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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules state that PSG is covered for  
Sleep Apnea -  
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; 
- Macroglossia; 
- 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. 
You can find these rules in the Local Coverage Determination (LCD) for Outpatient Sleep Studies, L35050. 
This LCD is effective for services provided on or after September 12, 2019. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.