Coverage Indications, Limitations, and/or Medical Necessity
For any item to be covered by Medicare, it must 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) meet all other applicable Medicare statutory and regulatory requirements.
The purpose of a Local Coverage Determination (LCD) is to provide information regarding “reasonable and necessary” criteria based on Social Security Act § 1862(a)(1)(A) provisions.
In addition to the “reasonable and necessary” criteria contained in this LCD there are other payment rules, which are discussed in the following documents, that must also be met prior to Medicare reimbursement:
The LCD-related Standard Documentation Requirements Article, located at the bottom of this policy under the Related Local Coverage Documents section.
The LCD-related Policy Article, located at the bottom of this policy under the Related Local Coverage Documents section.
Refer to the Supplier Manual for additional information on documentation requirements.
Refer to the DME MAC web sites for additional bulletin articles and other publications related to this LCD.
For the items addressed in this LCD, the “reasonable and necessary” criteria, based on Social Security Act § 1862(a)(1)(A) provisions, are defined by the following coverage indications, limitations and/or medical necessity.
Apnea is defined as the cessation of airflow for at least 10 seconds.
Hypopnea is defined as an abnormal respiratory event lasting at least 10 seconds associated with at least a 30% reduction in thoracoabdominal movement or airflow as compared to baseline, and with at least a 4% decrease in oxygen saturation.
The apnea-hypopnea index (AHI) is defined as the average number of episodes of apnea and hypopnea per hour of sleep without the use of a positive airway pressure device. For purposes of this policy, respiratory effort related arousals (RERAs) are not included in the calculation of the AHI. Sleep time can only be measured in a Type I (facility based polysomnogram) or Type II sleep study (see descriptions below).
The respiratory disturbance index (RDI) is defined as the average number of apneas plus hypopneas per hour of recording without the use of a positive airway pressure device. For purposes of this policy, respiratory effort related arousals (RERAs) are not included in the calculation of the RDI. The RDI is reported in Type III, Type IV, and Other home sleep studies.
If the AHI or RDI is calculated based on less than 2 hours of sleep or recording time, the total number of recorded events used to calculate the AHI or RDI (respectively) must be at least the number of events that would have been required in a 2 hour period (i.e., must reach ≥30 events without symptoms or ≥10 events with symptoms).
In this policy, the term PAP (positive airway pressure) device will refer to both a single-level continuous positive airway pressure device (E0601) and a bi-level respiratory assist device without back-up rate (E0470) when it is used in the treatment of obstructive sleep apnea.
- An E0601 device is covered for the treatment of obstructive sleep apnea (OSA) if criteria A – C are met:
- The beneficiary has an in-person clinical evaluation by the treating practitioner prior to the sleep test to assess the beneficiary for obstructive sleep apnea.
- The beneficiary has a sleep test (as defined below) that meets either of the following criteria (1 or 2):
- The apnea-hypopnea index (AHI) or Respiratory Disturbance Index (RDI) is greater than or equal to 15 events per hour with a minimum of 30 events; or,
- The AHI or RDI is greater than or equal to 5 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; or,
Hypertension, ischemic heart disease, or history of stroke.
The beneficiary and/or their caregiver has received instruction from the supplier of the device in the proper use and care of the equipment.
If a claim for an E0601 is submitted and all of the criteria above have not been met, it will be denied as not reasonable and necessary.
- An E0470 device is covered for those beneficiaries with OSA who meet criteria A-C above, in addition to criterion D:
- An E0601 has been tried and proven ineffective based on a therapeutic trial conducted in either a facility or in a home setting.
Ineffective is defined as documented failure to meet therapeutic goals using an E0601 during the titration portion of a facility-based study or during home use despite optimal therapy (i.e., proper mask selection and fitting and appropriate pressure settings).
If E0470 is billed for a beneficiary with OSA and criteria A-D are not met, it will be denied as not reasonable and necessary.
A bi-level positive airway pressure device with back-up rate (E0471) is not reasonable and necessary if the primary diagnosis is OSA. If an E0471 is billed with a diagnosis of OSA, it will be denied as not reasonable and necessary.
If an E0601 device is tried and found ineffective during the initial facility-based titration or home trial, substitution of an E0470 does not require a new initial in-person clinical evaluation or a new sleep test.
If an E0601 device has been used for more than 3 months and the beneficiary is switched to an E0470, a new initial in-person clinical evaluation is required, but a new sleep test is not required. A new 3 month trial would begin for use of the E0470.
Coverage, coding and documentation requirements for the use of E0470 and E0471 for diagnoses other than OSA are addressed in the Respiratory Assist Devices (RAD) Local Coverage Determination (LCD) and related Policy Article (PA).
Coverage and Payment rules for sleep tests may be found in the LCDs for the applicable Medicare Part A or Part B contractor. There may be differences between those LCDs and the DME MAC LCD. For the purposes of coverage of PAP therapy, the DME MAC coverage, coding and payment rules take precedence.
Coverage of a PAP device for the treatment of OSA is limited to claims where the diagnosis of OSA is based upon a sleep test (Type I, II, III, IV, Other) that meets the Medicare coverage criteria in effect for the date of service of the claim for the PAP device. The sleep test must be either a polysomnogram performed in a facility-based laboratory (Type I study) or an inpatient hospital-based or home based sleep test (HST) (Types II, III, IV, Other). The test must be ordered by the beneficiary’s treating practitioner and conducted by an entity that qualifies as a Medicare provider of sleep tests and is in compliance with all applicable state regulatory requirements.
A Type I sleep test is the continuous and simultaneous monitoring and recording of various physiological and pathophysiological parameters of sleep with practitioner review, interpretation, and report. It is facility-based and must include sleep staging, which is defined to include a 1-4 lead electroencephalogram (EEG), electro-oculogram (EOG), submental electromyogram (EMG) and electrocardiogram (ECG). It must also include at least the following additional parameters of sleep: airflow, respiratory effort, and oxygen saturation by oximetry. It may be performed as either a whole night study for diagnosis only or as a split night study to diagnose and initially evaluate treatment.
An HST is performed unattended in the beneficiary’s home using a portable monitoring device. A portable monitoring device for conducting an HST must meet one of the following criteria:
- Type II device – Monitors and records a minimum of seven (7) channels: EEG, EOG, EMG, ECG/heart rate, airflow, respiratory movement/effort and oxygen saturation; or,
- Type III device – Monitors and records a minimum of four (4) channels: respiratory movement/effort, airflow, ECG/heart rate and oxygen saturation; or,
- Type IV device – Monitors and records a minimum of three (3) channels, one of which is airflow; or,
- Other - Devices that monitor and record a minimum of three (3) channels that include actigraphy, oximetry and peripheral arterial tone and for which there is substantive clinical evidence in the published peer-reviewed medical literature that demonstrates that the results accurately and reliably correspond to an AHI or RDI as defined above. This determination will be made on a device by device basis (See Appendix B for list of approved devices in this category).
For all PAP devices, beneficiaries who undergo an HST must, prior to having the test, receive instruction on how to properly apply a portable sleep monitoring device. This instruction must be provided by the entity conducting the HST and may not be performed by a DME supplier. Beneficiary instruction may be accomplished by either:
- Face-to-face demonstration of the portable sleep monitoring device’s application and use; or,
- Video or telephonic instruction, with 24 hour availability of qualified personnel to answer questions or troubleshoot issues with the device.
For all PAP devices the sleep test (Type I - IV, Other) must be interpreted by a practitioner who holds either:
- Current certification in Sleep Medicine by the American Board of Sleep Medicine (ABSM); or,
- Current subspecialty certification in Sleep Medicine by a member board of the American Board of Medical Specialties (ABMS) or American Osteopathic Association (AOA); or,
- Completed residency or fellowship training by an ABMS or AOA member board and has completed all the requirements for subspecialty certification in sleep medicine except the examination itself and only until the time of reporting of the first examination for which the practitioner is eligible; or,
- Active staff membership of a sleep center or laboratory accredited by the American Academy of Sleep Medicine (AASM), Accreditation Commission for Health Care (ACHC), or The Joint Commission (TJC, formerly the Joint Commission on Accreditation of Healthcare Organizations – JCAHO).
CONTINUED COVERAGE BEYOND THE FIRST THREE MONTHS OF THERAPY:
Continued coverage of a PAP device (E0470 or E0601) beyond the first three months of therapy requires that, no sooner than the 31st day but no later than the 91st day after initiating therapy, the treating practitioner must conduct a clinical re-evaluation and document that the beneficiary is benefiting from PAP therapy.
For PAP devices with initial dates of service on or after November 1, 2008, documentation of clinical benefit is demonstrated by:
- In-person clinical re-evaluation by the treating practitioner with documentation that symptoms of obstructive sleep apnea are improved; and,
- Objective evidence of adherence to use of the PAP device, reviewed by the treating practitioner.
Adherence to therapy is defined as use of PAP ≥4 hours per night on 70% of nights during a consecutive thirty (30) day period anytime during the first three (3) months of initial usage.
If the above criteria are not met, continued coverage of a PAP device and related accessories will be denied as not reasonable and necessary.
If the treating practitioner re-evaluation does not occur until after the 91st day but the evaluation demonstrates that the beneficiary is benefiting from PAP therapy as defined in criteria 1 and 2 above, continued coverage of the PAP device will commence with the date of that re-evaluation.
Beneficiaries who fail the initial 12 week trial are eligible to re-qualify for a PAP device but must have both:
- In-person clinical re-evaluation by the treating practitioner to determine the etiology of the failure to respond to PAP therapy; and,
- Repeat sleep test in a facility-based setting (Type 1 study). This may be a repeat diagnostic, titration or split-night study.
If an E0601 device is tried and found ineffective during the initial facility-based titration or home trial, substitution of an E0470 does not change the length of the trial unless there is less than 30 days remaining in the trial period. If more than 30 days remain in the trial period, the clinical re-evaluation would still occur between the 31st and 91st day following the initiation of an E0601 and objective documentation of adherence on the E0470 would need to occur prior to the 91st day following initiation of the E0601. If less than 30 days remain in the trial period, the clinical re-evaluation and objective documentation of adherence must occur before the 120th day following the initiation of the E0601.
If an E0601 device was used for more than 3 months and the beneficiary was then switched to an E0470, the clinical re-evaluation must occur between the 31st and 91st day following the initiation of the E0470. There would also need to be documentation of adherence to therapy during the 3 month trial with the E0470.
If there is discontinuation of usage of a PAP device at any time, the supplier is expected to ascertain this and stop billing for the equipment and related accessories and supplies.
For a PAP device dispensed prior to November 1, 2008, if the initial Medicare coverage criteria in effect at the time were met and the criteria for coverage after the first 3 months that were in effect at the time were met, the device will continue to be covered for dates of service on or after November 1, 2008 as long as the beneficiary continues to use the device.
CONCURRENT USE OF OXYGEN WITH PAP THERAPY
Some beneficiaries may require the simultaneous use of home oxygen therapy with a PAP device. To be considered for simultaneous coverage, all requirements in the Coverage Indications, Limitations and/or Medical Necessity for both Oxygen and Oxygen Equipment and Positive Airway Pressure (PAP) Devices for the Treatment of Obstructive Sleep Apnea LCDs must be met. Consequently, in addition to this LCD, suppliers should refer to the Oxygen and Oxygen Equipment LCD and related Policy Article for additional coverage, coding and documentation requirements.
Coverage of home oxygen therapy requires that the beneficiary be tested in the “chronic stable state.” Chronic stable state is a requirement of the National Coverage Determination (CMS Internet-only Manual, Pub. 100-03, Section 240.2) and is one of the key criteria when determining coverage of home oxygen therapy. The NCD defines chronic stable state as “…not during a period of an acute illness or an exacerbation of their underlying disease.” Based on this NCD definition, all co-existing diseases or conditions that can cause hypoxia must be treated and the beneficiary must be in a chronic stable state before oxygen therapy is considered eligible for payment. In addition, the beneficiary must have a severe lung disease, such as chronic obstructive pulmonary disease, diffuse interstitial lung disease, cystic fibrosis, bronchiectasis, widespread pulmonary neoplasm, or hypoxia-related symptoms or findings that might be expected to improve with oxygen therapy (see Oxygen LCD for additional information). For beneficiaries with OSA to be considered in the chronic, stable state, OSA must be sufficiently treated such that the underlying severe lung disease is unmasked. This must be demonstrated before oxygen saturation results obtained during polysomnography are considered qualifying for oxygen therapy.
For beneficiaries with OSA, a qualifying oxygen saturation test for the purposes of determining Medicare home oxygen reimbursement may only occur during a titration polysomnographic study (either split-night or stand-alone). The titration PSG is one in which all of the following criteria are met:
- The titration is conducted over a minimum of two (2) hours; and,
- During titration:
- The AHI/RDI is reduced to less than or equal to an average of ten (10) events per hour; or,
- If the initial AHI/RDI was less than an average of ten (10) events per hour, the titration demonstrates further reduction in the AHI/RDI; and,
- Nocturnal oximetry conducted for the purpose for oxygen reimbursement qualification may only be performed after optimal PAP settings have been determined and the beneficiary is using the PAP device at those settings; and,
- The nocturnal oximetry conducted during the PSG demonstrates an oxygen saturation ≤ 88% for 5 minutes total (which need not be continuous).
If all of the above criteria are met, for the purposes of a qualifying oxygen saturation test, the beneficiary is considered to be in the “chronic stable state.” To be eligible for Medicare coverage and payment for home oxygen therapy for concurrent use with PAP therapy, in addition to being in the chronic stable state, the beneficiary must meet all other coverage requirements for oxygen therapy.
Suppliers should refer to the Oxygen and Oxygen Equipment LCD and related Policy Article for additional coverage, coding and documentation requirements.
This section applies to PAP devices initially provided and covered while the beneficiary was in Medicare fee-for-service (FFS).
If a PAP device is replaced during the 5 year reasonable useful lifetime (RUL) because of loss, theft, or irreparable damage due to a specific incident, there is no requirement for a new clinical evaluation, sleep test, or trial period.
If a PAP device is replaced following the 5 year RUL, there must be an in-person evaluation by their treating practitioner that documents that the beneficiary continues to use and benefit from the PAP device. There is no requirement for a new sleep test or trial period.
BENEFICIARIES ENTERING MEDICARE:
For beneficiaries who received a PAP device prior to enrollment in fee for service (FFS) Medicare and are seeking Medicare coverage of either rental of the device, a replacement PAP device and/or accessories, both of the following coverage requirements must be met:
- Sleep test – There must be documentation that the beneficiary had a sleep test, prior to FFS Medicare enrollment, that meets the Medicare AHI/RDI coverage criteria in effect at the time that the beneficiary seeks Medicare coverage of a replacement PAP device and/or accessories; and,
- Clinical Evaluation – Following enrollment in FFS Medicare, the beneficiary must have an in-person evaluation by their treating practitioner who documents in the beneficiary’s medical record that:
- The beneficiary has a diagnosis of obstructive sleep apnea; and,
- The beneficiary continues to use the PAP device.
If either criteria 1 or 2 above are not met, the claim will be denied as not reasonable and necessary.
In these situations, there is no requirement for a clinical re-evaluation or for objective documentation of adherence to use of the device.
Accessories used with a PAP device are covered when the coverage criteria for the device are met. If the coverage criteria are not met, the accessories will be denied as not reasonable and necessary.
The following table represents the usual maximum amount of accessories expected to be reasonable and necessary:
||1 per 3 months
||1 per 3 months
||2 per 1 month
||2 per 1 month
||1 per 3 months
||1 per 1 month
||2 per 1 month
||2 per 1 month
||1 per 3 months
||1 per 6 months
||1 per 6 months
||1 per 3 months
||2 per 1 month
||1 per 6 months
||1 per 6 months
Quantities of supplies greater than those described in the policy as the usual maximum amounts will be denied as not reasonable and necessary.
A Standard Written Order (SWO) must be communicated to the supplier before a claim is submitted. If the supplier bills for an item addressed in this policy without first receiving a completed SWO, the claim shall be denied as not reasonable and necessary.
For Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) base items that require a Written Order Prior to Delivery (WOPD), the supplier must have received a signed SWO before the DMEPOS item is delivered to a beneficiary. If a supplier delivers a DMEPOS item without first receiving a WOPD, the claim shall be denied as not reasonable and necessary. Refer to the LCD-related Policy Article, located at the bottom of this policy under the Related Local Coverage Documents section.
For DMEPOS base items that require a WOPD, and also require separately billed associated options, accessories, and/or supplies, the supplier must have received a WOPD which lists the base item and which may list all the associated options, accessories, and/or supplies that are separately billed prior to the delivery of the items. In this scenario, if the supplier separately bills for associated options, accessories, and/or supplies without first receiving a completed and signed WOPD of the base item prior to delivery, the claim(s) shall be denied as not reasonable and necessary.
An item/service is correctly coded when it meets all the coding guidelines listed in CMS HCPCS guidelines, LCDs, LCD-related Policy Articles, or DME MAC articles. Claims that do not meet coding guidelines shall be denied as not reasonable and necessary/incorrectly coded.
Proof of delivery (POD) is a Supplier Standard and DMEPOS suppliers are required to maintain POD documentation in their files. Proof of delivery documentation must be made available to the Medicare contractor upon request. All services that do not have appropriate proof of delivery from the supplier shall be denied as not reasonable and necessary.
For DMEPOS items and supplies provided on a recurring basis, billing must be based on prospective, not retrospective use. For DMEPOS products (A4604, A7027, A7028, A7029, A7030, A7031, A7032, A7033, A7034, A7035, A7036, A7037, A7038, A7039, A7044, A7045, A7046) that are supplied as refills to the original order, suppliers must contact the beneficiary prior to dispensing the refill and not automatically ship on a pre-determined basis, even if authorized by the beneficiary. This shall be done to ensure that the refilled item remains reasonable and necessary, existing supplies are approaching exhaustion, and to confirm any changes or modifications to the order. Contact with the beneficiary or designee regarding refills must take place no sooner than 14 calendar days prior to the delivery/shipping date. For delivery of refills, the supplier must deliver the DMEPOS product no sooner than 10 calendar days prior to the end of usage for the current product. This is regardless of which delivery method is utilized.
For all DMEPOS items that are provided on a recurring basis, suppliers are required to have contact with the beneficiary or caregiver/designee prior to dispensing a new supply of items. Suppliers must not deliver refills without a refill request from a beneficiary. Items delivered without a valid, documented refill request will be denied as not reasonable and necessary.
Suppliers must not dispense a quantity of supplies exceeding a beneficiary's expected utilization. Suppliers must stay attuned to changed or atypical utilization patterns on the part of their clients. Suppliers must verify with the treating practitioners that any changed or atypical utilization is warranted.
Regardless of utilization, a supplier must not dispense more than a three (3) - month quantity at a time.
Either a non-heated (E0561) or heated (E0562) humidifier is covered when ordered by the treating practitioner for use with a covered PAP (E0470 or E0601) device.
Summary of Evidence
Analysis of Evidence
(Rationale for Determination)