April 18, 2018 Healthcare Fraud
Sleep Labs and False Claims Act Violations
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The American Academy of Sleep Medicine (“AASM”) recognizes a number of different sleep disorders which, taken together, affect millions of Americans. Some of the most common disorders are insomnia, narcolepsy/excessive daytime sleepiness, restless leg syndrome, REM behavior disorders, and obstructive sleep apnea (“OSA”).
In particular, OSA is when a patient’s airways collapse during sleep causing an obstruction, and the patient is unable to push adequate air past the obstruction. Further, there are certain illnesses referred to as comorbidities which are caused and/or worsened by OSA. The most common types of comorbidities are heart disease, high blood pressure, and Type II diabetes.
How are Sleep Disorders Diagnosed?
The most common tool used to diagnose sleep disorders, particularly OSA, is polysomnographic diagnostic sleep testing (“PSG Test”). The PSG Test is a comprehensive recording of the biophysiological changes that occur during sleep. For the PSG Test, a patient will stay overnight at a sleep lab, sleeping with approximately 30 leads connected to the patient’s body to monitor several body functions, including heart rhythm, breathing, and body movement.
The result of this PSG Test is known as a polysomnogram. The polysomnogram is scoredbased on different criteria using the Apnea Hyponea Index (“AHI”) or the Respiratory Distress Index (“RDI”).
AHI and RDI Scores
In its simplest form, AHI and RDI scores record the average number of respiratory events meeting specific criteria – apneas (complete cessation of breathing for 10 or more seconds) or any hyponeas (partial breathing obstruction for 10 or more seconds) – experienced by the patient per hour of sleep. The apneas and hyponeas must meet certain criteria to be scoreable.
An AHI or RDI score of 5-15 events per hour is classified as mild OSA, 15-30 events per hour as moderate OSA and 30 or more events as severe OSA. However, if a patient has significant comorbidities, then a lower AHI or RDI score qualifies the patient as having moderate or severe OSA.
Once scored, the physician interprets the test and determines whether to prescribe a subsequent CPAP Titration study (“CPAP Study”) and CPAP equipment, a medical device used to keep a patient’s airway open during sleep so that unobstructed breathing becomes possible.
The CPAP Study is similar to the PSG Test, except that the CPAP Study involves the patient wearing the CPAP device, which is a mask connected to a machine, so that a technologist can determine the proper settings for the CPAP device to be used at home.
Sleep Labs & The Federal False Claims Act
Medicare, Medicaid and other federal healthcare programs only reimburse for medically necessary sleep tests, including PSG and CPAP tests. [i] The tests are not covered if they are “not reasonable and necessary for the diagnoses or treatment of illness or injury or to improve the functioning of a malformed body member[.]” [ii] Similarly, Medicare only reimburses for medically necessary CPAP equipment. [iii] Submitting a claim for tests or equipment that are not “reasonable and necessary” violates the federal False Claims Act.
The federal government has identified fraud related to sleep testing as a particular area warranting investigation and oversight. These tests are expensive for the government to reimburse, with each PSG Test costing the government approximately $648, each CPAP Test approximately $691, and approximately $88 for each CPAP device.
If you are worried that a sleep lab is committing fraud, contact a Berger Montague qui tam attorney for free.
Requirement #1: Sleep Tests Must be Performed by Sleep Technologists
To be considered “reasonable and necessary,” the government has imposed several requirements. First, Medicare, Medicaid and other federal healthcare programs require that polysomnographic sleep tests be performed only by licensed or certified sleep technologists (if not by physicians) in order to qualify for reimbursement for such testing services. [iv] The purpose of this rule is “to ensure that beneficiaries are receiving the quality of care that can only be administered by appropriately licensed or credentialed nonphysician personnel.” [v]
Specifically, Medicare only reimburses for sleep tests performed by nonphysician personnel who possess the appropriate license or certification by the State, or credentialing by a national credentialing body:
[a]ny non-physician personnel used by the IDTF [Independent Diagnostic Testing Facility] to perform tests must demonstrate the basic qualifications to perform the tests in question and have training and proficiency as evidenced by licensure or certification by the appropriate State health or education department. In the absence of a State licensing board, the technologist must be certified by an appropriate national credentialing body. The IDTF must maintain documentation available for review that these requirements are met. [vi]
Which Credentials Does Medicare Recognize?
Recognized credentialing agencies include the Board of Registered Polysomnographic Technologists (“BRPT”) that provides Registered Polysomnography Technologist (“RPSGT”) credentials and the American Board of Registration of Electroencephalographic and Evoked Potential Technologists (“ABRET”) that provides Registered Electroencephalographic Technologist (“R. EEG T.”) Polysomnography credentials.
Credentialing can also occur because the test is performed in a sleep center or laboratory accredited by the American Academy of Sleep Medicine (“AASM”) or the Joint Commission on Accreditation of Healthcare Organizations (“JCAHO”).
The American Board of Sleep Medicine (“ABSM”) also provides credentialing in sleep technology, and the National Board for Respiratory Care, Inc. (“NBRC”) provides specialty examination for respiratory therapists performing sleep disorders testing and therapeutic intervention (Certified Respiratory Therapist-Sleep Disorder Speicalist (“CRT-SDS”) and Registered Respiratory Therapist-Sleep Disorder Specialist (“RRT-SDS”)). [vii]
Furthermore, federal regulations require that the independent diagnostic testing facility (“IDTF”) certify in its enrollment application that it has technologists on staff who maintain the appropriate credentials to perform the services provided, [viii] and failure to comply may result in the revocation of a providers billing privileges. [ix]
Requirement #2: Physician Supervision
Second, sleep tests must be performed under an appropriate level of physician supervision. [x] For most diagnostic tests, including PSG Tests, “general supervision” by a physician is required. [xi] Although, to satisfy the criteria for providing “general supervision,” a physician is not required to be present during the performance of the test, the physician must exercise overall direction and control over the procedure. Additionally, the supervising physician is responsible for the training of nonphysician personnel who actually conduct the tests. [xii]
Requirement #3: PSG Test Score
Third, in order for a CPAP Study to be considered reasonable and necessary and reimbursed by Medicare, the patient must have achieved a certain score on the initial PSG Test. To be eligible for a CPAP Test, a patient must have an AHI or RDI greater than or equal to 15 events per hour, or an AHI or RDI greater than or equal to 5 events 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. [xiii]
Requirement #4: Neutral CPAP Suppliers
Finally, because it constitutes a violation of the Stark Act, [xiv] Medicare prohibits reimbursement to self-interested CPAP suppliers. CMS prohibits Medicare payment “to the supplier of a CPAP device if that supplier, or its affiliate, is directly or indirectly the provider of the sleep test used to diagnose the beneficiary with obstructive sleep apnea.” [xv] CMS instituted this payment prohibition because self-interested suppliers are motivated to conduct more sleep tests than are medically necessary and to interpret the results with a bias towards prescribing CPAP devices. [xvi]
Sleep Study Fraud Warning Signs and Resulting False Claims Act Violations
- Excessive ordering of PSG and CPAP testing
- Sleep tests being performed by anyone other than certified technicians or physicians
- No oversight of sleep tests by a physician
- Sleep tests conducted in home but billed as in-lab
- Sleep tests being scored on the fly, meaning while the test is being administered as opposed to analyzing data afterwards
- PSG Tests being scored liberally or skewed upward with pressure put on the tester to qualify patients for CPAP Testing
- CPAP equipment being provided by the sleep test lab or by an entity owned, directly or indirectly, by the same owner as the sleep test lab
Contact Us to Learn More
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[i] 42 U.S.C. § 1395y(a)(1)(A). TRICARE Policy Manual, 6010.54-M Chap. 11 Sect. 12.1(II)(C)(7) (TRICARE does not cover services if the provider does not meet the Medicare conditions of participation or conditions of coverage for substantially comparable services).
[iii] 42 C.F.R. § 410.38(a) and CMS Online Manual 100-2 “Benefit Policy Manual,” Chapter 12, § 110.1C (Noting that to be covered by Medicare, the CPAP or BiPAP device must be “necessary and reasonable for treatment of an illness or injury” and payment will be barred “for equipment which cannot reasonably be expected to perform a therapeutic function in an individual case.”
[iv] 42 C.P.R. § 410.33(c); TRICARE Policy Manual, 601O.S4-M Chap. 11, Sect. 12.1 (II)(C)(3)(TRICARE does not cover services if a technologist is neither “licensed by the state in which the procedure is rendered or who is certified by a Qualified Accreditation Organization.”).
[v] Medicare Program Payment Policies, 73 Fed. Reg. 69726, *88 (November 19, 2008) (to be codified at 42 C.F.R. pt. 405, 409-411, 413-41 S, 423, 424, 48S, 486, and 489).
[vi] 42 C.F.R. § 410.33(c).
[vii] LCD No. L29949, “Local Coverage Determination (LCD) for Polysomnography and Sleep Testing.
[viii] 42 C.F.R. § 410.33(g)(12).
[xiv] The OIG, in its Semiannual Report to Congress for the period April 1, 2012 – September 30, 2012 issued on November 2012, 91 rejected a proposal to create a safe harbor to the Stark Act “protecting remuneration associated with the distribution of durable medical equipment by physicians who have been certified by the American Board of Sleep Medicine to Medicare patients for use in the treatment of obstructive sleep apnea and a corresponding waiver of the application of the physician self-referral law.”
[xv] 42 C.F.R. § 424.57(f). CMS broadly defines a CPAP device: “Continuous positive airway pressure (CPAP) device means a machine that introduces air into the breathing passages at pressures high enough to overcome obstructions in the airway in order to improve airflow,” This broad definition includes BiPAP devices as well.
[xvi] See 73 Fed. Reg. § 69726, 69856-69857 (“We believe that Medicare beneficiaries and the Medicare program are vulnerable if the provider of a diagnostic test has a financial interest in the outcome of the test itself. This creates incentive to test more frequently or less frequently than is medically necessary and to interpret a test result with a bias that favors self-interest.”
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