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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: 
     a. Type I polysomnography (PSG) is covered when used to aid the diagnosis of OSA in beneficiaries who 
have clinical signs and symptoms indicative of obstructive sleep apnea (OSA) if performed attended in a sleep 
lab facility. 
 The most comprehensive is designated Type I attended facility based polysomnography (PSG), which is 
considered the reference standard for diagnosing OSA. Attended facility based polysomnogram is a 
comprehensive diagnostic sleep test including at least electroencephalography (EEG), electro-
oculography (EOG), electromyography (EMG), heart rate or electrocardiography (ECG), airflow, 
breathing/respiratory effort, and arterial oxygen saturation (SaO2) furnished in a sleep laboratory 
facility in which a technologist supervises the recording during sleep time and has the ability to 
intervene if needed. 
 Overnight PSG is the conventional diagnostic test for OSA. The American Thoracic Society and the 
American Academy of Sleep Medicine have recommended supervised PSG in the sleep laboratory over 
2 nights for the diagnosis of OSA and the initiation of continuous positive airway pressure (CPAP). 
     b. Type II 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. 
 Type II monitors have a minimum of 7 channels (e.g., EEG, EOG, EMG, ECG-heart rate, airflow, 
breathing/respiratory effort, SaO2)-this type of device monitors sleep staging, so apnea-hypopnea index 
(AHI) can be calculated). 
     c. 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.  Type III monitors have a minimum of 4 monitored channels including ventilation or airflow (at least 
two channels of respiratory movement or respiratory movement and airflow), heart rate or ECG, and 
oxygen saturation. 
      D. 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. 
 Type IV devices may measure one, two, three or more parameters but do not meet all the criteria of a 
higher category device. 
 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. 
The rules also say that a polysomnography is not covered for the diagnosis of patients with chronic insomnia. 
You can find this information in the Local Coverage Determination (LCD) for Polysomnography and Other 
Sleep Studies (L36861). 
 
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.