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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 say that effective for claims with dates of service on and after March 3, 2009, the Centers for 
Medicare & Medicaid Services finds that the evidence is sufficient to determine that the results of the sleep 
tests identified below can be used by a beneficiary's treating physician to diagnose OSA, that the use of such 
sleep testing technologies demonstrates improved health outcomes in Medicare beneficiaries who have OSA 
and receive the appropriate treatment, and that these tests are thus reasonable and necessary under section 
1862(a)(1)(A) of the Social Security Act. 
 
1. Type I PSG is covered when used to aid the diagnosis of OSA in beneficiaries who have clinical signs and 
symptoms indicative of OSA if performed attended in a sleep lab facility. 
 
2. Type II or Type III sleep testing devices are covered when used to aid the diagnosis of OSA in beneficiaries 
who have clinical signs and symptoms indicative of OSA if performed unattended in or out of a sleep lab 
facility or attended in a sleep lab facility. 
 
3. Type IV sleep testing devices measuring three or more channels, one of which is airflow, are 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. 
 
4. Sleep testing devices measuring three or more channels that include actigraphy, oximetry, and peripheral 
arterial tone, are 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. 
 
C. Nationally Non-Covered Indications 
 
Effective for claims with dates of services on and after March 3, 2009, other diagnostic sleep tests for the 
diagnosis of OSA, other than those noted above for prescribing CPAP, are not sufficient for the coverage of 
CPAP and are not covered. 
 
You can find this information in Medicare's National Coverage Determination (NCD) for Sleep Testing for 
Obstructive Sleep Apnea (OSA) (240.4.1). 
 
The rules say that for all hospital based facilities, the facility must be under the direction and control of 
physicians that are board certified or eligible in sleep medicine. 
 
Medicare does not cover sleep studies performed in mobile sleep laboratories. 
 
The sleep laboratory or testing facility must be affiliated with a hospital or be under the direction and control of 
a physician (MD/DO), even though the diagnostic test may be performed in the absence of direct physician 
supervision. The laboratory physician director must be/have: 
 
    Board-certified in sleep medicine (ABSM, i.e., Diplomate of, or board-eligible for, the American Board of 
Sleep Medicine; or 
    A diplomate or board-eligible for an American Board of Medical Specialties (ABMS) approved board; or 
    Completed residency or fellowship training by an ABMS 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 physician is eligible; or 
    An active staff member of a sleep center or laboratory accredited by the American Academy of Sleep 
Medicine (AASM), the Accreditation Commission for Health Care, Inc. or The Joint Commission (formerly the 
Joint Commission on Accreditation of Healthcare Organizations (JCAHO); or 
    Completed training and certification from the National Board for Respiratory Care (NBRC) Inc. 
 
HST scoring must be performed by an individual certified by the Board of Registered Polysomnographic 
Technologists as a Registered Polysomnographic Technologist (RPSGT), or equivalent, or by a 
polysomnographic technician under the supervision of a RPSGT, or by a Registered Respiratory Therapist-
Sleep Disorder Specialist (RRT-SDS) or a Certified Respiratory Therapist-Sleep Disorder Specialist (CRT-
SDS), or equivalent. RPSGTs, RRT-SDS, CRT-SDS and polysomnographic technicians must meet the 
standards for such individuals promulgated by the American Academy of Sleep Medicine Standards for 
Accreditation of Laboratories for Sleep Related Breathing Disorders, or by the Accreditation Commission for 
Health Care, Inc. Standards for Accreditation for Sleep Programs or by the National Board for Respiratory 
Care (NBRC) Inc. and be licensed or certified by the state in which they practice, if such licensure or 
certification exists. The laboratory physician must review the entire raw data recording for every patient 
studied. 
 
The above credentialing information must be documented and available upon request. 
 
Documentation Requirements: 
Sleep studies and polysomnography refer to the continuous and simultaneous monitoring and recording of 
various physiological and pathophysiological parameters of sleep with 6 or more hours of recording with 
physician review, interpretation and report. 
 
The following minimal information must be included in the sleep disorders evaluation report: 
 
    Parameters monitored; 
    Start time and duration of day/night of study; 
    Total sleep time, sleep efficiency, number/duration of awakenings; 
    For tests involving sleep staging: time and percent time spent in each stage; 
    For tests monitoring sleep latency or maintenance of wakefulness testing: latency to both NREM and REM 
sleep; 
    Individual sub-test sleep latencies, mean sleep latency, and the number of REM occurrences on MSLT. 
    Respiratory patterns including type (central/obstructive/periodic), number and duration, effect on 
oxygenation, sleep stage/body position relationship, and response to any diagnostic/therapeutic maneuvers; 
    Cardiac rate/rhythm and any effect of sleep disordered breathing on EKG, 
    Detailed behavioral observations; and 
    EEG or EMG abnormalities. 
 
The patient must be referred to the clinic by the attending/treating physician. The referring physician's order for 
the testing must be kept in the medical record. Sleep testing must be conducted by an entity that qualifies as a 
Medicare provider of sleep testing and is in compliance with all applicable state regulatory requirements. The 
patient who undergoes HST must receive, prior to the test, adequate instruction on how to properly apply a 
portable sleep monitoring device. This instruction must be provided by the provider conducting the HST. 
 
You can find this information in Medicare's Local Coverage Article: Polysomnography and Sleep Studies ? 
Medical Policy Article (A53019). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.