Insurance coverage may be the only kind of umbrella that rainy day Seattleites actually use when they can.
But insurance can be complicated, especially when it's applied to specific kinds of medical procedures and tests.
When it comes to sleep health diagnostics, the question begs:
Does health insurance cover sleep studies?
Yes, usually. The less-than-satisfactory answer is, "It depends." But by and large, all insurance payers offer some sort of reimbursement for sleep studies of all kinds.
This is one of the biggest questions we field from patients at the sleep center. They are reasonable to ask whether they have adequate coverage for an upcoming sleep test, which they understand can be more expensive than many other kinds of medical tests.
Last week we posted an article giving our particular rates for various kinds of sleep tests. These rates define the price for services we charge before insurance reimburses you for them. They're frequently much higher than what patients actually pay (if they are "in network").
What is the cost of a sleep study with insurance?
It’s nearly impossible to capture all of the variations in reimbursement schedules from one insurance payer to the next, especially with so many different avenues for applying insurance benefits (for instance: private payer plans, Medicare/Medicaid, or health insurance exchanges through the Healthplanfinder.com, Washington state’s health insurance marketplace provision for the Affordable Care Act).
However, here are some highlights and generalized guidelines for determining if, how, and when your insurer will cover your sleep study. For the purposes of this post, the discussion centers only on private insurance carriers and not CMS/Medicare/Medicaid.
Solving the puzzle of insurance coverage for sleep studies
Understanding what's covered, what's not, how much, and when demands some mastery over your own policy's terms and conditions. These include an insurer's specific testing protocols, network discounts, deductibles, coinsurance, copays, and out-of-pocket limits.
Insurance requirements for sleep studies
Don't be surprised if your sleep test is different from your aunt's or your co-worker's: the choice is often dictated by the insurance company. There's a wide range of rules for what insurance carriers will cover, with criteria to be met in order to approve claims.
For example, some insurers require you to have a less expensive home sleep apnea test (HSAT) first. HSATs can accurately diagnose about three quarters of patients with sleep apnea (if this is what is suspected), meaning an overnight sleep study isn't always needed for a diagnosis and treatment. This protocol saves patients and insurance companies money and speeds up the process for sleep centers and patients when sleep apnea is the expected outcome.
The "network" rule
Insurance companies often have networks of approved doctors who, by belonging to this network, are able to offer patients discounted rates on services. Patients stand to save more money by selecting doctors inside these approved "networks." The prices of tests are going to be less "in network" for both the patients and the insurance companies as a result.
But patients aren't required to use these networks; they are still given the option of seeking "out-of-network" physicians. However, reimbursements can be slim to none for these doctors, hence the "in network" carrot that insurance companies dangle.
If you've been referred to a sleep specialist for a sleep study, it's in your best interest to consult with your insurance payer first to confirm the sleep center and specialist in your referral are "in network" so that you pay the least amount out of pocket.
The working parts of an insurance plan
The deductible is the amount you pay out of pocket for medical expenses before your insurance company's coverage kicks in.
If you have a deductible of $1000 and you haven't had any other services performed prior to your sleep study, you will usually need to "pay down" that $1000 deductible. After that, your insurance company begins to reimburse, with those amounts depending on your policy, whether you've stayed "in network" and whether you have coinsurance.
This is the percentage you will still pay on medical services after the deductible has been satisfied. Usually this is an 80/20 split: the insurance company pays 80 percent of the final bill, and you pay the rest up to a predetermined maximum. Check your policy to figure out what your coinsurance percentages are.
Copayment (or copay) usually applies to prescriptions and office visits, but some insurance companies may ask you to pay a small fee (copay) before having a sleep study. Again, you will need to consult your insurance carrier to see if they have any front-end fees you'll need to pay first.
This term refers to the total amount you will actually pay for covered expenses in any given year. First you pay your deductible, then you pay your coinsurance percentage up to a predetermined amount. After you reach that limit, you have maxed out your out-of-pocket limit, and then your insurance company usually covers all expenses at 100 percent.
Here's a tip: Pay attention to the scheduling of your sleep study as it relates to your deductible. Having a sleep study done in January can be costly, but once you pay your deductible, coinsurance can cover a majority of your durable medical equipment (DME) expenses and bring you closer to your overall out-of-pocket expenses limit, leaving the rest of your healthcare costs to be covered at 100 percent.
Having a sleep study at year's end, on the other hand, means you may have already reached out-of-pocket limits due to other medical costs. You will want to get your DME expenses covered and updated by December 31 or else you'll need a plan to pay toward your deductible the following January.
What if I don't want to pay with insurance?
Sometimes patients review their coverages, then look at their cash pay options, and decide to skip insurance coverage because it's less expensive to pay cash. We offer a cash pay rate that's discounted for this reason. People without insurance can also enjoy the cash-pay discount for services we provide.
What happens if my insurance carrier refuses to reimburse for my sleep study?
They may decide your sleep study is "medically unnecessary," even if your doctor thinks otherwise. This is often why the "HSAT first, PSG second" model is so prevalent. Insurance companies are trying to reduce costs, so they will demand less expensive tests up front.
However, a home sleep test may not only show you have sleep apnea. It might show a need for a more accurate in-lab test (an overnight test called a nocturnal polysomnogram) to measure severity of apnea or other symptoms; in this case, the insurance payer has the proof it needs to approve and pay for a test deemed to be of "medical necessity."
Proving medical necessity
Keep in mind that while there are textbook ideas about conditions like sleep apnea, patients are unique and rarely fit the mold. Insurance companies know this and require a great deal of information about you as a patient in their decision whether to reimburse for a study. Proof of medical necessity is a critical part of their analysis.
They look at other health conditions (such as preexisting cardiovascular disease, as an example) and past medical history (triple bypass, for instance) to determine the kind of test you will receive. Not all tests are right for all patients. Certain patients will not qualify for HSAT if they meet other criteria; they may be granted a reimbursable in-lab sleep test outright instead.
Uncertain about your coverage? Call your insurance company and ask them what you need to show in order to receive approval for a sleep study.
How can Sound Sleep Health help?
We can and do verify insurance coverage and make pre-authorizations in our office to ensure you will receive the reimbursements your policy covers. You can ask us about your options and what to expect before you sleep study so that there won't be any big surprises after the fact.
Sometimes a sleep study can elicit more anxiety due to its costs than to the mystery surrounding the test itself. Sleep studies can be expensive, but they don’t have to be, if you have a solid understanding of your health insurance coverage and your options.
Remember: the price of a sleep test and therapy may be more than you'd like to pay, but it's nothing compared to the price you'll eventually pay for untreated sleep apnea or other sleep disorders... not only in dollars, but in quality and length of life.