What is Local Coverage Determination (LCD)

Local Coverage Determination (LCD) refers to the policy that governs the coverage and payment for a certain medical service or operation within a specified geographic region. LCDs are designed to help healthcare practitioners, suppliers, and beneficiaries determine if a specific service or item is medically essential and eligible for reimbursement.

Reasons for CMS concerns

• Absence of proper research
• Non-Compliance with ASP
• Misuse and Overuse
• Patient Safety
• Fraud detection in medical billing.

Absence of proper research

Skin substitute products refer to medical devices or materials used to replace or augment damaged skin. These products play a critical role in wound care, particularly for patients with burns, ulcers, or other skin injuries. These skin substitutes include bioengineered products, synthetic grafts, and human-derived tissues.

Aside from papers published by skin grafting manufacturers, treatments employing skin substitute products are not sufficiently researched or comprehended. Furthermore, there is limited evidence that demonstrates its ability to cure chronic wounds.

Non-compliance with ASP

The use and price of skin grafting materials have increased in recent years, resulting in significant costs to Medicare programs. OIG had discovered that manufacturers are not complying with the new Average Sales Price(ASP) for skin substitute products, and as a result, it demands significant reimbursement in Part B payments. CMS was unable to determine ASP-based payment amounts for 30 out of the 68 skin substitutes billing codes due to missing ASP data from manufacturers. Because these are not prescribed drugs, the CMS cannot regulate the pricing for these treatments unless the manufacturers submit the required ASP data.

We at Shoreline Healthcare Technologies have effective denial management techniques and pay close attention that all medical billing compliances are met as per the regulatory standards.

Fraud Detection in Medical Billing

The coding for skin substitutes is intricate, often requiring specialized knowledge. This complexity can present opportunities for unscrupulous billing practices.

• Billed units not coinciding with the verified size of the wound.
• Inappropriate use of the product
• Inability to establish the amount of grafting product needed or utilized.
• Documentation that does not support the linked skin replacement.
• Cloning documentation among patients.
• Lack of fully signed consent paperwork from the patient are the other areas of concern.