Most—if not all—sleep medicine professionals are aware that a new era of sleep medicine is dawning in America with the recent approval by CMS to reimburse for CPAP based on a home sleep test. In addition, the same March national coverage determination (NCD) changed the rules for qualifying for CPAP. While the final decision memo has been released, questions still remain as to how it will be implemented and interpreted by local carriers and what this landmark decision means for the future of sleep medicine.


If you have not read the March NCD on home testing in its entirety, the entire decision memorandum can be accessed at

[register][/register] [register]Subscribe to Sleep Report to receive updated home testing policy information.[/register]

The main points of the memorandum are as follows:

  • New 12-week CPAP trial period. Coverage of CPAP is now limited to a 12-week period for beneficiaries diagnosed with OSA. Previously, there was no such limit. The memorandum adds that CPAP coverage may continue for those “beneficiaries diagnosed with OSA whose OSA improved as a result of CPAP during this 12 week period.”1
  • PSG is no longer considered to be the gold standard test for OSA. Under the review of evidence section, the NCD states, “PSG is utilized as a reference standard in many clinical trials; however, we do not believe it is a true gold standard.”1
  • A clinical evaluation and a type II, type III, or a type IV device may now qualify Medicare patients for CPAP. Previously, CMS considered attended PSG as the only reimbursable method for CPAP qualification.
  • Type IV devices have been redefined by CMS as one with at least three channels. Traditionally, type IV devices were defined as having only one or two channels that typically includes oximetry, but not oximetry alone.
  • AHI and RDI limits redefined. CMS now defines a positive test for OSA as “an AHI or RDI greater than or equal to 15 events per hour, or an AHI or RDI 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.”1

Previously, the RDI parameter was not included. Also, the fact that RDI is measured “per hour” (rather than “per hour of sleep”) is an allowance for portable monitors that do not detect sleep, but extrapolate the RDI based only on the time period that the recorder is switched on.

  • CMS no longer requires the diagnostic study record a minimum of 2 hours of continuous sleep before making a diagnosis of OSA.
  • Moderate to severe OSA diagnosis rule has been eliminated. With this rule eliminated, more patients will be eligible for CPAP.
  • Coverage with Evidence Development (CED). Patients who do not qualify for CPAP under the new guidelines may have limited CPAP coverage when CPAP is used in the context of a clinical study that meets certain Medicare protocols.


The preceding outline heralds a new era for sleep medicine in the United States. However, the CMS decision memo leaves many unanswered questions about how to effectively implement the new policy. It is unclear whether CMS or individual local coverage determinations (LCDs) will further define the following:

  • Physician qualifications to interpret a home sleep test.

Though CMS requires that a physician prescribe a home sleep test, it does not require that the physician have any specific qualifications to interpret the test. The NCD does refer to the government’s March 2008 revised National Guidelines for OSA, which states, “The diagnosis and treatment of OSAHS should be managed by a physician with proper knowledge in this area. Such physicians may include primary care providers, or specialists such as pulmonologists, neurologists, otolaryngologists, psychiatrists, or cardiologists.”2

David P. White, MD, professor of medicine at Harvard Medical School and chief medical officer for Respironics Inc, Murrysville, Pa, believes that CMS’s current level of home testing reimbursement—around $202 for the global technical and physician fee—is too low to encourage primary care physicians to manage home testing.

White says, “If you’re a primary care doctor, you’re not going to do it just for the fun of it. For $200, you have to schedule the test, get the [testing device], have the person take it out and bring it back, score it, look at it, interpret it, send [the report] out. You’re not going to make money on that.”

The other deterrent for primary care physicians with little or no sleep training trying to interpret home tests is that they risk the wrath of a Medicare audit.

A draft LCD by Highmark Medical Services, the local CMS contractor for Pennsylvania, Maryland, District of Columbia, New Jersey, and Delaware, gives a stern warning to physicians prescribing sleep testing. The draft LCD says, “Physicians who perform, supervise, and/or interpret the studies must be capable of demonstrating training and experience specific to the study performed or interpreted and maintain documentation for post-payment audit.” It further states that staffers who assist in rendering sleep services are considered “incident to” the physician’s services.3

Whether the other LCDs follow with similar language remains to be seen.

  • “Clinical evaluation” remains undefined.

Other than stating that a patient must have a clinical evaluation and a diagnostic test to qualify for CPAP, the NCD does not define the limits of a valid clinical evaluation for OSA. There is no requirement that the physician first rate the patient based on the Epworth Sleepiness Scale, Functional Outcomes of Sleep Questionnaire score, or any other clinical criteria such as snoring or being overweight. Thus far, none of the LCDs have either, though Highmark does list clinical symptoms of sleep apnea in its draft LCD.

  • “Benefit” or “improvement” is not defined in regard to the 12-week CPAP trial period.

The omission of any clear clinical requirements of a CPAP trial patient “benefiting” or showing “improvement” within the 12-week period in order to continue therapy is disconcerting to many sleep professionals. Similarly, there are no minimum requirements for compliance, though most modern CPAP machines provide usage data.

Sleep professionals such as White are concerned by this compliance delineation. He says, “I’m not saying they’re going to do this, but what if CMS comes out and says that patients have to use CPAP 5 hours a night, or we’re not going to pay for it. Tons of people use it less than 5 hours, so then they’d take it away. It would create a whole population of people who would not be treated at all, because how you define compliance is where you cut these things off.”

  • There is no clear clinical requirement for CPAP titration and there is no extra compensation for autotitrating devices.

The NCD does not state a method for patient titration, but under the background section with the subheading “CPAP Treatment,” the text seems to question the need for manual titration in a sleep laboratory. The text says that “the long-held belief that fixed-pressure CPAP therapy is the standard is being challenged. The pressure required to maintain upper airway patency in patients with OSA varies throughout the night depending on body position (Jokic, Klimaszewski et al. 1999), sleep state and other factors. Also, CPAP requirements may change over time due to changes in upper airway properties as well as variation in body weight.”1 In the next paragraph, the text continues, “A number of studies have been done which have shown that the use of autotitration CPAP machines, as opposed to fixed-flow CPAP machines, are effective in determining therapeutic CPAP, and as a method of treatment (Berry et al. 2002; Stammnitz et al. 2004; Massie et al. 2003).”1

Consequently, there seems to be the suggestion—but not a mandate—of obtaining titration levels through the temporary, if not permanent, utilization of autotitration flow generators. Nevertheless, automatic units are more expensive than fixed pressure ones, yet CMS has not to date added any extra compensation for dispensing autos.

Dominic A. Munafo, MD, DABSM, medical director at home testing service, Sleep Data, San Diego, is less concerned about the lack of mandated titration guidelines than patient follow-up. Sleep Data uses several alternative titration methods, including predictive equations by V. Hoffstein and other equations, as well as auto units.

He says, “The important thing to realize is that no matter what technique you use, you have to pay attention to how the patient is doing and see whether it appears to be working. If it’s not working, then this is where the follow-up becomes important in adjusting that pressure, trouble-shooting whatever issues they might have.” He adds that if all else fails, the patient can be referred for a manual CPAP titration.


As of this writing in mid April 2008, few clarifications have been made by the LCDs. Highmark’s draft—not final—LCD requires interpreting physicians to have sleep training, but is not specific about the extent. The draft also lists clinical symptoms of sleep apnea under the “Covered Indications” section. Otherwise, it adheres to or refers to the NCD and makes no further clarification of CPAP “benefit,” compliance requirements, titration methods, or addition of a CPT code for type IV reimbursement.

The Arrival of Home Testing Billing Codes

According to a CMS posting, HCPCS code G0398 has been assigned to a “home sleep study test (HST) with type II portable monitor, unattended; minimum of 7 channels: EEG, EOG, EMG, ECG/heart rate, airflow, respiratory effort and oxygen saturation.” Type III monitoring, designated by CMS as a “home sleep test (HST) with type III portable monitor, unattended; minimum of 4 channels: 2 respiratory movement/airflow, 1 ECG/heart rate and 1 oxygen saturation,” has been assigned HCPCS code G0399. And for a type IV test, described by CMS as a “home sleep test (HST) with type IV portable monitor, unattended; minimum of 3 channels,” code G0400 has been assigned. While the codes do offer clarification about reimbursement, they have also raised questions; namely, what do these codes mean for local carriers that have published their coverage determinations concerning portable monitoring? “It is our understanding that these new billing codes would invalidate the language added to these LCDs concerning 95806 specifically, and they would need to be revised to include the new procedure codes above,” says Landon Pendleton, director of product development, Instant Diagnostic Systems.

National Government Services, which covers a vast area of the country, has issued a revised final LCD that basically mirrors the NCD with no further clarifications, although it specifically states that unattended sleep studies will not be reimbursed unless it meets the CPT 95806 definition—the type III device definition.

Trailblazer Health Services, Group Health Inc, and Wisconsin Physicians Services Insurance Corporation have thus far not acknowledged the NCD for home studies or the new 12-week trial period, but are expected to do so within the next several months.


The NCD on home testing brings a new era of sleep medicine to America, but it is too early to predict how widespread home testing will affect physicians and patient care. Naturally, the NCD and all LCDs are subject to revisions.

Meanwhile, a recent Wachovia report on sleep laboratory growth has forecast that the expansion in the number of laboratories will begin to slow as a result of sleep labs waiting to see how home testing will impact business.

But others are more optimistic. White says, “If credible people start doing home diagnostics and it’s reimbursed in a reasonable fashion, then we’ll end up diagnosing a lot more patients, and the complicated patients will end up coming into the sleep laboratories. Sleep laboratories will then evolve and develop new techniques that can be used in the laboratory and provide more information—not just about sleep apnea, but circadian rhythm abnormalities—or perhaps diagnose various psychiatric conditions.”

In a podcast with Sleep Review, Alex Chediak, MD, DABSM, president of the AASM, commented, “If you’re putting CPAP on a group of individuals, particularly elderly individuals, where symptom relief is less predictable from CPAP use, and you’re not providing the kinds of support services and educational services that are known to enhance utilization, you might actually have a fair number of Medicare beneficiaries who would not use CPAP, not because they didn’t improve on it, but because they didn’t have the right support system to understand it and use it properly, therefore never had a chance to improve on it. So the worst case scenario is you have a number of sleep apnea patients out there who otherwise would have improved on therapy.”

Terry Murphy, director of sales, North and South America, for Embla, Denver, envisions a growth in outside sleep services that will provide the home tests and board-certified sleep physician interpretations to primary care physicians, who will then prescribe qualifying patients CPAP through the same or other service.

Murphy believes this model will be a win-win-win for the primary care physicians, the sleep laboratories that provide such services, and equipment suppliers. The primary care physicians may see an increase in complex office visits, the sleep companies will have their professional interpretations, and the CPAP providers will increase their market share as a result of more testing.

Despite lingering questions, one thing is clear: portable monitoring is here to stay.

Tor Valenza is a staff writer for Sleep Review. He can be reached at [email protected]


  1. Accessed April 11, 2008.
  2.…. Accessed April 11, 2008.
  3.…html. Accessed April 11, 2008.