If you’ve ever had a chart denied after flawless surveys, you’re not alone.
You may have done everything “right.” You checked eligibility. You documented well. The chart was even reviewed at your state or accreditation survey and passed with flying colors.
Then you submit a claim—and get hit with an ADR.
Your Additional Documentation Request is reviewed. And suddenly, Medicare denies the payment. The frustration is real. The confusion is worse.
You’re not the only agency facing this.
At the Home Health Consultant, we support Medicare-certified agencies like yours every day. This article will help you understand the one thing that can dramatically improve your ADR outcomes: Local Coverage Determinations (LCDs).
What Is an LCD?
LCD stands for Local Coverage Determination. It’s a policy created by your Medicare Administrative Contractor (MAC). MACs help interpret Medicare rules and decide what’s reimbursable in specific clinical cases.
Why do we need LCDs? Because general Medicare rules are vague and patient care is highly individualized. LCDs help bridge that gap.
Here’s what they provide:
- Real-world clinical interpretation of Medicare regulations
- Guidance on documentation for specific diagnoses and treatments
- Expectations for how to justify services medically and functionally
Each MAC creates its own LCDs. That’s why they’re “local,” not national.
Why You Can’t Rely on Survey Standards Alone
You might think if you pass a survey, your charts are automatically fine. You may assume there’s no risk of receiving an ADR. Or a chart will pass one review if it passed the other. But this is not the case. Surveys and billing follow different rules.
Surveyors check whether your agency meets Medicare Conditions of Participation (CoPs). These are procedural, meaning they’re focused on policy and process.
Payment reviewers, aka the people who send you ADRs, look at billing qualifications. These determine if the patient meets Medicare’s conditions for reimbursement.
This is why you can have:
- A zero-deficiency survey
- A perfectly organized chart
- A complete plan of care
…and still receive a denial
Without LCD alignment, your cleanest chart could cost you thousands.
What Is an ADR?
You can think of an Additional Documentation Request (ADR) as Medicare asking for context.
This can happen in two ways:
- Pre-payment review: You get flagged before getting paid
- Post-payment review: You get flagged after payment
When that happens, a reviewer looks at your submitted claim, OASIS or HIS data, and the patient’s medical record. They check whether your documentation aligns with payment rules, not survey rules.
You may receive an ADR due to:
- Random selection
- Suspicious billing patterns
- Data triggers from OASIS or HIS
- Past complaint surveys
Often, you won’t know the reason. It can feel random. But that’s the system.
Why ADR Denials Hurt So Much
When Medicare denies a chart, you don’t just lose revenue. You lose everything tied to that case, including:
- Staff hours already paid
- Medical supply costs
- Transportation and mileage
- Billing department time
- Any contracted therapy services
Worse still? Many agencies don’t realize what went wrong. They continue charting the same way—until more denials stack up.
This is where LCDs can come in to help. They give detailed expectations on:
- What conditions qualify
- What documentation proves it
- What scenarios don’t meet criteria—even if they seem urgent
If you’re looking to learn more about ADRs before diving into LCDs, check out our article below for a beginner-friendly overview.
How LCDs Help You Prevent ADRs
Use LCDs to understand what’s acceptable before charting. As with most compliance-related issues in this industry, prevention and proactiveness is your best defense.
LCDs help you:
- Select appropriate referrals
- Deliver compliant care
- Ensure every progress note supports eligibility
- Avoid pitfalls that lead to ADRs
By aligning your charting from day one, you stop problems before they start.
How Are LCDs Created?
LCDs are built from thousands of real-world experiences. MACs and third-party reviewers collect rejected ADR data. When a certain issue triggers rejections repeatedly, CMS may form a committee. That committee creates a new LCD to clarify expectations.
LCDs are based on:
- Claims data
- Review trends
- Gaps in provider understanding
- Known high-risk documentation areas
This means LCDs are not arbitrary. They reflect Medicare’s attempt to educate providers and reduce errors. But LCDs also reflect Medicare’s attempt to reduce confusion in how they enforce their own policies.
How to Start Using LCDs in Your Agency
Make LCD review a habit—especially for your clinical leadership team. Here’s a simple process to help get you started:
- Visit your MAC’s LCD page (e.g., Palmetto, NGS, CGS)
- Download LCDs for your most common deficiencies.
- Share summaries with field staff and office RNs.
- Review one new LCD each month.
- Audit charts using LCD criteria before billing.
We also recommend starting with eligibility LCDs. Most ADRs don’t fail due to treatment—they fail due to eligibility.
In home health, this usually means:
- Unclear homebound status
- Vague or inconsistent documentation
- No justification for skilled need
While most home health agencies may get eligibility right at start of care (SOC), the patient’s improvements over time can “unqualify” the patient. Thus, eligibility must be justified at every interaction, not just major milestones.
In hospice, this includes:
- Weak CTI (Certification of Terminal Illness)
- No evidence of decline
- Incomplete IDG notes
LCDs provide full explanations of what qualifies. They give multiple examples per condition. This is the kind of guidance you won’t get in the Conditions of Participation.
For example, the CoPs may simply say “document medical necessity.” While LCDs will tell you:
- What "medical necessity" looks like in charting
- What conditions require therapist versus nurse oversight
- What “homebound” looks like in borderline cases
These are the real-world clarifications you need. LCDs may be long—sometimes over 20 pages. But they’re one of the most useful documentation resources you have. And they’re straight from the horse’s mouth.
How LCDs Can Help You Protect Your Agency’s Future
The fact is most agencies will face ADRs. It’s a part of owning a home health or hospice agency that can feel unavoidable. But, this doesn’t mean you’re powerless. LCDs can help you get a better understanding of vague regulations so you can stay as prepared and knowledgeable as possible.
Start by downloading eligibility LCDs from your MAC. Train your DPCS and field staff to align with this guidance. By taking this first step, you’re better preparing your team for success.
At Home Health Consultant we help you build a framework to maintain education and compliance with Medicare regulations. If you’re ready to start running your agency proactively, check out our approach to compliance below, survey readiness.
*This article was written in consultation with Mariam Treystman.
*Disclaimer: The content provided in this article is not intended to be, nor should it be construed as, legal, financial, or professional advice. No consultant-client relationship is established by engaging with this content. You should seek the advice of a qualified attorney, financial advisor, or other professional regarding any legal or business matters. The consultant assumes no liability for any actions taken based on the information provided.
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