The decline of physician-practice sleep labs

There are 3 basic business structures of sleep labs:
1. hospital-owned
2. independent diagnostic and testing facility (IDTF's)
3. extension of a physician practice

At the AASM Sleep Management course I went to in February, it was reported that business structure 3 comprised less than 5% of sleep labs. The differences between the 3 business structures can be complex, and I plan to talk about this more in future posts. To briefly illustrate the complexity, I will just mention at this time that physicians are often part-owners of IDTF's and hospital associated sleep labs. Physicians sometimes fully own an IDTF.

In my brief career in sleep medicine, the decline of stucture #3 has been a disturbing trend. Sleep Review Magazine reports on how a new interpretation of an old Florida law has led to severe restriction on this type of lab:

In responding to a request from Jacksonville Heart Center (Jax Heart), the State of Florida Board of Medicine finds that physicians of physician-owned labs must directly supervise sleep studies.
In its request, Jax Heart, a group practice comprised of 17 cardiovascular physicians, proposed to establish an eight-bed sleep center as part of its medical practice. The request stated, in part, “.... For sleep studies performed after normal business hours, a Jax Heart physician would be on-call and immediately available by phone."
.....the main issue with the request submitted by Jax Heart was whether the sleep center’s services were being conducted under the “direct supervision” of Jax Heart.
The State of Florida Board of Medicine stated, “If the Sleep Center does provide services under the direct supervision of Jax Heart, the Petitioner’s proposed arrangement does not constitute a ‘referral’ that is precluded by Section 458.053(5), Florida Statutes.
“We found that the law dictated that patients needing a sleep study would be supervised differently depending upon whether the lab was owned by a physician group rather than an IDTF/Hospital,” said Masters.
Ultimately, the Board found that Jax Heart would not be providing services under the “direct supervision” (meaning supervision by a physician who is present in the office suite and immediately available to provide assistance and direction throughout the time services are being performed), and that Jax Heart’s proposed referral of patients to its sleep center is precluded by Section 458.053(5), Florida Statutes.
“It is also important to note that the declaratory statement did not say that physicians are not able to own their own lab—rather that they must provide direct supervision for patient care in a sleep center,” Masters said. “Secondly, the Board reinforced that physician-owned sleep labs must only treat their patients in the sleep center. This provision would not change even if the Direct Supervision requirement was changed to be an exception.”
Read the entire decision here.
Basically, the state of Florida is requiring sleep labs that are an extension of a physician practice to have a physician present whenever sleep studies are run. This is a poorly written article; as I pointed out above, a physician can own all or part of an IDTF. There is a definite distinction between a physician-owned sleep lab and a sleep lab that is an extension of a physician practice.