambiguity about which one wins, the NCD does, every time, with no exceptions a MAC can carve out. A MAC can't quietly use its own LCD to cover something CMS has already excluded nationally, and it can't exclude something CMS has already said must be covered (CMS).

An LCD's real job is to clarify an NCD or handle a coverage question the NCD never addressed, not to argue with it (CMS). Genuine conflicts are rare in practice, since MACs are required to keep their own LCDs aligned with whatever NCDs already exist. But when a conflict does arise (usually because an NCD was recently updated and the LCD hasn't been revised yet), the NCD wins.

If you encounter a situation where an LCD appears to contradict an NCD, document it carefully. You can appeal a denial based on NCD language, and the appeals process will recognize the NCD's superior authority. In some cases, beneficiaries have successfully challenged LCDs in federal court when the LCD was more restrictive than the corresponding NCD.

How to Stay Compliant and Avoid Denials Based on Coverage Determinations

First, know your MAC. If you don't know whether you're billing Noridian, CGS, Novitas, or another contractor, find out today. Your MAC determines which LCDs apply to your claims. Multi-location practices need to track this by site. A Nevada practice bills Noridian; a Delaware practice bills Novitas. The LCDs are different. For more on Nevada-specific rules, see our Nevada dermatology billing guide.

Second, build LCD compliance into your documentation templates. If your MAC's Mohs LCD requires a statement about why standard excision was inadequate, add that prompt to your operative note template. If your biologic LCD requires documentation of prior treatment failures, build that into your prior authorization workflow.

Third, verify coverage before the service is rendered. Eligibility verification should include a check for prior authorization requirements and LCD-specific coverage criteria. If a service requires prior auth under your MAC's LCD, submit the request before the appointment. For more on this, see our article on dermatology eligibility verification workflows.

Fourth, train your billing team to cross-reference LCDs during claim scrubbing. Before a claim is submitted, verify that the ICD-10 code is on the LCD's covered list, that the CPT code is not bundled or excluded, and that any required modifiers are appended. This is where claim scrubbing becomes a compliance tool, not just a clean-claim tool.

Fifth, monitor LCD updates. MACs revise LCDs throughout the year, often with 45 days' notice. Subscribe to your MAC's email alerts or check the LCD library monthly. If an LCD changes and you don't update your workflows, you'll start seeing denials within weeks.

Sixth, appeal LCD-based denials when the documentation supports coverage. Many LCD denials are overturned at reconsideration or redetermination because the documentation was present but not highlighted in the original claim. If your operative note supports medical necessity under the LCD but the claim denied, file a reconsideration with a cover letter citing the specific LCD section and the corresponding documentation. For more on this process, see our denial management services page.

Finally, consider whether your billing partner understands LCD nuances. In-house billing teams often struggle with LCD compliance because they don't have the bandwidth to track updates across multiple MACs or specialties. A dermatology-specific RCM partner will already have LCD libraries built into their scrubbing logic and will update workflows automatically when LCDs change. For a comparison, see our guide on in-house vs outsourced dermatology billing.

LCDs and NCDs are not optional reading. They are the rulebook. Every claim you submit is judged against them. If you don't know which rules apply to your practice, you're billing blind.

Frequently Asked Questions

What happens if an LCD and an NCD conflict?

NCDs always take precedence over LCDs because they are issued by CMS and are binding on all Medicare Administrative Contractors nationwide. If an NCD covers a service, no LCD can deny it, and if an NCD excludes a service, no LCD can approve it. LCDs can only add implementation details or address services not covered by an NCD.

Do I need to check LCDs if there's already an NCD for a service?

Yes, because even when an NCD establishes national coverage, the LCD may still specify documentation requirements, frequency limits, diagnosis code lists, or prior authorization procedures that apply in your MAC jurisdiction. The NCD sets the coverage decision, but the LCD often defines how to bill it correctly.

How often do LCDs change, and how can dermatology practices stay current?

LCDs are updated periodically by each MAC, and changes can occur multiple times per year depending on clinical evidence, coding updates, or policy revisions. Practices should subscribe to their MAC's email listserv, monitor the CMS Medicare Coverage Database regularly, and review quarterly updates from billing associations or consultants who track dermatology-specific LCDs.

Can a dermatology practice appeal a denial based on an LCD?

Yes, you can appeal any claim denial through the standard Medicare five-level appeals process, but if the denial is based on a valid LCD that was correctly applied, your appeal will likely be unsuccessful unless you can demonstrate the LCD was misapplied or that your documentation actually met the stated criteria. You cannot appeal the LCD policy itself through the claims appeal process.

Are Medicare Advantage plans required to follow LCDs and NCDs?

Medicare Advantage plans must follow NCDs as they are binding national policy, but they have more flexibility with LCDs. Many Medicare Advantage plans adopt the applicable MAC's LCDs as a baseline for medical necessity, but they can also establish their own coverage policies that may be more or less restrictive than the local LCD.

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

An NCD is issued directly by CMS and applies nationwide to every Medicare Administrative Contractor and Medicare Advantage plan (CMS), while an LCD is issued by a regional MAC and applies only within that contractor's jurisdiction. NCDs are binding everywhere; LCDs vary by region.

Can an LCD be more restrictive than an NCD?

No. An LCD exists to clarify an NCD or fill a gap it left unaddressed, never to override it (CMS). If an NCD already covers a service, no LCD gets to exclude it. If an LCD appears more restrictive than an NCD, the NCD controls and the LCD is invalid to the extent of the conflict.

How do I know which MAC jurisdiction my practice is in?

Your MAC jurisdiction is determined by the state where the service is rendered. You can look up your MAC on the CMS website or check your remittance advice (835 file), which lists the contractor that processed the claim. Multi-location practices may bill different MACs depending on the site of service.

Do Medicare Advantage plans follow LCDs and NCDs?

Medicare Advantage plans typically incorporate the applicable LCD into the plan's medical-necessity framework, with variation by plan (CMS). NCDs are binding on Medicare Advantage plans, but LCD adoption varies. Always verify coverage with the specific MA plan before assuming LCD rules apply.

Where can I find the most current LCDs for dermatology procedures?

Search the CMS Medicare Coverage Database or visit your MAC's website directly. Noridian, CGS, Novitas, and other MACs maintain searchable LCD libraries. Always filter by your jurisdiction and verify the effective date to ensure you're using the current version.

Sources

• CMS: Local Coverage Determinations and National Coverage Determinations
• CMS: Medicare Coverage Document Type Descriptions