Home Sleep Testing – Portable PSGs Come Full Circle – Jeff Kuznia

Home Sleep Testing – Portable PSGs Come Full Circle

Those of us who have been in the field a long, long time remember when a number of products were available and in use in the U.S. to provide home sleep testing, both attended and unattended. Back in the late ‘80’s and early 90’s many recorders were used for portable sleep testing, including the old Healthdyne Nightwatch system, the CNS Poly-G, the Vitalog portable monitoring systems and the Compumedics P-Series units. Medicare and other third-party payers covered portable sleep studies recorded with these systems. The use of home sleep testing was already controversial at that time, with the American Sleep Disorders Association weighing in against its routine use.1

In 1995 Healthcare Financing Authority (HCFA), now the Centers for Medicare and Medicaid Services (CMS) published their National Coverage Determination (NCD) that limited sleep testing as part of the process to qualify for continuous positive airway pressure (CPAP) therapy, to only attended, in-lab sleep studies. One of the expectations was that the question of the validity and efficacy of in-home, unattended sleep studies would be addressed through the completion of the Sleep Heart Health Study (SHHS)2 which used the Compumedics P-Series to record unattended sleep studies on almost 6,000 participants around the U.S. Though the SHHS was very successful epidemiologically, it has been referred to in only a limited manner in the home sleep testing debate because it used a Type II recorder and required a trained technician to set it up on the patient.

So since 1995, the use of portable recorders in home sleep testing have been limited to research, to self-pay patients, and to organizations that do not receive third-party reimbursement such as the Kaiser Permanente Healthcare System and the Veteran’s Administration Medical Centers.

On March 14th, CMS published its final NCD CAG-00093R2 CPAP Therapy for OSA (240.4),3 which was modified from its initial proposed decision posted in November, 2007. The NCD reverses the policy of the past 12 years and once again allows home sleep testing in the evaluation of patients who may benefit from CPAP.

Why the Change?

CPAP is now accepted by CMS as an effective treatment in most cases of obstructive sleep apnea (OSA). The focus of CMS has changed from one of determining who has OSAusing a “gold-standard” method to, how can we get as many people on CPAP who may benefit from it, knowing that in-lab PSG’s are in fact not a gold-standard method (though they provide the highest level of confidence in the diagnostic process).

The basic approach of the NCD is that patients are evaluated clinically and if they have symptoms and risk factors for obstructive sleep apnea, a sleep study is performed, either in the lab or at home. If the results of the sleep study are consistent with OSA (AHI or RDI >= 15, or >= 5 with additional documentation of symptoms such as excessive daytime sleepiness, impaired cognition, hypertension, ischemic heart disease, etc.) then CPAP treatment may be ordered. Physicians who use HST must be able to provide appropriate CPAP treatment, which still requires an in-lab titration study. The use of autotitrating CPAP systems in the home may be an appropriate approach and the recent AASM Practice Parameter for Auto-CPAP,4 but the use of these systems for titration is not addressed in the NCD and historically, CMS has not paid for the use of these devices.

Home Sleep Testing is now acceptable and CMS has now turned the debate over to the local CMS contractors and the third-party insurance payers to determine what the most appropriate and cost-effective approach will be to manage patients with clinical symptoms suggestive of obstructive sleep apnea.

National Coverage Determinations vs Local Coverage Determinations

CMS handles payment for medical services through intermediary carriers called contractors. Many are arms of existing insurance companies such as Blue Cross/Blue Shield, but some are not. The Medicare Modernization Act of 2003 requires that CMS reduce the number of contractors to 15 in the next few years. Each CMS contractor handles a specific geographic area, a number of states with some states split between two or more contractors. For example, Noridian manages and processes claims for a number of Rocky Mountain States.

CMS generates regulations and guidelines for coverage of medical services on a national scale – setting the minimum requirements coverage to ensure that all Medicare patients have the ability to be evaluated and treated cost-effectively and according to current medical practice. These regulations are referred to as National Coverage Determinations (NCD’s). The local contractors have the ability to publish more specific guidelines for coverage in their respective geographic areas. These guidelines are referred to as Local Coverage Determinations (LCD’s) and they are used to clarify or add conditions to restrict payment for services covered in the NCD. Normally the LCD will clarify which CPT codes and ICD-9 codes are required for medical necessity to be established, what constitutes a valid claim (when, where and by whom the service is provided) and any provider requirements. These requirements may be more restrictive than the NCD as long as they do not restrict the ability of a person covered by Medicare to get the care and treatment deemed appropriate in the NCD.

A recent LCD on polysomnography by Empire Medical Systems, a CMS contractor for about 12 states, clarified their requirements for coverage of diagnostic sleep studies, including coverage for home sleep testing. In their LCD they made the statement that they would only pay for home sleep studies that use recorders that meet the specific requirements for the CPT Code 95806 (which requires measurement of ventilation, respiratory effort, ECG or heart rate and oximetry).

LCD’s may be revised every 90 days and it is likely that all of them will be revised within 2 or 3 months since the March 14th posting of the final NCD on CPAP.

Payment for HST Services

As with all of healthcare, there is an economic consideration in determining what services to provide and how to provide them. Current reimbursement for unattended sleep studies falls under CPT Code 95806, which requires a Type III (or a Type II) device be used (until this recent change in the NCD, this code has never been reimbursed by HCFA or CMS). It would not cover the use of a Type IV device, which means that CMS will not pay for a Type IV device, since it does not have a billing code. Most other insurance companies use the same codes so it may be that studies with Type IV devices will not be paid until a new code is defined by the American Medical Association, in which case CMS would pay less than the $210 that should now be paid for the 95806 code.

Recently, CMS published new “G-Codes” for Home Sleep Testing based on the type of device used for the study under its Healthcare Common Procedure Coding System (HCPCS) system. (http://www.cms.hhs.gov/HCPCSReleaseCodeSets/ 02_HCPCS_Quarterly_Update.asp). The Level II HCPCS codes, primarily represent items and supplies and non-physician services not covered by the American Medical Association’s Current Procedural Terminology-4 (CPT-4) codes; Medicare, Medicaid, and private health insurers use HCPCS procedure and modifier codes for claims processing. These will likely be in effect while CPT-4 codes are developed. The codes are described below:

G0398 Home sleep test/type II Portable 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.

G0399 Home sleep test/type III Portable 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.

G0400 Home sleep test/type IV Portable Home sleep test (HST) with type IV portable monitor, unattended; minimum of 3 channels.

Relative Value Units (RVU) have not been published for these codes at the time this editorial was written, so the actual reimbursement amount is unknown, though it is logical to expect that there will be higher reimbursement for Type II than Type III and Type III than Type IV.

What Should I Do?

First, in the words of the Hitchhiker’s Guide to the Galaxy,5 “Don’t Panic”. This is much like the change in Respiratory Care that occurred in the late 1970´s when we found out that IPPB (Intermittent Positive Pressure Breathing) was not any more effective than deep breathing and coughing and all the respiratory therapists (or inhalation therapists, as we were called at the time) thought they were going to be out of a job.

It is worth considering what the most probable long-term outcome of this change might be. If we have expanded the ability to evaluate, diagnose and treat the large population of people who present with classic obstructive sleep apnea in a cost effective manner using home sleep testing (provided by knowledgeable technical staff) and autotitrating CPAPsystems, then the in-lab sleep beds will be more available to evaluate more complex sleep disorders and to manage the larger number of patients with sleep disorders that have had inconclusive home sleep tests.

Home sleep testing, just like in-lab sleep testing is a diagnostic tool, which should be used when a physician who understands sleep medicine finds them appropriate. It is prudent then to be prepared to provide this service out of most established sleep centers. Start by evaluating and selecting the HST equipment and adding the policies and procedures to your operation to provide HST’s.

Expect that many, if not all, CMS contractors will be updating their LCD’s related to CPAP and polysomnography in the next 60 to 90 days.

Expect that payment for HST’s using Type II devices will be at a higher rate than Type III and Type III studies will be reimbursed at a higher rate than Type IV. This may influence your decision on which HST recording system to purchase.

If you are intending on pursuing or renewing your sleep laboratory or sleep center accreditation through the AASM, you may want to pay attention to the AASM “Clinical Guidelines for the Use of Unattended Portable Monitors in the Diagnosis of Obstructive Sleep Apnea in Adult Patients”6 to ensure compliance of your policies and procedures.

What Next?

Home sleep testing is only one part of the changes we should expect in the next few years. The role of autotitrating CPAP and its use in conjunction with sleep testing (in the lab or in the home) will certainly develop as more studies are completed following the requirements spelled out in the recent NCD. The use of dental oral appliance therapy may increase as this has shown to be effective in certain populations of OSA patients, with evidence of higher long-term compliance levels.

To put things in a different perspective, and as a wise person once told me, “patients do not need sleep tests, they need sleep physicians”. The sleep study is just a tool for the physician and, as technology moves forward, new tools will be devised. It is the role of the sleep physician and the trained technical personnel to understand and use the tools to the benefit of the patient. Once again, just like the 1980’s and early 1990’s, sleep testing will be available in many forms to meet the needs of patients.

Jeff Kuznia, RRT, RPFT
Director of Business Development
Compumedics USA
Charlotte, NC


1. American Sleep Disorders Association Report. Standards of Practice Committee. Practice Parameters for the use of portable recording in the assessment of obstructive sleep apnea. Sleep 1994; 17:372–377.

2. Quan SF, Howard BV, Iber C, et al. The Sleep Heart Health Study: design, rationale, and methods. Sleep 1997; 20(12):1077–1085.

3. Decision Memo for Continuous Positive Airway Pressure (CPAP) Therapy for Obstructive Sleep Apnea (OSA) (CAG-00093R2) http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?from2 =viewdecisionmemo.asp&id=204&

4. Morgenthaler TI, Aurora RN, Brown T, et al. Standards of Practice Committee of the AASM. Practice parameters for the use of autotitrating continuous positive airway pressure devices for titrating pressures and treating adult patients with obstructive sleep apnea syndrome: An update for 2007. Sleep 2008; 31(1):141–147.

5. Adams, D (1979). The hitchhikers guide to the galaxy. London: Pan Books.

6. Collop NA, Anderson WM, Boehlecke B, et al. Portable Monitoring Task Force on the American Academy of Sleep Medicine. Clinical Guidelines for the Use of Portable Monitoring Devices in the Diagnosis of Obstructive Sleep Apnea in Adults Patients. J Clin Sleep Med, 2007; 3(7):737–747.

Related Posts