In oncology, drug therapies are often the costliest — and most complex — components of care. But beyond the clinical decision to administer a particular therapy, oncologists and their practice administrators must grapple with a web of policies that govern how, when, and where those drugs can be delivered.

From Local and National Coverage Determinations (LCDs/NCDs) to state-specific Medicaid rules, these policies can dictate everything from reimbursement eligibility to how a drug must be sourced.

Here’s why understanding drug policies is not optional — it’s essential.

The Power of LCDs and NCDs

Medicare uses Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) to define which drugs and services are reimbursable, under what conditions, and for which diagnoses.

An oncologist may choose to administer a specific chemotherapy based on clinical indication — but if it falls outside the LCD or NCD guideline for that diagnosis code, the claim will likely be denied. This applies even if the drug is FDA-approved.

Understanding your Medicare Administrative Contractor’s LCDs is critical. These policies often differ by region and may change annually. Practices must stay updated and ensure proper documentation aligns with coverage criteria.

Medicaid: A Policy Minefield

Medicaid policies vary from state to state, and each state’s formulary and prior authorization requirements can be different. Some states require preferred drug lists, impose step therapy, or mandate pharmacy benefit usage even for infused drugs.

If your practice serves dual-eligible (Medicare/Medicaid) patients, failing to understand the interplay between Part B and state Medicaid policies could lead to denied drug claims — and unrecoverable losses.

Commercial Payers and Carve-Out Rules

Many commercial plans have their own unique policies that determine if a drug must be obtained through a specialty pharmacy. Oncology drugs often fall under “carve-out” rules where providers are not allowed to use buy-and-bill, even if they have the infrastructure to do so.

Knowing which payers allow buy-and-bill and which mandate pharmacy fulfillment is crucial — not just to avoid denials, but to coordinate prior authorization, co-pay assistance, and delivery logistics.

The Risk of Non-Compliance

The consequences of overlooking payer policy can be severe. Administering a non-covered drug, even if clinically justified, may result in non-payment, compliance audits, and revenue loss. More importantly, it may create delays in patient care if re-authorization or appeals are needed.

Policies are not just paperwork — they are part of the clinical workflow.

The Bottom Line

Drug policy awareness is not just the responsibility of the billing department — it must be understood by providers, infusion coordinators, and administrators. A well-informed practice can make smarter decisions about which drug procurement model to use, avoid costly errors, and deliver better care.

At Confair, we guide oncology practices through the regulatory and payer landscape so you can focus on what you do best — treating patients. From LCD interpretation to Medicaid billing compliance, we ensure your team stays ahead of the curve.