Yes, a simple voltage test (Bosch recommended) is used to check the O2 sensor element. This test will identify the most common cause of sensor failure. However, there are two other system functions that should also be tested: a current-draw measurement on the heater, and a duty-cycle measurement to test active operation. Alternatively, you could use an oscilloscope-based procedure (with propane) to test all functions.
If you're interested in DIY, I've outlined these tests in an earlier post (Search 'O2 Sensor' and 'Barrie'.
With respect to your second question, I wouldn't worry about altitude as this is a relatively crude device. In other words, if it passes these tests you're fine, otherwise 'replace'.
Hope this helps!