Highmark Medical Services, a CMS contractor, has issued a draft Local Coverage Determination (LCD) for sleep disorder testing, outlining proposed indications and limitations of coverage for regions in Pennsylvania, Maryland, District of Columbia, New Jersey, and Delaware.

Echoing the recently released NCD for CPAP coverage, the draft LCD states, “The use of CPAP is covered under Medicare when used in adult patients with OSA. Coverage of CPAP is initially limited to a twelve-week period to identify beneficiaries diagnosed with OSA as subsequently described who benefit from CPAP. CPAP is subsequently covered only for those beneficiaries diagnosed with OSA who benefit from CPAP during this twelve-week period. A positive diagnosis of OSA for the coverage of CPAP must include a clinical evaluation and a positive:

a. Attended polysomnography (PSG) performed in a sleep laboratory; or
b. unattended home sleep test (HST) with a Type II home sleep monitoring device; or
c. unattended HST with a Type III home sleep monitoring device; or
d. unattended HST with a Type IV home sleep monitoring device that measures at least three channels.”

“What this is about is whether or not CMS would pay for a CPAP trial that was initiated based on a positive test done in an unattended environment. The document seems to indicate, that taking the lead from the NCD, yes, they will with a level one, two, three, or newly defined level four [monitor],” says Terry Murphy, director of sales, North and South America, Embla. “The problem is they don’t give a new CPT code. The consensus that I am hearing is if you use a level 1 device to determine the patient’s need for a CPAP trial, they will pay you under the CPT codes that cover full polysomnography. If you use a level 2 or 3 device, they’ll pay you under CPT 95806. If you use anything else, you can use it to qualify the patient for a CPAP trial, but they will not pay you anything.”

The draft also states that while physicians may perform sleep disorder testing, they must have expertise in the field of sleep medicine. “Technicians or physicians who perform or supervise sleep studies must be capable of demonstrating training and experience specific to the study performed and maintain documentation for postpayment audit,” the draft states. “Physicians who perform, supervise, and/or interpret the studies must be capable of demonstrating training and experience specific to the study performed or interpreted and maintain documentation for postpayment audit. The performance of these studies is limited to technicians or physicians who are highly skilled in sleep disorder testing. The accuracy and utility of the results are dependent on the skill of the performing provider; therefore, the provider may be subject to a postpayment peer review in order to verify his/her qualifications.”

“They have given some clarification about who they will allow to interpret these records or the standards to which they will be held,” says Murphy. “They are saying you better be prepared to prove you are competent to review these [sleep test] records.”

Though some gaps left by the NCD are being filled, industry insiders would like to see more definitive policy that does not require speculation, interpretation, or assumption. “There are a few nuances that could unintentionally be misinterpreted,” says Phillip Porte, executive director, Sleep Manufacturers Alliance. “For example, there is an inference that PSG is preferred over HST, but if I recall correctly, the CMS analysis showed only a modest bit more confidence in PSG over HST, and neither reached the ‘gold standard’ level of confidence.”

Porte continued, “Second, there is a reference to the physician being required to perform the test, and if not, allied health personnel have to conduct the test in accordance with CMS' ‘incident to’ rules.  We are very familiar with those rules and there is not only inconsistent interpretation within CMS about what they mean, but there is certainly inconsistent interpretation across contractors in terms of their interpretations.”

Further clarification may appear when the LCD is finalized. To view the current draft, click here.