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Increased Scrutiny on Medicare Sleep Study Payments

Ensuring comprehensive documentation procedures are in place has become increasingly vital for all providers. However, recently compliance plans have become even more important for sleep labs, sleep centers, hospital-based sleep service providers, and non-hospital-based sleep service providers seeking Medicare reimbursement. According to a FY 2013 Department of Health & Human Services (HHS) Office of Inspector General (OIG) report, Medicare payments for sleep study services have dramatically increased since 2001, growing four-fold from $62 million in 2001 to $235 million in 2011. As a result of increased Medicare spending for sleep-related procedures, there is a spotlight on the appropriateness of Medicare-billed services.

Sleep study services encompass issues such as studies for obstructive sleep apnea (the most common sleep disorder), full-night sleep diagnostic studies, split-night studies, and full-night titration studies. Medicare reimburses sleep study providers at prearranged and set rates for polysomnography (the most popular tool utilized to diagnose sleep disorders), applicable services from the inpatient prospective payment system, the outpatient prospective payment system, the Physician Fee Schedule, and a range of sleep studies.

Sleep study service providers receiving Medicare payments should be prepared for the OIG’s scrutiny throughout 2013 by ensuring that claims are made according to Medicare regulations. In order to ensure proper compliance for full Medicare reimbursement, sleep study service providers must follow certain documentation and procedural requirements. Among other requirements, all documentation must provide rationale for services that were provided, as well as rationale for how providers arrived at a billing status. Detailed documentation is more important than ever.

The OIG is committed to monitoring fraudulent claims and identifying Medical providers who overbill Medicare. On January 3, 2013, the Justice Department issued a press release announcing that Florida-based American Sleep Medicine LLC settled a Medicare eligibility payment case for $15,301,341 for knowingly billing Medicare and other programs for sleep diagnostic services completed by technicians without the proper credentials or certifications. The press release explains, “Under federal program requirements for the reimbursement of claims submitted for sleep disorder testing, initial sleep studies must be conducted by technicians who are licensed or certified by a state or national credentialing body as sleep test technicians.”

Medicare reimburses providers for sleep studies for beneficiaries with symptoms of sleep-related disorders such as sleep apnea, narcolepsy, impotence, and insomnia. Medicare and other payors look most carefully for the documentation of medical necessity. In addition, auditors scrutinize compliance with CMS requirements for credentialing, the presence of physician orders, detailed indications of all services, frequency limitations, and CMS Independent Diagnostic Testing Facility (IDTFs) compliance.

As demonstrated above, sleep study providers are facing increased scrutiny and, as such, should ensure that their documentation and billing policies align with Medicare reimbursement requirements. If you need assistance in defending a Medicare audit, or if you need help creating an effective compliance plan for your practice, please contact an experienced health care attorney at 248-544-0888.