The article previously ran in the Q4 2022 issue of A₂Zzz.

I have previously discussed the importance of referencing Medicare (MCR) provider compliance tips and looking for the latest tips for improper payment rates, denial reasons, coding, etc., in this column. I recently revisited their compliance tips related to polysomnography/sleep studies and there are no substantive new changes or tips posted for this service line. As a health care provider, you should understand Medicare coverage before providing services or items to Medicare patients. Because extensive coverage information is readily available, Medicare has made it known that they expect health care providers to know their coverage requirements in order to avoid payment denial.

HCPCS and CPT Codes for Testing

This Local Coverage Article (LCA): Billing and Coding – Polysomnography (A56995) provides the most current Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes, as well as International Classification of Diseases (ICD)-10 codes that support medical necessity.

Background

According to a U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) report from Jan. 1, 2014 through Dec. 31, 2015, Medicare Administrative Contractors (MACs) nationwide paid freestanding facilities, facilities affiliated with hospitals and physicians about $800 million for selected polysomnography services (a type of sleep study to diagnose and evaluate sleep disorders).

You must meet the provisions in your Local Coverage Determination (LCD): Polysomnography (L36593) in order to be paid for polysomnography services provided for Medicare patients. Be sure to verify you are referencing the LCD for your service area.

Denial Reasons

Earlier OIG reviews for polysomnography services found that MCR paid for services that did not meet their requirements. They identified payments for services with inappropriate diagnosis codes and/or without the required supporting documentation. Providers with patterns of questionable billing were also noted. As a result of their audit, the OIG estimated MCR overpaid $269 million for polysomnography services during this audit period. These errors occurred because polysomnography services oversight was insufficient to assure providers complied with stated requirements. 

Preventing Denials

MCR will cover polysomnography when services meet these criteria:

• Clinic is either affiliated with a hospital or is controlled by physicians. MCR may cover diagnostic testing routinely done in sleep disorder clinics in the absence of direct physician supervision (so the MD does not need to physically be on-site for the testing) but there must be policy and procedure and adequate oversite during the testing.
• Attending physicians may refer their patients to sleep disorder clinics. It is mandated that the clinics keep a record of attending physicians’ orders.
• Medical evidence confirms the need for diagnostic testing (for example, physician exams and lab tests). These office visit notes and documentation must be kept in the sleep clinic’s patient record as well.

MCR does not cover duplicate diagnostic testing of earlier testing done by the attending physician, to the extent results are still relevant, because it isn’t reasonable and necessary under section 1862(a)(1)(A) of the Social Security Act.

MCR continues working with MACs to educate providers on properly billing polysomnography services, including meeting the requirements outlined in Medicare Program Integrity Manual, Chapter 5 for CPAP services.

Documentation Requirements

MCR does require an order from the provider who treats the patient for all diagnostic tests, including polysomnography. Polysomnography providers must enter the ordering provider’s name and National Provider Identifier (NPI) on the polysomnography claim.

MCR covers polysomnography only if the patient has documented symptoms, such as complaints of narcolepsy, sleep apnea, impotence or parasomnia in the medical record. Note that polysomnography for chronic insomnia is not covered. Section 70 of Medicare Benefit Policy Manual, Chapter 15 provides detailed information on coverage indications.

I cannot stress enough the importance of also referencing the tips and documentation requirements needed for continuous positive airway pressure (CPAP) devices and accessories. It is not just the durable medical equipment (DME) suppliers or treating practitioners who need to understand these tips. A sleep service program must follow these requirements to ensure that patients can be properly treated for the diagnoses made in our centers.

HCPCS and CPT Codes for PAP

Local Coverage Determination (LCD): Positive Airway Pressure (PAP) Devices for the Treatment of OSA (L33718) provides the most current HCPCS and CPT codes.

Background

According to the 2021 Medicare Fee-for-Service (FFS) Supplemental Improper Payment Data, the improper payment rate for CPAP is 30.8%, with a projected improper payment amount of $319 million.

MCR will cover CPAP devices and accessories under the DME benefit (section 1861[s][6] of the Social Security Act). You must meet the provisions in National Coverage Determination (NCD): CPAP Therapy for OSA (240.4). You can reference the policy requirements in LCD L33718.

Denial Reasons

For the 2021 reporting period, MCR states that insufficient documentation accounted for 88.6% of improper payments for positive airway pressure devices. No documentation (0.5%), medical necessity (0.5%), incorrect coding (0.1%) and “other” errors (10.3%) caused improper payments.

Preventing Denials

These Medicare coverage and payment guidelines apply to CPAP device claims:

• The patient has an in-person clinical evaluation by the treating practitioner before the sleep test to assess them for OSA
• The patient has had an approved sleep test:
  • Polysomnogram (PSG) attended by qualifying practitioner and done in sleep lab
  • Unattended home sleep test (HST) with a Type II or Type III home sleep monitoring device
  • Unattended HST with a Type IV home sleep monitoring device that measures at least three channels
• The sleep test is interpreted by a practitioner who specializes in sleep studies and shows either:
  • An Apnea-Hypopnea Index (AHI) or Respiratory Disturbance Index (RDI) greater than, or equal to, 15 events per hour with a minimum of 30 events
  • An AHI or RDI is greater than, or equal to, five and less than, or equal to, 14 events per hour with a minimum of 10 events and documentation of:
    • Excessive daytime sleepiness, impaired cognition, mood disorders or insomnia
    • Hypertension, ischemic heart disease or history of stroke
• When providing the PAP, you must also document that the device’s supplier instructed the patient or their caregiver in the equipment’s proper use and care Continued coverage after 12 weeks depends on practitioner reassessment and documentation of patient therapy regimen adherence and OSA symptom improvement

To Note

MCR does define “apnea” as a cessation of airflow for at least 10 seconds. They define “hypopnea” as an abnormal respiratory event lasting at least 10 seconds with at least 30% reduction in thoracoabdominal movement or airflow and at least 4% oxygen desaturation.

Documentation Requirements

To justify payment, you must meet specific requirements when ordering Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS).

For CPAP devices, MCR does require a face-to-face encounter or written order prior to delivery before the item(s) are delivered to the patient.

Resources

• Master List of DMEPOS Items
• Prior Authorization and Pre-Claim Review Initiatives

Conclusion

It is important to remain updated and compliant with MCR payment standards. It is also important to note that the majority of commercial health insurers follow or reference Medicare guidelines. Establish a culture within your business that promotes prevention of errors and detects and resolves problematic practices to ensure proper documentation.
Despite the ups and downs the sleep industry has experienced recently, I hope that 2022 has been a successful year for you and your organization. Thank you for taking the time to reference AAST, we are very thankful. Here is to a happy and healthy 2023 for you and yours.