Knowledge Base Article

Some people may not get their gift from Santa this Christmas. When I was a child, I was always told that Santa Claus would not come until I went to sleep. If the number of people having sleep study testing is any indication, a lot of people in the US are having trouble sleeping. An OIG audit reported that from 2005 to 2011, Medicare spending for polysomnography services rose from $407 million to $565 million, an increase of 39 percent.

Because of this dramatic increase in the volume of sleep studies, several Medicare review contractors have sleep studies and polysomnography as one of their review topics. Two such contractors are the Comprehensive Error Rate Testing (CERT) reviewers and the Supplemental Medical Review Contractors (SMRC). (see the SMRC Polysomnography Project )

Medicare covers diagnostic testing of sleep disorders when the patient has symptoms or complaints of narcolepsy, sleep apnea, impotence or parasomnia. Polysomnography for chronic insomnia is not covered. (See Medicare Benefit Policy Manual, Chapter 15 section 70) There is also a National Coverage Determination (NCD 240.4.1) and several Local Coverage Determinations (LCDs) concerning the coverage requirements for sleep studies.

All reasonable and necessary diagnostic tests for the conditions listed above are covered when the following criteria are met:

• The clinic is either affiliated with a hospital or is under the direction and control of physicians. Diagnostic testing routinely performed in disorder clinics may be covered even in the absence of direct supervision by a physician;
• Patients are referred to the sleep disorder clinic by their attending physicians, and the clinic maintains a record of the attending physician’s order; and
• The need for diagnostic testing is confirmed by medical evidence, e.g. physician examination and laboratory tests.

Based on the findings from CERT reviews, discussed in the October 2014 Medicare Quarterly Compliance Newsletter, 97% of improper payments are due to insufficient documentation. So what do providers need to do to ensure they receive payment for their polysomnography services? Make sure the documentation in the medical record for sleep studies includes:

• A valid physician’s order for the diagnostic study or documentation to support the intent to order study (if there is no order, evidence of the intent to order PSG documented in the medical record can be accepted)
• A physician’s signature on the procedure note; and
• Clinical documentation to support the reason/need for the diagnostic study (e.g. documentation to support the fact that the beneficiary had symptoms and signs of sleep apnea).

You have to be good (and asleep) to get your presents from Santa, but you have to have complete and appropriate documentation to get your present (payment) from Medicare for sleep testing.

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.