Medicare and some insurance companies have strict criteria about covering the purchase of a CPAP machine for a patient. Here is my response to a question on the AASM discussion forums about getting CPAP and CPAP titrations covered for patients who have OSA/Upper airway resistance, but don't meet their insurance company's criteria for CPAP:
My understanding is that the MEdicare criteria (4% desat, etc), are for the coverage of the cpap machine. The actually cpap titration is covered if the attending feels it is medically necessary. So if the AHI (using 4% desat criteria for hypopneas) is less than 5, one approach would be to do a cpap titration-covered by Medicare- and then try to get a DME company to sell the pt a used, discounted cpap machine.
This approach also works with other insurance companies- usually diagnostic testing/titration is covered by a different department within the insurance company than DME. Though it may seem illogical, even insurance companies that have strict criteria for cpap machines will usually approve cpap titrations (at least in the state of Mississippi).