Almost every audit since 2010, by the Office of the Inspectorate General (OIG), responsible for reducing waste and improving the effectiveness of healthcare programs, has uncovered millions of dollars in Medicare overpayments to sleep clinics, primarily because of incorrect usage of sleep study CPT codes in billing operations.  

This highlights concerns about unethical billing practices and the need for sleep study billing guidelines designed to eliminate incorrect coding that leads to overpayments.  

A frequently cited reason by the OIG for Medicare overpayments is “lapses by the Centers for Medicare & Medicaid Services (CMS)”. 

While it may be easy for sleep centers to pass on the blame to the CMS’ oversight, there are some serious consequences, including penalties if HCPs are found guilty of incorrect billing & coding practices.  

Thus for the purposes of this blog, let’s explore the main factors responsible of sleep center overpayments, and the important steps in sleep study billing guidelines to effectively deal with this problem. 

Sleep study billing: Two main factors responsible for Medicare overpayments 

Over the years, the OIG has identified various factors that lead to overpayment of sleep study billing claims. Two of the most regular causes for Medicare overpayments to sleep centers, as cited by the OIG, are lapses by the Centers for Medicare & Medicaid Services’ MACs and inefficiencies in sleep study billing operations.  

Lapses by the CMS’ Medicare Administrative Contractors  

As per OIG surveys, most overpayments to sleep centers are a result of oversight by MACs. The OIG states that a large number of approved claims don’t even fulfill insurance eligibility criteria. These claims that should have been flagged off by MACs as “ineligible for reimbursements” are given approval mostly because of failure to cross-check them against insurance eligibility guidelines, and are the biggest contributor to Medicare overpayments.  

Inefficiencies in sleep study billing operations 

Excessive payments arising out of inefficient sleep study billing practices are the second biggest contributor to Medicare overpayments. The probability of these overpayments are usually high if the sleep study center employs billing or coding staff that are new, inexperienced or not certified by the CPC. Some of the most common problems with in-house billing operations are excessive billing frequency, up-coding, over-coding, and billing without a referral.  

The most important steps in billing guidelines for sleep studies to eliminate lapses that can result in overpayments are mentioned below: 

Step 1: Registering patients  

Step 2: Health plan eligibility and frequency of service  

Step 3: Assigning sleep study CPT codes and double-checking coding accuracy  

Step 4: Collecting essential documents  

Step 5: Sleep study insurance claim submission  

Step 6: Adjudication of sleep study reimbursement claims  

Step 7: Payment and explanation of benefits  

Step 8: Billing  

Step 9: Appeals and follow-ups, if required 

Coding Guidance: sleep study CPT codes 

• 95811 - Should be billed for split night studies. This code is inclusive of 95810. It represents polysomnography; age 6 years or older, sleep staging with 4 or more additional parameters of sleep, attended by a technologist. 
• 95810 - Included in the services of 95811. 
• 95782 - Includes sleep staging and is used for four or more additional parameters. 
• 95783 - Also referred to as split study, includes sleep staging and is used for four or more additional parameters. 

• 95808 - Includes sleep staging and is used for reimbursement for one to three additional parameters. 

For information on our “30-day free transition”, cost per FTE or to know more about billing guidelines for sleep study practices to eliminate overpayments, please contact a Sunknowledge medical billing subject matter expert.