Medicare relies on a highly decentralized local-contractor structure that emerged as a political compromise in 1965. Decisions regarding Medicare's coverage of new procedures and technologies are an important part of the program. A national coverage process exists, but Medicare's local contractors develop most coverage policies. Although an intense debate surrounds Medicare's local coverage process, there is little analysis to inform the discussion. To expand knowledge of local coverage policy, this paper traces its origins and evolution. I conclude that the focus on locus, framing the debate in terms of local versus national, obscures fundamental policy issues of access, equity, and quality in Medicare.
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