by Jeffrey S. Baird, JD
What do we really know from CMS' latest decision on home sleep testing, and what can we expect to find in the upcoming LCD?
A significant increase in the diagnosis and treatment for obstructive sleep apnea (OSA) over the past several years has led to a surge in the need for sleep studies, and an increase in joint ventures and cooperative arrangements between DME companies, physician offices, and sleep labs. Although DME suppliers are justifiably interested in cooperating with other entities on matters related to sleep testing, the expansion of sleep testing and OSA treatment has led CMS, the OIG, and the program safeguard contractors (PSCs) to more closely scrutinize sleep testing and CPAP utilization than they have in the past. This increased scrutiny has resulted in both positive and negative consequences.
On the positive side, CMS recently announced an anticipated expansion of qualified sleep studies to include unattended sleep studies performed in the patient's home. On the negative side, DME suppliers and sleep labs must be extremely careful in structuring any joint venture arrangements to verify that they meet appropriate federal and state guidelines.
TOOLS AND TACTICS
- Be sure joint venture arrangements with sleep labs meet federal and state guidelines.
- Know that CMS has not yet addressed who will be able to conduct HST on Medicare beneficiaries.
- Look for an LCD in the near future that will outline who can conduct HST on Medicare beneficiaries.
- The July 2007 LCD on CPAP said that a DME supplier may not perform PSG studies and then sell CPAP equipment to patients qualified by the studies.
- It is likely that a DME supplier will not be able to provide the test and sell CPAPs to beneficiaries.
CMS' MARCH 2008 HOME SLEEP TESTING DECISION
On March 13, 2008, CMS published the final Decision Memorandum that expands qualified sleep studies to include unattended sleep studies performed in the patient's home. Relevant portions of the Decision Memo state:
- Coverage of CPAP is initially limited to a 12-week period for beneficiaries diagnosed with OSA. CPAP is subsequently covered for those beneficiaries diagnosed with OSA who benefit from CPAP during this 12-week period.
- CPAP for adults will be covered when diagnosed using a clinical evaluation and a positive: a) polysomnography (PSG) performed in a sleep lab; or unattended home sleep monitoring with a b) Type II device; c) Type III device; or d) Type IV device, measuring at least three channels.
- Diagnostic tests not ordered by the beneficiary's reading physician are not considered reasonable and necessary. Diagnostic tests payable under the physician fee schedule, furnished without the required level of supervision by a physician, are not reasonable and necessary.
- A positive test for OSA is established if either of the following criteria, using the apnea-hypopnea index (AHI) or respiratory distress index (RDI), is met:
- AHI or RDI is greater than or equal to 15 events per hour; or
- AHI or RDI is 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. The AHI is equal to the average number of episodes of apnea and hypopnea per hour. The RDI is equal to the average number of respiratory disturbances per hour.
- If the AHI or RDI is calculated based on less than 2 hours of continuous recorded sleep, the total number of recorded events to calculate the AHI or RDI during sleep testing is at least the number of events that would have been required in a 2-hour period.
- CMS deleted the requirements that an individual have moderate to severe OSA and surgery is a likely alternative.
- CPAP based on clinical diagnosis alone, or using a diagnostic procedure other than PSG, or Type II, Type III, or Type IV home sleep testing (HST) measuring at least three channels, is covered only when provided in the context of a clinical study when that study meets a number of standards (set out in the Decision Memo).
WHO MAY CONDUCT THE HST?
CMS has not yet addressed who will be able to conduct HST on Medicare beneficiaries. This issue will be addressed in the local coverage determination (LCD) to be published in the near future. It is noteworthy that many of the studies cited in the Proposed Decision Memorandum refer to self-administered, unattended HST. Therefore, it is logical to conclude that HST will include self-administration by patients.
PROVIDING HST EQUIPMENT
According to the July 2007 LCD on CPAP, a DME supplier may not perform PSG studies and then sell CPAPs to patients qualified by the studies. It is likely that the same limitation will apply in the HST context; that is, a DME supplier will not be able to provide the test and then sell the CPAP to the beneficiary. However, CMS could approve arrangements similar to those approved for home oximetry testing where an independent diagnostic testing facility (IDTF) is the provider of the test, but uses a DME company to deliver the testing equipment to the beneficiary and subsequently pick up the equipment.
HST BY A SUBSIDIARY?
What about HST conducted by a corporation that is a subsidiary of the DME company? According to the July 2007 LCD on CPAP, only a DME supplier itself is prohibited from performing the PSG study and then subsequently selling the CPAP to the beneficiary. Currently, a subsidiary or affiliated entity of a DME supplier can operate as an IDTF that conducts OSA testing, and the DME supplier can sell CPAPs to qualified sleep study patients—as long as beneficiaries are given a choice of suppliers and the Medicare/Medicaid anti-kickback statute is not violated. Unless the LCD is revised to add language similar to that issued in June 2002 (and then rescinded) that restricted the qualifying test from being performed by an entity with a financial relationship to the DME supplier, it is likely that the same interpretation will apply to HST.
The current CPAP LCD is more lenient than Medicare policies concerning oxygen. Under the oxygen LCD and Medicare, DME suppliers cannot provide oxygen equipment if the supplier has a financial relationship with the entity that performs the qualifying oximetry test. Thus, a DME supplier that has an ownership interest or other financial relationship with the IDTF performing the qualifying oxygen test cannot provide patients with oxygen equipment.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex.
THE ROAD TO HOME TESTING
In 1986, CMS (then known as HCFA) asked the Office of Health Technology Assessment (OHTA) 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 OSA and provide substantial clinical improvement with minimal associated morbidity." They went on 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 non-invasive 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 6 to 7 hours of sleep. These specifications were based predominately on expert opinions at the time. Based on the OHTA technology assessment, Medicare issued an NCD (national coverage determination) [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 January 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 NCDs concluded that the safety and effectiveness of home studies used to diagnosis sleep disorders were unproven, and thus should not be covered by the Medicare program. The TAC recommended that this issue be reconsidered for national policy following the completion of a large study of sleep disorders by the NIH. This was to include an evaluation of in-home testing. The study was expected to be completed within 2 to 3 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 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 PSG done in a facility-based sleep study laboratory could be used to identify patients with OSA.
In 2005, CMS determined that the evidence was not adequate to conclude that the use of unattended portable multichannel 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 remained noncovered for the diagnosis of OSA.
Throughout 2007, CMS received multiple requests to reconsider the 2005 NCD for CPAP Therapy for OSA to allow HST. On March 14, 2007, CMS opened a reconsideration. In September 2007, CMS held a Medicare Evidence Development and Coverage Advisory Committee (MedCAC) meeting to consider this issue. Initial public comments were posted by CMS in June 2007.
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