​​Polysomnography Services Under OIG Scrutiny

September 2nd, 2021 - Raquel Shumway
Categories:   Coding   Audits/Auditing  
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The OIG conducted a study dated June 2019 wherein they indicated that there were approximately $269 million in overpayments for polysomnography services for the period of 2014 through 2015. According to the OIG “These errors occurred because the CMS oversight of polysomnography services was insufficient to ensure that providers complied with Medicare requirements and to prevent payment of claims that didn’t meet those requirements.”

So what are those requirements? According to Medicare (Medicare Benefit Policy Manual, Chapter 15):

“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 testing is over. The overnight stay is considered an integral part of these tests.”

These tests and their requirements are:

  • Narcolepsy – CPT codes 95828 [deleted in 1994 and the CPT codebook for that year says to see 95807-95810] and 95808: If more than 3 sleep naps are required, make sure the documentation justifies the medical necessity for additional testing

  • Sleep Apnea – CPT codes 95807, 95810 and 95822: There are three types — central, obstructive, and mixed.

  • Impotence – CPT codes 54250:This is not a sleep disorder, but the test requires that it be performed during sleep. If more than two nights are required, make sure the documentation justifies the medical necessity for additional testing.

  • Parasomnia – CPT codes 95807, 95810, and 95822: A group of conditions that have undesirable or unpleasant occurrences during sleep (e.g., sleepwalking, sleep terrors, and rapid eye movement (REM). Can be caused by seizure disorders. (See note below)

  • Therapeutic Services: Coverage of polysomnography is sometimes rendered as a therapeutic service as well as a diagnostic service.
    For therapeutic services to be covered the following requirements need to be met
    • Must be done in a hospital outpatient setting or in a freestanding clinic. 
    • Requirements for the type of services rendered must still be met
    • Be supervised by a physician. 
    • Show proper documentation for the services showing it is reasonable and necessary for the patient.

NOTE: Polysomnography for chronic insomnia is NOT covered by Medicare because they do not consider it reasonable and necessary for diagnosing or treating that condition.

NOTE: Documentation, according to Medicare, “requires persuasive medical evidence justifying the medical necessity for any additional testing.” It must show that it is reasonable and necessary for that particular patient.

According to the OIG Report, some of these services did not meet the Medicare requirements and were thus not eligible for payment. The requirements mentioned are:

  • Correct diagnosis codes: Use appropriate or correct diagnosis codes which are sometimes located in the local MAC Article. For example, chronic insomnia is not covered.

  • Documentation: Watch for documentation that is missing, not provided, or is incomplete. Documentation should contain the following:

    • Order from provider who treats the patient for all diagnostic tests (including polysomnography),

    • Name of ordering provider,

    • NPI of ordering provider on the polysomnography claim, and

    • Symptoms or complaints of narcolepsy, sleep apnea, impotence, or parasomnia.
  • Training Certificates: Attending Technicians or Technologists need to have the required credentials and/or training. Be aware that  some LCDs require that technicians or technologists providing a polysomnography service must have appropriate training certificates.
  • Questionable billing practices: Look for patterns that point towards questionable billing practices, such as receiving payments for duplicative services.

Further, CMS states that the following criteria must also be met:

  • The clinic is either affiliated with a hospital or is under the direction and control of physicians. Medicare may cover diagnostic testing routinely performed in sleep disorder clinics even in the absence of direct supervision by a physician
  • Beneficiaries are referred to the sleep disorder clinic b their attending physicians, and the clinic maintains a record of the attending physician’s orders
  • Medical evidence confirms the need for diagnostic testing, 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 isn’t covered because it isn’t reasonable and necessary under §1862(a)(1)(A) of the Act.)

Medicare Benefit Policy Manual  70 - Sleep Disorder Clinics (Rev. 1, 10-01-03) B3-2055

Tip: FindACode.com includes the latest updates and changes to LCDs, and Articles which include comprehensive information  regarding general documentation requirements for this and many other services. CLICK HERE to access the search page for these items. They are also available at the code level (by subscription).

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