Compliance with the provisions in this LCD may be monitored and addressed through post payment data analysis and subsequent medical review audits.
History/Background and/or General Information
Sleep complaints and disorders are widespread. Although approximately 40 million Americans suffer from chronic sleep disorders, 95% of these are undiagnosed and untreated. The aging process places elderly persons at risk for sleep disturbances as the amount of time spent in deeper levels of sleep diminishes. Many sleep disorders can be managed by primary care physicians; however, when abnormal sleep patterns are not easily explainable and further evaluation is necessary, sleep studies may be needed.
Normal nocturnal sleep in adults displays a consistent organization from night to night. Sleep consists of two distinct states: rapid eye movement (REM), also called dream sleep and non-rapid eye movement (NREM), which is divided into four stages. NREM stages 1 and 2 are referred to as light sleep and stages 3 and 4 as deep or slow-wave sleep. Dreaming occurs mostly in REM. Sleep is a cyclic phenomenon, with four or five REM periods during the night accounting for about one-fourth of the total night's sleep (1 1/2 - 2 hours).
Sleep studies and polysomnography refer to the continuous and simultaneous monitoring and recording of various physiological and pathophysiological parameters of sleep for 6 or more hours with physician review, interpretation and report. The studies are performed to diagnose a variety of sleep disorders and to evaluate a patient’s response to therapies such as continuous positive airway pressure (CPAP). Polysomnography is distinguished from sleep studies by the inclusion of sleep staging.
Polysomnography is defined to include, but is not limited to the following:
- A 1-4 lead electroencephalogram (EEG) to measure global neural encephalographic activity using electrodes placed on the scalp
- Electrooculogram (EOG) to measure eye movements using electrodes placed near the outer canthus of each eye
- A submental electromyogram (EMG) to measure submental electromyographic activity using electrodes placed over the mentalis, submentalis muscle, or masseter regions
- Rhythm electrocardiogram (ECG) with two or three chest leads
- Nasal or oral airflow via mercury switches or by direct observation
- Ventilation and respiratory effort by chest-wall and abdominal movement measured using strain gauges, piezoelectric belts, inductive plethysmography, impedance or inductance pneumography, endoesophageal pressure, or by intercostal EMG
- Gas exchange (oxygen saturation [SpO2]) by oximetry, transcutaneous monitoring, or end-tidal gas analysis
- Extremity muscle activity, motor activity-movement using EMG
- Body positions via mercury switches or by direct observation
- Recordings of vibration (frequency or volume) may be recorded
- Transcutaneous CO2, esophageal pH, penile trumescence, and bipolar EEG
Multiple sleep latency testing (MSLT) involves several 20-minute nap opportunities (usually 4-5) offered at 2-hour intervals. MSLT objectively assesses sleep tendency by measuring the number of minutes it takes the patient to fall asleep. Conversely, the maintenance of wakefulness test (MWT) requires the patient to try to stay awake. MSLT is the better test for demonstration of sleep-onset REM periods, a determination that is important in establishing the diagnosis of narcolepsy. To insure validity, proper interpretation of the MSLT can only be made following a polysomnography performed on the preceding night.
All in facility sleep studies to be considered reasonable and necessary shall be performed in or under the direct supervision of a hospital sleep laboratory, a sleep clinic that is a direct extension of a physician’s office or by an Independent Diagnostic Testing Facility (IDTF). Each facility shall be supervised or under the directorship of a physician (MD/DO) trained in analyzing and interpreting the recordings who is Board Certified by the American Academy of Sleep Medicine (AASM), American Board of Medical Specialties in Sleep Medicine (ABMS) or board eligible for these credentials AND should be attended by an appropriately trained technologist. (Please see the Documentation Requirements for acceptable list of technical support for these studies).
In addition, the non-hospital based sleep clinic or IDTF shall be certified by the American Academy of Sleep Medicine, The Joint Commission (formerly known as JCAHO), or Accreditation Commission for Health Care, Inc. (ACHC).
Sleep studies performed in the home shall only be covered under special circumstances listed below under "Out of Center Sleep Testing (OCST)." All home sleep studies, to be covered, must be under the supervision of the hospital based sleep lab, a sleep clinic that is a direct extension of the physician's office, an IDTF, or entity accredited by AASM as an OCST entity.
A - Criteria for Coverage of Diagnostic Tests and therapeutic tests.
All reasonable and necessary diagnostic tests given for the medical conditions listed in subsection B are covered when the following criteria are met: (Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 for complete information).
- The hospital-based clinic is under the direction and control of physicians that are board certified or eligible in sleep medicine. All non-hospital based facilities in addition must be certified by the AASM, The Joint Commission, or ACHC. Diagnostic testing routinely performed in sleep disorder clinics may be covered even in the absence of direct supervision by a physician.
B – Medical Conditions for Which Testing is Covered.
The information below supplements the information in the Medicare Manual. Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 for complete information on medical conditions for which testing is covered.
The diagnosis of narcolepsy is usually confirmed by an overnight sleep study (polysomnography) that is facility based followed by a MSLT that is likewise facility based. The following measurements are normally required to diagnose narcolepsy:
- Polysomnographic assessment of the quality and quantity of nighttime sleep;
- Determination of the latency of the first REM episode;
- MSLT; and
- The presence of REM-sleep episodes.
Initial polysomnography and MSLT occasionally fail to identify narcolepsy.
Repeat polysomnography may be indicated and is usually facility based:
- if the first study is technically inadequate due to equipment failure;
- if the subject could not sleep or slept for an insufficient amount of time to allow a clinical diagnosis;
- if initiation of therapy or confirmation of the efficacy of prescribed therapy is needed; or
- if the results were inconclusive or ambiguous.
2. Sleep Apnea - Testing by type III or IV devices can also be covered under special circumstances. See definitions below as well as the home sleeping testing (HST) section below.
Sleep apnea may be due to an occlusion of the airway (obstructive apnea), absence of respiratory effort (central sleep apnea) or a combination of these factors (mixed sleep apnea).
Obstructive sleep apnea (OSA) may be caused by one of the following:
- Reduced upper airway caliber due to obesity;
- Adenotonsillar hypertrophy;
- Mandibular deficiency;
- Upper airway tumor;
- Excessive pressure across the collapsible segment of the upper airway;
- Activity of the muscles of the upper airway insufficient to maintain patency.
Diagnosis of obstructive sleep apnea requires documentation of:
- Apnea-Hypopnea Index* (AHI)/Respiratory Disturbance Index (RDI)* greater than or equal to 15 events per hour, or
- AHI greater than or equal to 5 and less than or equal to 14 events per hour with documented symptoms of excessive daytime sleepiness, impaired cognition, mood disorders or insomnia, or documented hypertension, ischemic heart disease, or history of stroke
*For additional information regarding AHI, RDI and the use of continuous positive airway pressure (CPAP), please refer to CMS Publication 100-03, Medicare National Coverage Determinations (NCD) Manual, Chapter 1, Section 240.4
The use of CPAP devices is covered under Medicare when ordered and prescribed by the licensed treating physician to be used in adult patients with OSA if either of the AHI/RDI criteria mentioned above are met.
The polysomnography Type II, III or Type IV devices as defined below must be performed in a facility-based sleep study laboratory or by portable monitoring (including in other parts of a facility, out of facility, or at home testing) under the restrictions listed below and with the credentialing requirements being met. Initial claims must be supported by medical documentation (separate documentation where electronic billing is used) with documentation of medical necessity.
For patients with severe and unambiguous obstructive sleep apnea, the initiation of treatment with nasal CPAP may be incorporated into the diagnostic study night. This is called a "split-night" study (initial diagnostic polysomnogram followed by CPAP titration during polysomnography on the same night). A split night study is an overnight polysomnogram in which the patient spends the first half of the night being monitored for sleep apnea. In the event the study shows severe enough disease to merit treatment with CPAP (refer to the Medicare DME LCD on CPAP requirements), the technologist will place the patient on CPAP and will adjust the pressure on the CPAP to treat the underlying sleep apnea. This approach may be an alternative to one full night of diagnostic polysomnography followed by a second night of titration as long as:
- CPAP titration is carried out for more than 3 hours; and
- Polysomnography documents that CPAP eliminates or nearly eliminates the respiratory events during REM and NREM sleep.
Repeat polysomnography or sleep testing for diagnosing sleep apnea requires documentation justifying the medical necessity for the repeated test. Repeat polysomnography/sleep testing may be indicated:
- if the first study is technically inadequate due to equipment failure;
- if the subject could not sleep or slept for an insufficient amount of time to allow a clinical diagnosis;
- if the results were inconclusive or ambiguous; or
- if initiation of therapy or confirmation of the efficacy of prescribed therapy is needed.
Follow-up polysomnography or sleep studies are not routinely indicated for patients treated with CPAP whose symptoms continue to be resolved with CPAP treatment. Follow-up polysomnography studies may be indicated, however, for the following conditions:
- After substantial weight loss has occurred in patients on CPAP for treatment of sleep-related breathing disorders to ascertain whether CPAP is still needed at the previously titrated pressure;
- After substantial weight gain has occurred in patients previously treated with CPAP successfully, who are again symptomatic despite the continued use of CPAP, to ascertain whether pressure adjustments are needed; or
- When clinical response is insufficient or when symptoms return despite a good initial response to treatment with CPAP.
3. Impotence – Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 for coverage guidance.
4. Parasomnia - These studies shall not be performed in the home.
Normally, a clinical history, neurologic examination, and routine EEG obtained while the patient is awake and asleep are often sufficient to establish the diagnosis and permit the appropriate treatment of sleep-related epilepsy. In addition, common, uncomplicated, non-injurious parasomnias, such as typical disorders of arousal, nightmares, enuresis, somniloquy, and bruxism can usually be diagnosed by clinical evaluation alone.
Polysomnography is indicated to provide a diagnostic classification or prognosis when both of the following exist:
- When the clinical evaluation and results of standard EEG have ruled out a seizure disorder; and
- In cases that present a history of episodes during sleep that result in harm to the patient or others.
When polysomnography is performed for the diagnosis of parasomnias, the following measurements are obtained:
- Sleep-scoring channels (EEG, EOG, chin EMG);
- EEG using an expanded bilateral montage;
- EMG for body movements;
- Audiovisual recording; and
- Documented technologist observations.
C - Polysomnography for Chronic Insomnia Is Not Covered.
Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 for complete information regarding non coverage.
D - Coverage of Therapeutic Services.
Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 for complete information on coverage of therapeutic services.
Please refer to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 70 and CMS Publication 100-03, Medicare National Coverage Determinations (NCD) Manual, Chapter 1, Section 240.4 for complete information on coverage limitations.
Polysomnography or sleep studies, and MSLT are not covered in the following situations:
- To preoperatively evaluate a patient for laser-assisted uvulopalatopharyngoplasty without clinical evidence that obstructive sleep apnea is suspected;
- To diagnose chronic lung disease (nocturnal hypoxemia in patients with chronic, obstructive, restrictive or reactive lung disease is usually adequately evaluated by oximetry; however, if the patient's sign/symptoms suggest a diagnosis of obstructive sleep apnea, polysomnography may be considered medically necessary);
- In cases where seizure disorders have not been ruled out;
- In cases of typical, uncomplicated and non-injurious parasomnias when the diagnosis is clearly delineated;
- For patients with epilepsy who have no specific complaints consistent with a sleep disorder;
- For patients with symptoms suggestive of periodic limb movement disorder or restless leg syndrome unless symptoms are suspected of being related to a covered indication;
- For the diagnosis of insomnia related to depression;
- For the diagnosis of circadian rhythm sleep disorders (i.e., rapid time-zone change [jet lag], shift-work sleep disorder, delayed sleep phase syndrome, advanced sleep phase syndrome, and non-24 hour sleep/wake disorder).
Out of Center Sleep Testing (OCST) - prior terms include Home Sleep Testing (HST), Portable Monitoring (PM) or Out of the Facility (OOF) Testing
When the diagnostic evaluation of sleep disorders requires overnight examination of the sleeping patient by means of polysomnography to assess severity, effect on sleep architecture and continuity, and the effects on gas exchange, cardiac function, etc., the polysomnography is used in conjunction with the patient's history, other laboratory tests and observations, and the physician's knowledge of sleep disorders to reach a diagnosis and to recommend appropriate treatment and follow-up.
A Final Decision Memo (FDM) was issued by CMS on March 13, 2009, concerning Home Sleep Testing (HST) acceptance for coverage to determining need for CPAP.
Several issues were unanswered by this FDM. This LCD shall attempt to clarify under what circumstances this OCST will be considered reasonable and necessary and therefore payable. The accuracy of diagnostic sleep studies depends on the knowledge, skill, and experience of the technologist and interpreter and does not matter if Type I, II, III, or IV or where the test is performed. Consequently, the providers of interpretations must be capable of demonstrating documented training and experience and maintain documentation for post-payment audit. (See "Documentation Requirements" section of this policy for certification/accreditation requirements). Because patients referred for sleep studies must be evaluated thoroughly, the participation of a physician in the program is required. After evaluation, diagnosis, and the development of a treatment plan, patients are usually returned to their referring physicians, some patients will elect at least some treatment and follow-up with the sleep disorders program staff, particularly for prescription refills, the follow-up of nasal CPAP, etc. It is expected that ongoing education of the patient is an integral part of the treatment.
Space, equipment, and staffing must be consistent with the requirements noted in the Documentation Requirements Section below.
- All studies and application of OCST testing devices must have adequate and proper education and application performed by an acceptable technician before the study is performed as noted in the Documentation Requirements sections.
- All sleep studies (in facility or out of facility) are to be supervised and with an over read by the providers meeting the accreditation requirements list below in the Documentation Requirements Section to be considered reasonable and necessary and thereby payable.
All facility based (non-hospital affiliated) ordered sleep studies (in facility or OCST) shall be performed under the direction of a Center/Laboratory that meets the following criteria:
- Each center/laboratory must have as medical director a physician with a license valid in the state of the center;
- Technicians must work under the direction and control of a licensed physician, even though this test may be covered in the absence of direct supervision. This information should be documented and available upon request;
- Each center/laboratory, non-hospital based, must be accredited by and comply with the standards set in the Documentation Requirements below to be considered reasonable and necessary and thereby payable. (AASM, The Joint Commission, ACHC).
Each center/laboratory in a freestanding center that is a direct extension of a physician's office associated with physician must have on staff (1) a physician/PhD psychologist who has the credentials listed in the Documentation Requirement Section or (2) special training in sleep medicine with the specialty designation of either pulmonary medicine, neurology, psychiatry, or otolaryngology so credentialed as noted in the Documentation Requirements Section below to be considered reasonable and necessary and thereby payable.
Hospital based sleep, as well as non-hospital based sleep clinics shall be credentialed with the qualification listed in the Documentation Requirements below and shall meet the following criteria for OCST:
- The medical record must clearly indicate the patient has a high likelihood of having moderate to severe sleep apnea
- This increased likelihood is evidenced by symptoms and physical examination documented in the note
- That no comorbidities exist that are contraindications to OCST testing
OCST is not appropriate for the diagnosis of OSA in patients with significant comorbid medical conditions or comorbid sleep disorders that may degrade the accuracy of PM, including, but not limited to, moderate to severe pulmonary disease, neuromuscular disease, or congestive heart failure.
- For patients unable to be studied in the sleep laboratory when such a study is not possible by virtue of immobility, safety, or critical illness.
- For follow-up studies when diagnosis has been established by standard polysomnography and therapy and there is a material change in patients symptoms or complaints, again in the patient with no comorbid conditions. May also be indicated to monitor the response to non-CPAP treatments for sleep apnea.
- When initiation of treatment is urgent and standard polysomnography is not readily available.
Types of Monitors:
- Type 1: full attended polysomnography (greater than or equal to 7 channels) in a laboratory setting
- Type 2: full unattended polysomnography (greater than or equal to 7 channels)
- Type 3: limited channel devices (usually using 4–7 channels)
- Type 4: sleep testing devices measuring three or more channels, one of which is airflow, is covered when used to aid the diagnosis of OSA in beneficiaries who have signs and symptoms indicative of OSA if performed unattended in or out of sleep lab facility or attended in a sleep lab facility.
- Sleep testing device measuring three or more channels that include actigraphy, oximetry, and peripheral arterial is covered when used to aid the diagnosis of OSA in beneficiaries who have signs and symptoms indicative of OSA if performed unattended in or out of a sleep lab facility or attended in a sleep lab facility.
All OCST apparatus requires adequate and proper education to the patient and must be documented in the medical record, and available upon request. While a face to face meeting is not required, the education must be appropriate. If the patient does not seem to understand the instructions, a face to face meeting should be scheduled.
A follow-up visit to review test results should be performed for all patients undergoing OCST in the sleep facility authorized to order such testing or oversee OCST testing. Negative or technically inadequate OCST in patients with a high pretest probability of moderate to severe OSA should have prompt in-laboratory polysomnography.
Neither in facility polysomnography nor OCST testing is a covered service for Medicare beneficiaries for general screening of asymptomatic populations.
All reasonable and necessary diagnostic tests given for the medical conditions listed above are covered if the criteria are met.
At a minimum, OCST must record airflow, respiratory effort, and blood oxygenation. The airflow, effort, and oximetric biosensors conventionally used for in-laboratory PSG should be used in OCST. See above descriptions of monitor types.
WatchPAT 100 or WatchPAT 200 device was listed as a covered device by the FDM meeting the criteria for recording of heart rate, oxygen saturation and respiratory analysis (e.g., by airflow or peripheral arterial tone).This device was initially placed in the Type IV monitoring device category, but was moved to a special category by CMS. This technology is considered for coverage in this LCD.
Our review found that actigraphy was not a sufficiently accurate substitute measure of sleep time to recommend its routine use. This device can be used for documentation of coverage of CPAP by NCD but the coverage of interpretation will not be paid separately for reason already stated.
This coverage determination also applies within states outside the primary geographic jurisdiction with facilities that have nominated this contractor to process their claims.
Limitation of liability and refund requirements apply when denials are based on medical necessity. The provider/supplier must notify the beneficiary in writing, prior to rendering the service, if the provider/supplier is aware that the test, item or procedure may not be considered medically necessary by Medicare. The limitation of liability and refund requirements do not apply when the test, item or procedure is statutorily excluded, has no Medicare benefit category or is rendered for screening purposes. In these instances it is recommended, although not required, that the provider notify the beneficiary in writing with a Notice of Exclusion of Medicare Benefits (NEMB).
For outpatient settings other than Comprehensive Outpatient Rehabilitation Facilities (CORFs), references to "physicians" throughout this policy include non-physicians, such as nurse practitioners, clinical nurse specialists and physician assistants. Such non-physician practitioners, with certain exceptions, may certify, order and establish the plan of care for Polysomnography and Sleep Study services as authorized by State law. (See Sections 1861[s] and 1862[a] of Title XVIII of the SSA; 42 CFR, Sections 410.74, 410.75, 410.76 and 419.22; 58 FR 18543, April 7, 2000.)
Notice: Services performed for any given diagnosis must meet all of the indications and limitations stated in this LCD, the general requirements for medical necessity as stated in CMS payment policy manuals, any and all existing CMS national coverage determinations, and all Medicare payment rules.