Tuesday, April 01, 2008

State of Sleep Medicine 2008, Part one

This is the first in a series of posts in which I discuss sleep industry trends. I'll start with a familiar topic, home testing for Obstructive Sleep Apnea.


3 weeks ago, CMS approved home testing for OSA on a national level. Currently the Medicare Regions are implementing the national decision via Local Coverage Determinations (LCD), which are not expected to veer too far from the National Coverage Determination (NCD). Specifically, either Type 3 (at least 4 channels) or Type 4 devices with 3 channels (not all Type 4 devices have 3 channels) will be acceptable for diagnosing OSA and qualifying the patient for CPAP. Certain type 3 devices have been, and will continue to remain elgible for reimbursement by Medicare under the following CPT code:

CPT code 95806 (unattended sleep study) by definition involves the absence of a technologist. Unattended sleep studies must meet the CPT definition in order to bill CPT code 95806.95806SLEEP STUDY, SIMULTANEOUS RECORDING OF VENTILATION, RESPIRATORY EFFORT, ECG OR HEART RATE, AND OXYGEN SATURATION, UNATTENDED BY A TECHNOLOGIST.

The Medicare reimbursement for 95806 is slightly over $200 (for the combined technical and professional component of billing).

Commercial insurers are expected to follow Medicare's lead in the upcoming months. Aetna is following Medicare's NCD closely.

American Academy of Sleep Medicine accredited sleep centers/labs that offer home testing will need to use Type 3 devices to stay within AASM guidelines.

At least for now, there has been no change in the coverage for in-lab polysomnography (Medicare and all major insurers cover standard polysomnography and do not require portable testing to be done). CPAP titration studies also remain covered. An in-lab CPAP titration study is not required to prescribe CPAP. In the long-term, it is possible that insurers will try to cut down on the number of the more expensive in-lab studies done.

To what extent will home testing replace in-lab studies? Will primary care doctors move into the sleep apnea business and start to offer home testing? To what extent will home auto-cpap titrations (there is no reimbursement for performing this type of study) replace standard in-lab cpap titrations? Will primary care doctors in rural areas try to treat osa without the involvement of a sleep lab by doing portable testing followed by home auto-cpap titrations?

Will Auto CPAP replaced fixed-pressure CPAP???? Rather that performing a titration study (either in a lab or at home), will it become standard practice just to prescribe an auto-cpap machine set with a range of 4-20 for permanent use, and then perhaps narrow the pressure range over time???? This would be the most economical strategy for insurance companies, and I think that this is where the sleep industry is headed over the next 5-10 years. I don't think that this is the best strategy for patient care, however.


Rehan said...


I am a neurologist that would like to open up my own sleep lab in Arizona.

Do you think that there is still a window of opportunity to do well with this ?

Sleep Medicine MD said...

Dr Rack

Thanks for comment,very helpful.


Michael Rack, MD said...

Rehan, Vinod:

thanks for reading.
I am writing a post right now about opening up a sleep lab.

Jason Smith RPSGT said...

Dr. Rack,
Your blog provides a great summary of a very ambigous topic current in our industry. Are you seeing HME companies in your area currently marketing HST to PCPs? How are you educating the PCPs on the best practices for diagnosis and treatment?
Best Regards,
Jason Smith,

KySleep said...

DME providers are capitalst, even if the LCD's approve payment for HST's the reimbursemnt is extremely low. Then the DME provider would have to have the HST read by a doctor, even if the doctors fee was meager, there just wouldn't (my opinion) be enough pie to divide. Now if a DME company was in some way guaranteed to receive a CPAP referal for the HST done then it could be profitable, until STARK nailed them. Recently, in this DMERC region at least 2 DME companies have been prosecuted rather severely.

Paul said...
This comment has been removed by the author.
Paul said...

Hi, what kind of restrictions/qualifications are there for selling CPAP equipment? I run an online store selling other sleep-related products (sound conditioners, light boxes, sleep masks, etc.) and am considering adding CPAP's. Thanks. Paul

landon said...

There has already been a precedent set regarding home testing and the involvement of DME's with overnight pulse-oximetry testing. In cases where the DME's are providing oxygen concentrators, the only involvement they may have in the process is as a courier of the equipment to the patient. The independent lab must provide the instruction, patient support, physician oversight, test report distribution, and bill for the test. The DME basically can have no involvement in the test other than delivering the test equipment. Obviously, if a patient qualifies, the DME is hoping that the physician chooses to refer the patient to them, or that the patient remembers them for the oxygen setup. However the physician is not required to do so, and the patient may choose an alternative provider.

I see no reason this same model would not apply with the DME supplier and Home Sleep Testing, provided the IDTF or Sleep lab are fully qualified to provide the test support and instruction. One difference is that in the 95806 CPT code, the company billing the Technical component of the test MUST OWN the equipment. With oxmetry , it has specifically been stated that the DME may own the oximeters, as long as they are sealed and tamper proof units. This would preclude many smaller labs from entering this business model, as they have with overnight Pulse/Oximetry. This should also serve as a warning to DME companies that are considering purchasing this expensive sleep testing equipment. At this point, the lab would have to own and provide the equipment, even in the case where a DME would deliver the equipment.

Michael Rack, MD said...

thanks for sharing your experiences.

So far, no one that I know of in Mississippi is offering home testing. My sleep lab does have a marketing person who helps to educate pcps.

Paul, sorry, but I don't know too much about the dme business since Stark/anti-kickback laws make it hard for physicians to be owners of dme companies

ArcLight said...

I personally do NOT like the HST idea at all.
First off the ability to fake the data is not controllable. What is to stop an otherwise diagnosable OSA patient from slapping the device onto his wife so that he won't have to follow up with these dumb doctors.
As it is I have an abundance of patients who are under the impression that we are making OSA up to sell equipment and make money from insurance companies.
That is just irresponsible patient care in every way.
On the flip side, there is no mention of EEG monitoring, therefore a healthy sleeper could stay wide awake watching TV and holding his breath over and over. A hypochondriac could be doing severe damage with equipment they don't need.
Once again not responsible. We all see the patient who insists he/she has every resp. issue known to man. Only to find they don't, and they don't even need the 2L of O2 they swear by.
Imagine handing out meds to any other patient for a unmonitored and uncontrolled home test. Preposterous.
That leads me to the next issue. The insurance companies. Of course Medicare is going to push the home tests. MDs are finally seeing the links to all sorts of issues and sleep is getting more referrals than ever. Diabetis, Cardiac, pre-op lab band, etc. The numbers are higher than ever.
Add to that the baby boomer retirement age looming ever closer. The Ins. companies see the writing on the wall and are trying to cauterize before they really start losing blood in this new "trend".
In such a dynamic all encompassing and important field such as sleep, that has fought for respect and recognition so long, is this smart? Do we now turn it over and let it become an irresponsible and untrusted kit you can take home? That maybe alright for peeing on a pregnancy test, but not for sleep.

SleepJim said...

I'm curious why a Sleep Lab would want to get into the CPAP business, isn't there a cash flow issue ? Isn't it easier to just give the CPAP Rx to a DME company and let them deal with the insurance payments ? What am I missing ?

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