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Sleep Disorder Clinics - Coverage for Narcolepsy, Sleep Apnea, Impotence and Parasomnia


Sleep disorder clinics are facilities in which certain conditions are diagnosed through the study of sleep. Such clinics are for diagnosis, therapy, and research. Sleep disorder clinics may provide some diagnostic or therapeutic services, which are covered under Medicare. These clinics may be affiliated either with a hospital or a freestanding facility. Whether a clinic is hospital-affiliated or freestanding, coverage for diagnostic services under some circumstances is covered under provisions of the law different from those for coverage of therapeutic services.

Criteria for Coverage of Diagnostic Tests

All reasonable and necessary diagnostic tests given for the medical conditions are covered when the following criteria are met:

The clinic is either affiliated with a hospital or is under the direction and control of physicians. Diagnostic testing routinely performed in sleep disorder clinics may be covered even in the absence of direct supervision by a physician;

Patients are referred to the sleep disorder clinic by their attending physicians, and the clinic maintains a record of the attending physician’s orders; and

The need for diagnostic testing is confirmed by medical evidence, e.g., physician examinations and laboratory tests.

Medical Conditions for Which Testing is Covered

Diagnostic testing is covered only if the patient has the symptoms or complaints of one of the conditions listed below. Most of the patients who undergo the diagnostic testing are not considered inpatients, although they may come to the facility in the evening for testing and then leave after testing is over. The overnight stay is considered an integral part of these tests.

1. Narcolepsy - This term refers to a syndrome that is characterized by abnormal sleep tendencies, e.g., excessive daytime sleepiness or disturbed nocturnal sleep. Related diagnostic testing is covered if the patient has inappropriate sleep episodes or attacks (e.g., while driving, in the middle of a meal, in the middle of a conversation), amnesiac episodes, or continuous disabling drowsiness. The sleep disorder clinic must submit documentation that this condition is severe enough to interfere with the patient’s well being and health before Medicare benefits may be provided for diagnostic testing. Ordinarily, a diagnosis of narcolepsy can be confirmed by three sleep naps. If more than three sleep naps are claimed, the carrier will require persuasive medical evidence justifying the medical necessity for the additional test(s). It will use HCPCS procedure codes 95828 and 95805.

2. Sleep Apnea - This is a potentially lethal condition where the patient stops breathing during sleep. Three types of sleep apnea have been described (central, obstructive, and mixed). The nature of the apnea episodes can be documented by appropriate diagnostic testing. Ordinarily, a single polysomnogram and electroencephalogram (EEG) can diagnose sleep apnea. If more than one such testing session is claimed, the carrier will require persuasive medical evidence justifying the medical necessity for the additional tests. It will use HCPCS procedure codes 95807, 95810, and 95822.

3. Impotence - Diagnostic nocturnal penile tumescence testing may be covered, under limited circumstances, to determine whether erectile impotence in men is organic or psychogenic. Although impotence is not a sleep disorder, the nature of the testing requires that it be performed during sleep. The tests ordinarily are covered only where necessary to confirm the treatment to be given (surgical, medical, or psychotherapeutic). Ordinarily, a diagnosis may be determined by two nights of diagnostic testing. If more than two nights of testing are claimed, the carrier will require persuasive medical evidence justifying the medical necessity for the additional tests. It will have its medical staff review questionable cases to ensure that the tests are reasonable and necessary for the individual. It will use HCPCS procedure code 54250.

4. Parasomnia - Parasomnias are a group of conditions that represent undesirable or unpleasant occurrences during sleep. Behavior during these times can often lead to damage to the surroundings and injury to the patient or to others. Parasomnia may include conditions such as sleepwalking, sleep terrors, and rapid eye movement (REM) sleep behavior disorders. In many of these cases, the nature of these conditions may be established by careful clinical evaluation. Suspected seizure disorders as possible cause of the parasomnia are appropriately evaluated by standard or prolonged sleep EEG studies. In cases where seizure disorders have been ruled out and in cases that present a history of repeated violent or injurious episodes during sleep, polysomnography may be useful in providing a diagnostic classification or prognosis. The carrier must use HCPCS procedure codes 95807, 95810, and/or 95822.

Polysomnography for Chronic Insomnia Is Not Covered

Evidence at the present time is not convincing that polysomnography in a sleep disorder clinic for chronic insomnia provides definitive diagnostic data or that such information is useful in patient treatment or is associated with improved clinical outcome. The use of polysomnography for diagnosis of patients with chronic insomnia is not covered under Medicare because it is not reasonable and necessary under §1862(a)(1)(A) of the Act.

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