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Reimbursements

What's New?

On December 20, 2006, President Bush signed the Tax Relief and Health Care Act of 2006, which avoids the 5% reduction to Medicare physician payments that were set to begin on January 1, 2007. See the 2007 payment rates listed under CPT Coding for Sleep Testing.

On February 1, 2006 – The Budget Reconciliation package was passed; this legislation reverses the 4.4% reduction in Medicare physician payments that became effective January 1, 2006.

The physician fee schedule payments will remain at 2005 rates, as reflected in the payment rates listed under CPT Coding for Sleep Testing.

December 2005 – Since Congress was unable to come to agreement on budget reconciliation legislation prior to the winter holidays, the Centers for Medicare and Medicaid services (CMS) was obligated to impose a scheduled average 4.4% reduction in Medicare physician payments, effective January 1, 2006.

Both the House and the Senate had passed legislation to remove the cuts and maintain physician fee schedule payments at 2005 rates, but differences on other language prevented the bill from being signed into law.

A February 1, 2006 House vote is expected.  The fee schedule amounts for sleep diagnostic procedures on www.sandmansleep.com will be updated immediately following passage or rejection of the budget reconciliation legislation.

What's New Archive

Medicare Payer Settings

Medicare - Hospital Inpatient
Medicare - Hospital Outpatient
Medicare - Skilled Nursing Facility
Medicare - Physician Offices and Freestanding Clinics
Medicare - Durable Medical Equipment

Sandman Elite (PSG) Reimbursement Information

Polysomnography vs. Sleep Studies - General Information
Medicare Policy for Sleep Disorder Clinics (Intermediary and Carrier)

Criteria for Coverage of Diagnostic Tests
Medical Conditions for which Testing is Covered
PSG for Chronic Insomnia is Not Covered
Coverage of Therapeutic Services

CPT Coding for Sleep Testing

Sandman Spyder (EEG) Reimbursement Information

Medicare EEG Coverage Policy
CPT Codes for EEG Testing

Evoked Potential Reimbursement Information

Medicare Evoked Potential Coverage Policy
CPT Codes for Evoked Potential Procedures

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Medicare - Hospital Inpatient

Once a patient's course of treatment requires admission to the hospital, reimbursement is limited to the amount paid on the patient's discharge Diagnosis Related Group (DRG). All costs for administering care for inpatients are included in the DRG payment. Procedures, services and supplies (leads, electrodes, gel, etc.) are not reimbursed separately.

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Medicare - Hospital Outpatient Services

Coverage: There is a published Intermediary Coverage Policy for Sleep Disorder Clinics [Medicare Intermediary Manual, Part 3 (HCFA-Pub 13-3, 3112.5)].
Payment: On August 1, 2000, the Centers for Medicare and Medicaid Services (CMS) implemented a Hospital Outpatient Prospective Payment System (HOPPS) which defines Medicare reimbursement for hospital outpatient services. Within the HOPPS, all existing procedure and HCPCS codes are categorized into an Ambulatory Payment Classification (APC) group and each APC group is assigned a status indicator that defines how the APC will be reimbursed.

Sleep diagnostic, EEG and evoked potential procedures are assigned the status indicator of "S" under HOPPS. This means that these procedures are considered significant procedures for which separate payment is allowed under the HOPPS.

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Medicare - Skilled Nursing Facility (Medicare)

Skilled nursing facilities are reimbursed for Medicare beneficiaries based on the Resource Utilization Group (RUG-III) assigned under the Prospective Payment System for skilled nursing facilities effective 1/1/99. All costs for administering care are included in the RUG-III payment. Most procedures, services and supplies are not reimbursed separately.

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Medicare - Physician's Office and Freestanding Facility

Sleep: There is coverage policy information for sleep testing published in the Medicare Carriers Manual (MCM Section 2055). In addition, several Medicare payers have clarified the coverage issues for sleep diagnostic testing by developing Local Medical Review Policies. Local policies, if available, may be obtained from our Health Care Economics department at 800.645.2891 or from your local Medicare carrier.

Some insurance companies, including Medicare, do not cover unattended sleep studies (CPT code 95806) or portable sleep studies (CPT code 95807) for diagnosis of sleep disorders. Refer to the specific payer policy for details.

EEG: There is no National Coverage Policy for EEG. However, several states have published Local Medical Review Policies for these procedures which, if available, may be obtained from our Health Care Economics department at 800.645.2891 or from your local Medicare Part B carrier.

Evoked Potential: There is a national coverage determination for evoked response tests that measure brain responses to visual, click or other stimuli (Coverage Issues Manual [CIM] 50-31).

CPT only © 2006 American Medical Association. All Rights Reserved.

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Medicare - DME

Some home medical equipment companies may purchase sleep diagnostic equipment as an added service to provide to physicians in their area. No HCPCS coding exists for this type of equipment, and claims for sleep testing billed to a DMERC by a home medical equipment supplier will probably be denied. The physician who actually provides the service should submit the claim for sleep testing to their Medicare Part B carrier. The home medical equipment dealer could bill the physician for equipment usage or rental.

Non Medicare payers may negotiate with DME companies to provide home sleep diagnostic services. Check with the insurance carrier in question to obtain coverage and payment information and prior authorization before providing these services.

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Polysomnography vs. Sleep Studies - General Information

"Sleep studies and polysomnography refer to the continuous and simultaneous monitoring and recording of various physiological and pathophysiological parameters of sleep for 6 or more hours with physician review, interpretation and report. The studies are performed to diagnose a variety of sleep disorders and to evaluate a patient's response to therapies such as nasal continuous positive airway pressure (NCPAP). Polysomnography is distinguished from sleep studies by the inclusion of sleep staging which is defined to include a 1-4 lead electroencephalogram (EEG), an electrooculogram (EOG), and a submental electromyogram (EMG). Additional parameters of sleep include: 1) ECG; 2) airflow; 3) ventilation and respiratory effort; 4) gas exchange by oximetry, transcutaneous monitoring, or end tidal gas analysis; 5) extremity muscle activity, motor activity-movement; 6) extended EEG monitoring; 7) penile tumescence; 8) gastroesophageal reflux; 9) continuous blood pressure monitoring; 10) snoring; 11) body positions, etc."

Source: Current Procedural Terminology CPT 2005, Professional Edition, American Medical Association, Chicago, IL

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National Policy for Sleep Disorder Clinics

[(Intermediary Manual, Part 3 (HCFA-Pub 13-3, 3112.5))); Medicare Carriers Manual (MCM) Section 2055]
Sleep Disorder Clinics. Sleep disorder clinics are facilities in which certain conditions are diagnosed through the study of sleep. Such clinics are for diagnosis, therapy, and research. Sleep disorder clinics may provide some diagnostic or therapeutic services, which are covered under Medicare. These clinics may be affiliated either with a hospital or a freestanding facility. Whether a clinic is hospital-affiliated or a freestanding clinic, coverage for diagnostic services under some circumstances is covered under provisions of law different from those for coverage of therapeutic services.

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Criteria for Coverage of Sleep Diagnostic Tests

All reasonable and necessary diagnostic tests given for the medical conditions listed below 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 sleep 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 orders.
• The need for diagnostic testing is confirmed by medical evidence, e.g., physician examinations and laboratory tests.

Diagnostic testing that is duplicative of previous testing done by the attending physician to the extent the results are still pertinent is not covered because it is not reasonable and necessary under §1862(a)(1)(A) of the Act.

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Medical Conditions For Which Sleep Testing is Covered

Sleep diagnostic testing is covered only if the patient has the symptoms or complaints of one of the conditions listed below. Most of the patients who undergo the diagnostic testing are not considered inpatients, although they may come to the facility in the evening for testing and then leave after their tests are over. The overnight stay is considered an integral part of these tests.

Narcolepsy

This term refers to a syndrome that is characterized by abnormal sleep tendencies, e.g. excessive daytime sleepiness or disturbed nocturnal sleep. Related diagnostic testing is covered if the patient has inappropriate sleep episodes or attacks (e.g., while driving, in the middle of a meal, in the middle of a conversation), amnesiac episodes or continuous disabling drowsiness. The sleep disorder clinic must submit documentation that this condition is severe enough to interfere with the patient's well being and health before Medicare benefits may be provided for diagnostic testing. Ordinarily, a diagnosis of narcolepsy can be confirmed by three sleep naps. If more than three sleep naps are claimed, you must submit persuasive medical evidence justifying the medical necessity for the additional test(s). Use HCPCS procedure codes (95828*) and 95808.

*Code 95828 deleted. Substitute codes 95807, 95808 or 95810.

CPT only © 2006 American Medical Association. All Rights Reserved.

Sleep Apnea

This is a potentially lethal condition where the patient stops breathing during sleep. Three types of sleep apnea have been described (central, obstructive, and mixed). The nature of the apnea episodes can be documented by appropriate diagnostic testing. Ordinarily, sleep apnea can be diagnosed by a single polysomnogram and EEG. If more than one such testing session is claimed, you must submit persuasive medical evidence justifying the medical necessity for the additional tests. Use HCPCS procedure codes (95828*) and 95822.

*Code 95828 deleted. Substitute codes 95807, 95808 or 95810.

CPT only © 2006 American Medical Association. All Rights Reserved.

Impotence

Diagnostic nocturnal penile tumescence testing may be covered, under limited circumstances, to determine whether erectile impotence in men is organic or psychogenic. Although impotence is not a sleep disorder, the nature of the testing requires that it be performed during sleep. The tests ordinarily are covered only where necessary to confirm the treatment to be given (surgical, medical or psychotherapeutic). Ordinarily, a diagnosis may be determined by two nights of diagnostic testing. If more than two nights of testing are claimed, you must submit persuasive medical evidence justifying the medical necessity for the additional tests. Have your medical staff review questionable cases to ensure that the tests are reasonable and necessary for the individual. Use HCPCS procedure code 54250. (See § 35-24 of the Coverage Issues Manual for policy on coverage of Diagnosis and treatment of impotence.)

CPT only © 2006 American Medical Association. All Rights Reserved.

Parasomnia

Parasomnias are a group of conditions that represent undesirable or unpleasant occurrences during sleep. Behavior during these times can often lead to damage to the surroundings and injury to the patient or to others. Parasomnia may include conditions such as sleepwalking, sleep terrors, and REM sleep behavior disorders. In many of these cases, the nature of these conditions may be established by careful clinical evaluation. Suspected seizure disorders as possible causes of the parasomnia are appropriately evaluated by standard or prolonged sleep EEG studies. In cases where seizure disorders have been ruled out and in cases that present a history of repeated violent or injurious episodes during sleep, polysomnography may be useful in providing a diagnostic classification or prognosis. Use HCPCS procedure codes (95828*) and/or 95822.

*Code 95828 deleted. Substitute codes 95807, 95808 or 95810.

CPT only © 2006 American Medical Association. All Rights Reserved.

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PSG for Chronic Insomnia is Not Covered

Evidence at the present time is not convincing that polysomnography in a sleep disorder clinic for chronic insomnia provides definitive diagnostic data or that such information is useful in patient treatment or is associated with improved clinical outcome. The use of polysomnography for diagnosis of patients with chronic insomnia is not covered under Medicare because it is not reasonable and necessary under § 1862(a)(1)(A) of the Act.

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Coverage of Therapeutic Sleep Services

Sleep disorder clinics may at times render therapeutic as well as diagnostic services. Therapeutic services may be covered in a hospital outpatient setting or in a freestanding facility provided they meet pertinent requirements for the particular type of services, are reasonable and necessary for the patient, and are performed under the direct personal supervision of a physician.

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CPT Coding for Sleep Testing

Following is a list of common CPT codes for sleep testing from the American Medical Association CPT 2004 Manual. Please note that coverage guidelines for sleep diagnostic procedures may vary from region to region. If you have questions, please obtain the policy from your local Medicare carrier. All sleep diagnostic equipment may not perform all parameters described by the CPT codes below. Please refer to the Sleep Studies vs. Polysomnography section for further definition of the parameters described.

Report codes with a -52 modifier if less than 6 hours of recording or in other cases of reduced services as appropriate.

CPT Codes for Sleep Diagnostic Testing

For payment information, click on the code.

*Existence of CPT codes does not guarantee coverage or payment for any procedure by any insurance carrier or Medicare. Medical necessity must be established by the patient’s physician in accordance with specific coverage policy guidelines.

CPT only © 2006 American Medical Association. All Rights Reserved.

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Medicare EEG Coverage Policy

Hospital Setting: Local medical review policies (LMRP's) to describe coverage for inpatient or outpatient EEG testing are not available. In the absence of coverage policies, the treating physician should document the medical necessity for EEG testing with appropriate ICD-9 diagnosis codes, the patient's history and symptoms. The existence of CPT codes to describe various EEG procedures does not guarantee coverage of or payment for any EEG procedure by an insurance carrier or Medicare. Medical necessity for these procedures must be established by the patient's treating physician.

Physician Offices and Freestanding Clinics: Local Medical Review Policies for EEG and Neurophysiological Studies have been published by several Medicare Part B payers. Available policies describe the indications and limitations of coverage and/or medical necessity for EEG testing and listings of ICD-9 diagnosis codes that may support the medical necessity for EEG testing. Call our Reimbursement Hotline at (800) 645-2891 to see if a coverage policy has been published for your geographic area. If so, we would be happy to fax you a copy.

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CPT Codes for EEG Testing

For payment information, click on code.

*Existence of CPT codes does not guarantee coverage or payment for any procedure by any insurance carrier or Medicare. Medical necessity must be established by the patient’s physician in accordance with specific coverage policy guidelines.

CPT only © 2006 American Medical Association. All Rights Reserved.

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Medicare Evoked Potential Coverage Policies

Medicare has issued a national coverage determination for Evoked Response Tests (Coverage Issues Manual Section 50-31). Under this coverage determination, evoked response tests, including brain stem evoked response and visual evoked response tests, are generally accepted as safe and effective diagnostic tools, and program payment may be made for these procedures.

Hospital Setting: There are several published local medical review policies (LMRP) which describe coverage for inpatient or outpatient evoked potential testing, primarily for audiology evoked potential testing. Call our reimbursement hotline at (800) 645-2891 to see if a coverage policy has been published for your geographic area. If so, we would be happy to fax a copy to you. In the absence of more universal coverage policies for evoked potential testing, the treating physician should document the medical necessity for evoked potential testing with appropriate ICD-9 diagnosis codes, the patient's history and symptoms. The existence of CPT codes to describe these various procedures does not guarantee coverage of or payment for any procedure by any insurance carrier or Medicare. Medical necessity for the procedure must be established by the patient's treating physician.

Physician Offices and Freestanding Clinics: Local Medical Review Policies for Neurophysiological Studies, Audiology, Somatosensory Testing and Sensory Evoked Potentials include CPT codes for evoked potential procedures and have been published by several Medicare Part B payers. Available policies describe the indications and limitations of coverage and/or medical necessity for evoked potential procedures and listings of ICD-9 diagnosis codes that may support the medical necessity for these procedures. Call our Reimbursement Hotline at (800) 645-2891 to see if a coverage policy has been published for your geographic area. If so, we would be happy to fax you a copy.

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CPT Codes for Evoked Potential Testing

For payment information, click on code.

*Existence of CPT codes does not guarantee coverage or payment for any procedure by any insurance carrier or Medicare. Medical necessity must be established by the patient’s physician in accordance with specific coverage policy guidelines.

CPT only © 2006 American Medical Association. All Rights Reserved.

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