Post-Acute Care/Long Term Care

Outpatient Therapy

Acute Hospital

Local Coverage Determinations (LCDs)

What is a Medicare LCD? Why is it Important?

The American Occupational Therapy Association (AOTA) Regulatory Affairs department works diligently to protect Medicare coverage and payment for occupational therapy services in all settings. Under the Medicare Program, Medicare contracts with regional corporate entities that process and pay claims for services provided in their regions. These entities are called Medicare Administrative Contractors (MACs) and also have the authority to develop medical coverage policies, usually based on discipline (e.g., occupational therapy, physical therapy) or by type of service (e.g., dysphagia services, wound care services).

The medical coverage policies that MACs develop are referred to as LCDs, which are coverage and payment policies used at the regional level throughout the country to interpret national Medicare policy issued by the responsible federal agency, Centers for Medicare & Medicaid Services (CMS).  LCDs undergo periodic review and revision by local Medicare contractors. During these periods of review, LCDs are open for public comment and challenge.

The following resources provide detailed guidance about LCDs, including how to identify your contractor’s occupational therapy LCD, appeal Medicare coverage denials, and change inaccurate LCDs.

Fraud and Abuse/Compliance 

AOTA encourages occupational therapy practitioners to remain vigilant of Medicare and Medicaid program fraud and abuse violations, and to not take the possibility of an infraction lightly. The abundance of recent news relating to settings where occupational therapy practitioners are employed reminds us that therapy services may be vulnerable to fraud and abuse. The Department of Justice activities should serve as a constant reminder to keep up with compliant and ethical practice standards.

Home health practitioners are urged to visit the June Office of the Inspector General Briefing, which focuses on a Nationwide Analysis of Common Characteristics in OIG Home Health Fraud Cases.