OIG report finds millions in Medicare overpayments for tests to diagnose sleep disorders

CMS may have overpaid hospitals, physicians, and freestanding facilities almost $270 million for polysomnography services that did not meet Medicare requirements over a two-year period, according to an Office of Inspector General (OIG) report.

The report, released June 7, notes that previous OIG reviews of Medicare payments for polysomnography, a test used to study sleep and diagnose sleep disorder, discovered that Medicare paid for services with inappropriate diagnosis codes, missing documentation, and to providers with questionable billing patterns. In addition, Medicare spending on polysomnography services has increased, according to the report, leading the OIG to conduct its review.

The review looked at claims for polysomnography services submitted in 2014 and 2015 by facilities associated with hospitals, physicians, and freestanding facilities. The OIG focused specifically on CPT® codes 95810 (polysomnography; age 6 years or older, sleep staging with four or more additional parameters of sleep, attended by a technologist) and 95811 (polysomnography; age 6 years or older, sleep staging with four or more additional parameters of sleep, with initiation of continuous positive airway pressure therapy or bilevel ventilation, attended by a technologist), as these were associated with billing errors identified in previous OIG reviews.

Of the 200 beneficiaries selected for review, 83 did not meet Medicare’s billing requirements, resulting in $56,688 in overpayments. The most common type of error was incomplete or missing medical record documentation.

The errors occurred due to insufficient CMS oversight, specifically because Medicare Administrative Contractors (MAC) do not conduct periodic reviews of polysomnography services, according to the report. Additionally, the OIG found that many providers do not understand Medicare’s billing requirement for polysomnography services.

Based on the sample results, the OIG estimates that in 2014 and 2015 Medicare made overpayments of $269,768,285 for polysomnography services.

The OIG recommended that CMS instruct MACs to recover the $56,688 in overpayments identified by the review. It also recommended that CMS work with MACs on targeted reviews of polysomnography claims and educate providers on polysomnography billing requirements. CMS agreed with the OIG’s recommendations and outlined plans to address them.