The AASM continues working toward a resolution for members in DME Jurisdiction D as they are reporting Medicare audits leading to claims denials due to seemingly conflicting language in two local coverage determination policies. The two LCDs include language regarding the medical necessity for retesting patients with obstructive sleep apnea (OSA), particularly those who fail to meet the adherence criteria for the initial 12-week trial of positive airway pressure (PAP) therapy and are attempting to requalify for a PAP device.

AASM members continue to undergo repeat audits due to audit failure rates, creating administrative and financial burden. Others are being asked to return CMS reimbursements for medically unnecessary repeat sleep studies, and some are being threatened with a potential loss of Medicare certification, despite auditors being aware of the discrepancy.

Local Coverage Determination L33718, Positive Airway Pressure (PAP) Devices for the Treatment of Obstructive Sleep Apnea (OSA), states, “Beneficiaries who fail the initial 12-week trial are eligible to re-qualify for a PAP device but must have both:

  1. In-person clinical re-evaluation by the treating practitioner to determine the etiology of the failure to respond to PAP therapy; and,
  2. Repeat sleep test in a facility-based setting (Type 1 study). This may be a repeat diagnostic, titration or split-night study.”

Local Coverage Determination L34040, Polysomnography and Other Sleep Studies, states, “Follow-up polysomnography or a cardio-respiratory sleep study is indicated for the following conditions:

  • To evaluate the response to treatment (CPAP, oral appliances or surgical intervention);
  • After substantial weight loss has occurred in patients on CPAP for treatment of sleep-related breathing disorders to ascertain whether CPAP is still needed at the previously titrated pressure;
  • After substantial weight gain has occurred in patients previously treated with CPAP successfully, who are symptomatic again despite continued use of CPAP, to ascertain whether pressure adjustments are needed; or
  • When clinical response is insufficient or when symptoms return despite a good initial response to treatment with CPAP.”

The AASM has discussed this matter on separate occasions with Noridian staff from both the DME and Part B benefit categories. However, Noridian has advised AASM that only CMS can align two different benefit categories. Staff is now working to schedule a call with CMS staff and administrators to discuss how best to rectify this issue in a timely manner and to emphasize the level of urgency for sleep facilities in this particular jurisdiction.

The AASM will continue sharing updates as they are available. View the AASM Medicare Audit Toolkit for more resources. Questions regarding this matter may be sent to