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How contractor advisory committees impact coverage decisions


Contractor advisory committee members function as a bridge to communication between providers and the Medicare contractor. They are a valuable resource in the many instances when clarification is required.



Contractor advisory committee members function as a bridge to communication between providers and the Medicare contractor. They are a valuable resource in the many instances when clarification is required.



coding.doc by L. Neal Freeman, MD, MBA

The elements of coding, coverage, and payment comprise the “reimbursement triad.” All of these elements must be in place before physicians can be reimbursed for their services.

Investigation of the coverage component highlights the role of the contractor advisory committee (CAC). The Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services-CMS) ordered the creation of this committee in 1992. Each individual state (except for some small states, which share one CAC) has its own committee. They have had a major impact on coverage for medical services, and it is important to understand their structure, purpose, and functioning.

Each medical society within a state is allowed representation on the CAC. Typically, one physician is appointed, and an alternate is also designated. Additionally, there is a beneficiary representative. Other groups (e.g., the state hospital organization) participate as well. Eye care is represented by ophthalmology and also by optometry. The committee is co-chaired by the contractor medical director (CMD) and by a member of the committee’s selection.

The CAC co-chairs may invite others to a particular meeting, such as congressional staff or staff from the regional office of CMS. Dissemination of information is an emphasis of the CAC.

The CAC has several purposes. The committee reviews all draft local coverage determinations (LCDs) and advises the Medicare contractor regarding preferred changes.


Local coverage determinations

LCDs are the replacement for local medical review policies. LCDs address coverage issues, and list acceptable criteria that support the medical necessity of a service. The LCD often contains both acceptable diagnoses and frequency guidelines. The contractor must establish guidelines that are reasonable and necessary.

The LCD only applies only to the specified geographic area (typically the state). LCDs on the same subject can vary significantly between states. LCDs from other jurisdictions are often reviewed when local drafts are prepared.

Suggested changes to the draft LCD are based upon committee members’ knowledge as well as input from providers in the state. The specialty expertise is crucial. It is unlikely that the ophthalmology advisor will have much to contribute on a proposal relevant to urology, for example.

There are certain LCDs that apply broadly across specialties, however. One example of this would be an LCD on non-covered services. In this situation, many committee members will probably provide input.

Committee members also point out conflicts that exist in contractor policies. A position regarding coverage for tissue adhesives, for example, might be an element of several different LCDs as well as reflected in a contractor policy on supplies. Also, the CAC member may bring deviation of a policy from the standard of community care to the floor.


An additional function of the CAC member is to share information from the CAC meeting with state and specialty societies. This information is often conveyed to the society in their newsletter to members.

Overall, the CAC members function as a bridge to communication between providers and the Medicare contractor. They are an extremely valuable resource in the many instances when clarification is required. Contractors view CAC members as their ears to the ground who keep coverage positions current and relevant to the real world.

The CAC meeting is not a forum to discuss specific providers and cases. However, questions from providers on a specific issue can often be answered via a CAC member’s communication pipeline to the contractor.

The CAC is advisory in nature. The final decision on LCDs rests with the CMD. Historically, CMDs have been highly responsive to the suggestions from the CAC.

Industry/medical device/pharmaceutical manufacturers are highly interested in the coverage process. Medicare contractors’ position on these becomes particularly crucial in cases where the manufacturer is seeking broad insurance coverage of a product. This is because many insurance companies follow Medicare’s lead regarding coverage guidelines.


The forum for manufacturers attempting to clarify/influence information on coverage is generally the open meeting held separately from the CAC meeting. Comments on draft LCDs are actively solicited. The venue for this meeting may be completely different than that of the CAC meeting. In Florida, the open meeting is currently held earlier during the week of the scheduled Saturday CAC meeting. Strict limitations may be placed on the length of presentations from individuals and from manufacturers.

The Carrier Advisory Committees around the country have no impact on development of national coverage determinations (NCDs) from Medicare. LCDs may not conflict from guidelines in an applicable NCD. The ability of industry/manufacturer groups to comment upon and influence LCDs has led some of these groups to favor the continued existence of the LCD process in favor of a shift to NCDs.

Maintain familiarity with the Carrier Advisory Committee and its functions. This will directly translate into a competitive advantage for you during your navigation through the Medicare minefield.



L. Neal Freeman, MD, MBA, FACS is president of CPR Analysts Inc. (www.cpranalysts.com). He advises physicians nationally on coding, reimbursement, and practice management. Dr. Freeman is a practicing ophthalmic plastic surgeon and a certified specialist in physician coding. Readers may contact him at nfreeman@cpranalysts.com or 321/253-2166.

CPT codes, descriptions, and other data only are copyright 2014 by the American Medical Association (AMA). All Rights Reserved (or such other date of publication of CPT). CPT is a trademark of the AMA. Although all efforts have been made to provide accurate information, readers should check with their specific payers for their policies and rules.






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