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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 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;
    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 this information in Medicare's Local Coverage Determination (LCD): Outpatient Sleep Studies (L35050).

If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.