Clearing challenges in the sleep disorder area of HME
by Angela Giudice, RPSGT
September 11, 2014

Until this year, the data reporting requirements for CPAP reimbursement were fairly uniform. Generally, CMS defined the criteria, and private insurers followed CMS’s lead. Traditionally, reimbursement required objective evidence of adherence to use (defined as use of PAP devices for four or more hours per night on 70 percent of nights during a consecutive 30-day period any time during the first three months of initial use, commonly referred to as a “Best 30 Day” compliance adherence percentage). DME providers have met this challenge in a variety of ways. For smaller DMEs, compliance revolved around SD cards, but processing—in terms of both physically gaining access to the SD card and prompting the patient to send the card in—had hidden labor and efficiency impacts. Other DMEs opted for reliance on vendor-provided cellular modems. Modems, however, have an acquisition price of approximately $60 to $70. In addition, the cellular carrier’s data fee is roughly $7 per month, or $21 for a 90-day period. The average DME mitigated part of these costs by moving modems from patient to patient, but this, too, had a price tag, as every home visit caused a rough outlay of $80 to $100 per patient. Depending on the locale, the cost of retrieving the modem may have exceeded that of modem replacement. In addition, there are the logistical and inventory management problems of maintaining a supply of modems and tracking by serial number. Supporting modem use for 90 days might have stretched the financial aspects of providing CPAP therapy to the limit, but current and future changes to private insurance data reporting may have tipped the boat. At one point, CMS was the agency pushing the envelope on reporting requirements, and the private insurers followed suit. This has all changed. Now the private insurance companies are increasing and extending data reporting requirements. The trend seems to be moving toward extending compliance data reporting to a year, and possibly as a recurring requirement as long as there is resupply. On July 1, 2014, Anthem/AIM moved Blue Cross/Blue Shield requirements to a full year of data reporting. This was a game changer for many DMEs, as supporting modems for a full year now implies that the modem cannot be moved from patient to patient and data charges accrue for an entire year. This is an added expense of $150 per patient at a time when reimbursement has been cut by almost 50 percent across the board. CareCentrix requires reporting for six months. As the economics of this product space continue to change, it is not unreasonable to assume that compliance reporting may continue to extend to cover every year or every 90 days as a condition of resupply. Being able to supply compliance data for longer terms is now a reality, and coping with this reality requires some fundamental restructuring in how companies deal with compliance data reporting. How are vendors adjusting to the changing trends? Some companies believe any compliance data model that involves recurring monthly fees is a nonstarter. Handling patient management in the cloud is a difficult requirement; how the data gets there is the challenge. There is a race among vendors to provide free data uploading, and the means for achieving this can depend on a variety of formats, including piggybacking data on a patient’s smartphone with Bluetooth or accessing a patient’s Wi-Fi. One possible implementation is based on use of Qualcomm’s 2net ecosystem, but that implementation also involves a recurring monthly charge. Some companies are approaching the problem by developing compliance reporting that embraces many options. For example, the use of interactive voice recognition (IVR) can be a good choice. This kind of cloud-based patient management portal can be set up to automatically call patients and ask them to read specific information from their display. The number appearing on the display contains their sleep data, which is decoded and uploads to populate their patient history in a database. The beauty of this system is that it does not add cost. If an insurance provider extends compliance reporting to one year, or even to five years, the IVR is adjusted with a click of a mouse to meet the changing requirement. Additionally, some companies are exploring the use of QR Coding for compliance data. With this system, reporting compliance is as easy and as accurate as scanning a bar code on the display. Companies also are racing to bring out Wi-Fi and Bluetooth as other compliance reporting possibilities. Each of these technologies, unlike cellular modems, does not increase DME cost. The goal is to increase the number of free data reporting options: Inbound IVR, Outbound IVR, SD Card, Android and iPhone apps, Bluetooth and piggybacking on a patient’s smartphone as the gateway, or Wi-Fi. SD cards will always exist as a reliable backup, but going forward neither SD cards or cellular modems will be able to handle the changing landscape of private insurance demands for extended compliance data reporting for CPAP reimbursement. The future trend for sleep compliance data reporting must embrace free connectivity.