Sleep Center Fraud
Sleep apnea is a wide-spread affliction that affects an estimated 22 million Americans, of which roughly 80% of cases go undiagnosed according to the American Sleep Apnea Association. In order for sufferers to receive treatment, they must undergo a series of tests to determine specific diagnoses and effective treatment options, many of which occur in facilities such as sleep laboratories (commonly referred to as sleep centers). Firstly, an overnight polysomnographic diagnostic sleep test (PSG) is performed to diagnose what sleep disorder, if any, a patient is experiencing. The results of the PSG test are then interpreted by a physician, who identifies any indications of obstructive sleep apnea. Should the test meet certain criteria, the patient is prescribed a subsequent CPAP Study. This test, though similar to the PSG, fits the patient with a CPAP machine and determines the appropriate settings that will allow for overnight relief of sleep apnea symptoms.
The testing can often be pricey, with patient cost ranging from $600 to $5,000 per night. Thankfully, both forms of testing and CPAP equipment are often eligible for Medicare and Medicaid coverage. CMS has a certain set of requirements for in-center sleep studies to qualify for reimbursement, including:
- PSG Testing must be performed by a physician, or by a certified sleep technician.
- All testing and interpretation must be under the “general supervision” of a physician.
- CPAP testing is only covered if deemed “medically reasonable and necessary,” with a certain criteria of PSG test scores that must be met to determine it as such.
- CPAP equipment cannot be provided by the sleep lab in which testing was performed or by any affiliated entity.
Unfortunately, these sleep labs sometimes utilize questionable billing practices in order to violate the False Claims Act and bilk these government programs for undue reimbursement. The Office of the Inspector General found that between 2001 and 2009, sleep studies rose from $62 million to $235 million in Medicare reimbursement – with a steady rise of 8 to 9% each year since. By implementing certain unlawful techniques when certifying, coding, and billing for such tests, sleep labs can rob Medicare and Medicaid of vital funding. Some of these fraudulent practices include:
- “Unbundling” certain tests to double-bill for one procedure
- Submitting claims for two tests in one day per patient (which cannot be possible, due to the overnight nature of the tests)
- Skewing interpretation of PSG test results in order to falsely certify a patient as eligible for CPAP testing
- Prescribing CPAP equipment from the same lab/affiliated party, in direct violation of Stark Law
- Offering kickbacks for undue referrals for sleep testing
- Billing in-home tests as though they were conducted in-lab, which is approximately five times as costly
- Testing patients with no oversight, or with oversight only provided by non-certified personnel
Through these tactics and a variety of others, the OIG estimated a loss of at least $17 million in unnecessary sleep testing between 2005 and 2011. With sleep apnea considered to be a $30 billion industry, these labs are ripe for fraud – fraud which often goes undetected without the assistance of a whistleblower who seeks to do the right thing.
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