CMS Medicare Coverage Determination Review — LCD and NCD Challenges

Medicare pays for medical treatments and services only when they meet coverage determinations — official rulings by CMS or its contractors on whether a service is medically reasonable and necessary. There are two types: National Coverage Determinations (NCDs), issued by CMS and binding nationwide; and Local Coverage Determinations (LCDs), issued by Medicare Administrative Contractors (MACs) and binding within a geographic jurisdiction. These determinations control whether Medicare will pay for specific diagnoses, procedures, devices, and drugs. 42 CFR Part 426 establishes the formal process by which affected parties — physicians, suppliers, and patient organizations — can challenge an LCD or NCD they believe is legally invalid or inconsistently applied.

Current Rule (2026)

What This Rule Does

42 CFR Part 426 creates an administrative judicial process for challenging Medicare coverage determinations before a specialized Administrative Law Judge (ALJ) at the Departmental Appeals Board (DAB). Before this rule, there was no formal mechanism to challenge an LCD or NCD directly — a provider or patient had to deny a claim and appeal through the standard claims adjudication process, which meant waiting for a denial before seeking review. Part 426 allows prospective challenge: an aggrieved party can challenge a coverage determination before submitting claims, and the ALJ can declare the determination invalid if it is unreasonable.

The rule addresses the two types of coverage determinations separately: Subpart C governs LCD review; Subpart D governs NCD review. The core standards and ALJ procedures are similar, but standing, filing requirements, and remedy authority differ.

Key Provisions

Standing — who may challenge (§ 426.320):

• Any aggrieved party may file a complaint to challenge an LCD
• "Aggrieved party" means: a Medicare beneficiary who is entitled to Medicare benefits and is currently affected by the LCD; a supplier who has filed or intends to file claims under the LCD; or a physician or other practitioner who provides services subject to the LCD
• Organizations representing Medicare beneficiaries may petition for LCD review on behalf of their members if they demonstrate the members are aggrieved

What triggers review — acceptable complaints (§ 426.400):

• The complaint must: identify the specific LCD at issue by MAC jurisdiction and determination number; explain how the complainant is aggrieved; and articulate why the LCD is not reasonable
• "Not reasonable" means the LCD contradicts Medicare statute, implementing regulations, or is not supported by the applicable standard of medical evidence in the peer-reviewed medical literature
• A complaint that merely disagrees with the policy outcome without identifying a legal or evidentiary deficiency is not acceptable

Standard of review (§ 426.431):

• The ALJ applies a "reasonableness" standard — the LCD is invalid only if it is not reasonable in light of the applicable statute, regulations, and the medical evidence
• The ALJ does not substitute his or her own judgment for the MAC's on close medical questions — the question is whether the MAC's determination was within the range of reasonable policy choices
• The burden of proof is on the challenging party (§ 426.330): the complainant must demonstrate that the LCD is unreasonable, not merely that reasonable people could disagree

ALJ procedures (§§ 426.410–426.465):

• Upon accepting a complaint, the ALJ must issue a decision within 90 days
• The MAC (the LCD's issuer) is always a party to the proceeding and may defend its determination
• Proceedings are on the record — no live witnesses unless the ALJ orders testimony
• The ALJ may declare the LCD invalid in whole or in part, require the MAC to revise the determination, or uphold it
• ALJ decisions are binding on the MAC within its jurisdiction but do not automatically affect other MACs' similar LCDs

Board appeal (§ 426.465):

• Either party may appeal the ALJ's decision to the CMS Departmental Appeals Board (DAB) Medicare Operations Division
• The Board reviews ALJ decisions for legal error; factual findings are given deference

NCD review (Subpart D — §§ 426.500–426.587):

• NCD review is more limited — the statute (42 U.S.C. § 1395hh) gives CMS broad discretion in setting NCDs
• An aggrieved party may challenge an NCD as exceeding CMS's statutory authority or as procedurally defective (issued without required notice-and-comment)
• The ALJ may not overrule a substantive NCD on "reasonableness" grounds alone — the standard for NCD invalidity is higher than for LCDs
• If the ALJ finds an NCD invalid, the matter is referred to CMS for reconsideration rather than the ALJ directing the remedy

How It Affects You

If you are a physician, supplier, or device manufacturer affected by an LCD: An LCD that denies coverage for your services or products directly affects your patients' access and your reimbursement. Part 426 gives you standing to challenge the LCD without first having to submit and wait for a denied claim — you can file a prospective complaint. The core question to ask before filing: can you point to peer-reviewed medical literature that the MAC's determination failed to consider, misinterpreted, or that supports coverage? A complaint based on "we think coverage is good policy" will not succeed; a complaint that identifies specific clinical evidence the MAC overlooked or misread has a pathway. Engage a health care attorney familiar with Medicare coverage law before filing — the 90-day ALJ clock runs from complaint acceptance, but getting to acceptance requires a legally sufficient complaint.

If you are a Medicare beneficiary or a patient advocacy organization: LCD challenges can be pursued by beneficiary organizations on behalf of their members, provided the members meet the aggrieved party standard. This is the mechanism by which disease advocacy groups (for rare diseases, oncology, neurology) have challenged MACs' restrictive LCDs for emerging therapies. A successful LCD challenge can open coverage in that MAC's jurisdiction — which may then prompt other MACs to review similar determinations or CMS to initiate an NCD process.

If you are a Medicare Administrative Contractor (MAC): You are always a party when your LCD is challenged. You must produce the administrative record, including the evidence base you used to develop the LCD and the comment record if the LCD was publicly posted. A finding of invalidity requires you to revise or retire the LCD — and the DAB decision is published, creating precedent that other challengers will cite against similar LCDs you or other MACs have issued.

Statutory Authority

This rule implements:

• 42 U.S.C. § 1395ff — Medicare appeal rights: authorizes administrative and judicial review of coverage and payment decisions, including coverage determinations; the statutory basis for the ALJ review program
• 42 U.S.C. § 1395hh — Medicare coverage determinations: authorizes the Secretary to make national coverage determinations; establishes that NCDs are subject to notice-and-comment if they impose requirements on providers; creates the legal framework that distinguishes NCD authority from LCD authority
• 42 U.S.C. § 1302 — Secretary's regulatory authority: authorizes HHS to prescribe regulations necessary to carry out Medicare and Medicaid programs

Recent Rulemakings

• 85 FR 72909 (November 2020): CMS expanded standing for beneficiary organizations to file LCD challenges, allowing patient advocacy groups to petition on behalf of members who are aggrieved by coverage restrictions — a significant expansion from the prior rule that limited challenges to individual beneficiaries and suppliers. The rule also clarified the acceptable complaint standard and the ALJ's authority to order interim coverage relief in limited circumstances.
• The core Part 426 framework was established in 2003 (68 FR 63692), implementing the LCD/NCD review authority created by the Medicare Modernization Act (MMA, Pub. L. 108-173).

Recent Developments

• GLP-1 and obesity drug LCD battles: Local Coverage Determinations for glucagon-like peptide-1 (GLP-1) receptor agonists (semaglutide/Ozempic, tirzepatide/Mounjaro) in obesity treatment have been among the most contested LCD challenges in recent years. Medicare Part D covers these drugs for type 2 diabetes; coverage for obesity alone requires Congressional action (the Treat and Reduce Obesity Act has been repeatedly introduced but not enacted). MACs have issued LCDs with varying restrictions on off-label uses, driving beneficiary and physician challenges under Part 426.
• Alzheimer's treatment NCD — Lecanemab and donanemab: CMS issued a National Coverage Determination for anti-amyloid monoclonal antibodies (lecanemab/Leqembi, donanemab/Kisunla) in 2023–2024, initially limiting coverage to patients enrolled in clinical trials, then expanding coverage conditions after FDA granted traditional approval. The NCD process for these high-cost drugs generated significant public comment and served as a test of CMS's coverage-with-evidence-development (CED) framework for novel therapies.
• COVID-19 test coverage determinations: During and after the COVID-19 public health emergency, CMS issued multiple NCDs and LCDs addressing laboratory testing coverage — including expanded coverage for diagnostic testing, coverage of at-home tests during the PHE, and post-PHE coverage transitions. These rapid-cycle coverage determinations strained traditional LCD/NCD timelines and prompted discussions about the Part 426 framework's suitability for public health emergencies.
• Beneficiary organization standing expansion: The 2020 rule (85 FR 72909) permitting beneficiary organizations to file LCD challenges has generated an increase in challenges filed by patient advocacy groups. Organizations representing cancer patients, rare disease communities, and chronic disease advocacy groups have used the expanded standing to contest coverage restrictions that previously would have required individual beneficiary petitions.
• Prior authorization expansion: CMS has expanded Medicare Advantage prior authorization requirements, which operate outside the Part 426 LCD/NCD framework but function as de facto coverage restrictions. OIG and Congressional investigations into MA prior authorization denial rates have prompted CMS to issue new prior authorization standards and transparency reporting requirements, creating parallel coverage oversight tracks to the formal LCD challenge process.
• DOGE/OBBBA Medicare cuts and coverage review pace (2025): The Trump administration's budget proposals and the One Big Beautiful Bill Act (OBBBA) reconciliation bill include significant Medicare Advantage and fee-for-service spending reductions. CMS under Trump has paused or slowed some Biden-era coverage expansions pending budget reconciliation. DOGE-driven CMS workforce reductions have slowed Part 426 LCD/NCD review timelines, with MAC contractors reporting longer adjudication periods for new coverage requests. Beneficiaries and providers should expect delays in new coverage approvals for novel therapies during the transition period.
• GLP-1 Medicare coverage — no change yet (2025): Despite bipartisan congressional interest in covering GLP-1 drugs (semaglutide, tirzepatide) for obesity under Medicare Part D, no legislation has been enacted as of April 2026. The OBBBA's cost-cutting focus makes near-term Medicare GLP-1 obesity coverage expansion less likely, not more. CMS has not issued new NCDs expanding GLP-1 coverage beyond existing Part D type 2 diabetes coverage. The annual per-beneficiary cost of GLP-1 coverage for the full Medicare obesity population — estimated at $10,000+/year per person — makes it one of the largest potential Medicare expenditure increases in the program's history.

Pending Action

The Treat and Reduce Obesity Act (TROA) — which would require Medicare Part D to cover GLP-1 drugs for obesity treatment, not just type 2 diabetes — has been reintroduced in the 119th Congress and remains the key legislative vehicle that would create the largest near-term shift in Medicare coverage determinations. If enacted, CMS would need to issue NCDs or guidance interpreting TROA's coverage parameters, potentially generating significant LCD and NCD activity. Separately, CMS is reviewing whether existing coverage-with-evidence-development (CED) requirements for Alzheimer's anti-amyloid drugs adequately balance evidence generation against patient access — watch for NCD revision proceedings as more real-world outcome data accumulates.