Reimbursement In The US
Most insurance companies use Medicare guidelines for the reimbursements rates for sleep apnea for setting their own coverage and reimbursement guidelines. Prior to the approval of home diagnosis in 2008 Medicare only covered the use of CPAP in beneficiaries who have been diagnosed with moderate to severe OSA when ordered and prescribed by a licensed treating physician and confirmed by polysomnography (PSG) performed in a sleep laboratory.
CMS (Medicare) Coverage of Sleep Apnea Products
Medicare provides coverage for many sleep apnea products, including a capped rental of CPAP/BiPAP equipment and other supplies. Fee levels vary by state in the U.S., but must fall within a Medicare determined range of fees for each product or service. Medicare covers 80% of that fee, and the patient or private insurer is responsible for the remaining 20% (the co-pay).
Home Sleep Testing expanded under coverage
Previously, Home Sleep Testing (HST) was considered an unproven technology and most third party (insurance) payors would not cover treatment with CPAP when the diagnosis was made using a HST device, or in most cases even pay for the testing itself.
Effective March 2008, CMS issued a National Coverage Determination (NCD) policy stating evidence supported use of HST to establish diagnosis. It revised its reimbursement to allow for coverage of CPAP treatment based upon a positive diagnosis of OSA by HST.
Importantly within this expanded market CMS has the following requirements:
- An initial 12 week period of CPAP coverage for positively diagnosed
- A patient is only covered after the 12 week period if OSA has improved as a result of CPAP treatment during the initial period.
Within this update CMS deleted its distinct requirements that an individual have moderate to severe OSA and that surgery is a likely alternative. The sleep test is ordered by the beneficiary’s treating physician and furnished under appropriate physician supervision.
Replacement of sleep apnea supplies
Medicare covers most CPAP supplies including masks, headgear, tubing, filters, humidifiers, and replacement pillows and cushions. Medicare has guidelines for the receipt of Sleep Apnea related equipment which gives patients the opportunity to replenish their equipment regularly.
APAP and Bi-level Devices Coverage
Coverage and coding for auto titrating CPAP units is currently the same as coding and coverage for conventional CPAP. Medicare’s policy states that Bi-level devices may be covered for patients with a diagnosis of obstructive sleep apnea if CPAP has been “tried and proven ineffective.”
How are PAP machines covered?
CPAPs, APAPs, and BiPAPs are not purchased directly by patients under Medicare guidelines, rather they purchased through Medicare via a 13-month rental process. Medicare is billed on a monthly basis and the machine is then converted to a purchase and owned by the patient at the end of this period.
Alternatively the patient can continue renting this machine and Medicare will pay the provider a monthly rental fee 2 times per year to maintain the positive airway pressure.
Coverage and Reimbursement Requirements
Following a positive diagnosis of OSA a patient is covered for an initial 3 months. Patients covered for the first 3 months of a PAP device must be then re-evaluated to establish the medical necessity of the continued coverage by Medicare beyond the first 3 months:
The re-evaluation that Medicare will base a decision to continue coverage can only be undertaken at a minimum of 31 days after initiating the therapy and no later than 91 days after initiation therapy
Adherence to therapy is defined as use of PAP > 4 hours per night on 70% of nights during a consecutive 30 day period anytime during the first 3 months of initial usage.
Documentation of clinical benefit must be demonstrated by both:
Face-to-face clinical re-evaluation by the treating physician with documentation that symptoms of OSA are improved; and objective evidence of adherence to use of the PAP device reviewed by the treating physician.
Not meeting the above requirements would represent non-compliance for the intended purposes and expectations of benefit for treatment and constitute reason for denial of coverage by Medicare “as not medically necessary”.
Essential further reading: