History of Medicare Sleep Coverage

In 1986, CMS (then known as the Health Care Financing Administration) asked the Office of Health Technology Assessment to conduct an assessment of the safety, clinical effectiveness and use of CPAP.

OHTA reported that “the consensus of clinical opinion from the available information appears to be that CPAP can in the majority of cases prevent obstructive sleep apnea and provide substantial clinical improvement with minimal associated morbidity.” OHTA went on further to recommend that “the use of CPAP be covered under Medicare when used in adult patients with moderate and severe OSA who have failed to obtain relief from other noninvasive therapies and for whom surgery would be the only other therapeutic alternative.”

The diagnosis of OSA required at least 30 episodes of apnea, each lasting a minimum of 10 seconds, during six to seven hours of sleep. These specifications were based predominately on expert opinions at the time. Based on the OHTA technology assessment, Medicare issued an NCD (see NCD Manual 240.4) that covered CPAP for adult patients with moderate or severe OSA for whom surgery is a likely alternative (effective date Jan. 12, 1987) and adopted OHTA’s recommendations on the diagnosis of OSA.

Unattended home sleep testing (HST) has been reviewed by CMS since 1989. In 1995, the agency’s reviewing body for the development of national coverage determinations concluded that the safety and effectiveness of home studies used to diagnose sleep disorders were unproven and, thus, should not be covered by the Medicare program. The Technical Advisory Committee recommended that this issue be reconsidered for national policy following the completion of a large study of sleep disorders by the National Institutes of Health. This was to include an evaluation of in-home testing. The study was expected to be completed within two to three years.

Therefore, the coverage of unattended HST was left to carrier discretion.

In 2001, the national coverage policy on CPAP was expanded to include Medicare beneficiaries with an apnea/hypopnea index (AHI) of ≥ 15, or an AHI ≥5 and ≤14 with documented symptoms of excessive daytime sleepiness, impaired cognition, mood disorders or insomnia, or documented hypertension, ischemic heart disease or history of stroke. However, the policy specified that only polysomnography done in a facility-based sleep study laboratory could be used to identify patients with obstructive sleep apnea.

In 2005, CMS determined that the evidence was not adequate to conclude that the use of unattended portable multi-channel sleep testing with a minimum of seven monitored channels including EEG, EOG, EMG, ECG or heart rate, airflow, respiratory effort and oxygen saturation (Type II devices based on the 1994 ASDA classification) was reasonable and necessary in the diagnosis of OSA, and these tests remain noncovered for the diagnosis of OSA.

Throughout 2007, CMS received multiple requests to reconsider the NCD for CPAP therapy for OSA to allow home sleep testing. On March 14, 2007, CMS opened a reconsideration of the NCD. On March 29, 2007, CMS announced that it would convene the Medicare Evidence Development and Coverage Advisory Committee to consider this issue.

On June 25, 2007, CMS posted the initial public comments. On Sept. 12, 2007, CMS held a MedCAC meeting. On Dec. 14, 2007, CMS published a proposed decision and opened a 30-day public comment period. On Jan. 13, 2008, the public comment period ended. On March 13, 2008, the final Decision Memo was issued, which led to subsequent issuance of local coverage determinations.

Final Rule Restricting CPAP Coverage if Supplier Is Involved in Testing

On Nov. 19, 2008, CMS issued a final rule that took effect Jan. 1, 2009, prohibiting Medicare payment for a CPAP device if the CPAP supplier, or its affiliate, was involved in the sleep test. The regulation, found at 411 C.F.R. 424.57 (f), states: “No Medicare payment will be made to the supplier of a CPAP device if that supplier, or its affiliate, is directly or indirectly the provider of the sleep test used to diagnose the beneficiary with obstructive sleep apnea. This prohibition does not apply if the sleep test is an attended facility-based polysomnogram.”

“Affiliate” is defined as “a person or organization that is related to another person or organization through a compensation arrangement or ownership.”

“Sleep test” is defined as “an attended or unattended diagnostic test for a sleep disorder whether performed in or out of a sleep laboratory. The ‘provider of the sleep test’ is the individual or entity that directly or indirectly administers and/or interprets the sleep test and/or furnishes the sleep test device used to administer the sleep test.”

“Attended facility-based polysomnogram” means a comprehensive diagnostic sleep test including at least electroencephalography, electro-oculography, electromyography, heart rate or electrocardiography, airflow, breathing effort and arterial oxygen saturation furnished in a sleep laboratory facility in which a technologist supervises the recording during sleep time and has the ability to intervene if needed.

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