For HME Providers, Medicare Home Sleep Testing Bites the Dust

BALTIMORE — Along with a slew of new oxygen payment rules,
Medicare’s 2009 Physician Fee Schedule (PDF) put the final
nail in the Medicare home sleep testing coffin for HME
providers.

Still, attorney Neil Caesar said the final rule is more
favorable when it comes to referrals.

“The much harsher first version of the rule would have
prohibited all referrals between a sleep lab and a CPAP device
supplier if there was any sort of financial relationship between
them, no matter how remote,” said Caesar, lead attorney at the
Health
Law Center, Greenville, S.C. “The old rule prohibited referrals
if the DME supplier owned the sleep lab. The new rule appears to
allow such referrals. Now the only issues are whether the
relationship satisfies the anti-kickback rules and the Stark
Law.”

As for the provider’s role in home sleep testing for Medicare
patients, a July 7 proposed rule included the prohibition, but the
wording in the lengthy fee schedule leaves little wiggle room:

“No Medicare payment will be made to the supplier of a CPAP
device if that supplier, or its affiliate, is directly or
indirectly the provider of the sleep test used to diagnose the
beneficiary with obstructive sleep apnea. This prohibition does not
apply if the sleep test is an attended facility-based
polysomnogram.”

The rule defines “affiliate” as “a person or organization that
is related to another person or organization through a compensation
arrangement or ownership.”

It defines “attended facility-based polysomnogram” as “a
comprehensive diagnostic sleep test including at least
electroencephalography, electro-oculography, electromyography,
heart rate or electrocardiography, airflow, breathing effort, and
arterial oxygen saturation furnished in a sleep laboratory facility
in which a technologist supervises the recording during sleep time
and has the ability to intervene if needed.”

The key now, said Melanie P. Arledge, is to focus on
non-Medicare patients. “Our home sleep testing business is
thriving, and we are so busy that we need more devices than we
already have,” says Arledge, manager at Carlsbad, Calif-based
Progressive Medical. “Looking for revenue in different
areas is what it’s all about. There are different payer sources out
there other than Medicare, and different payer sources other than
commercial insurance.”

For Todd Cressler, owner of CressCare
Medical in Harrisburg, Pa., any dabbling in the home sleep
testing realm would be frowned upon by local sleep labs. “For us
here in central Pennsylvania, the rule is just fine,” said
Cressler. “The labs in our area are still very much against home
sleep testing. Anyone who is thought to provide home testing would
be banned from getting another CPAP referral. Hopefully some labs
in the area will offer it, and more folks will be prescribed
therapy. Then we can set them up and do what we do best.”

Arledge said most Medicare-age patients have already progressed
too far in the disease process, and therefore should be studied in
the lab.

“DMEs in home sleep testing should be looking at that younger
population and stopping that disease process,” said Arledge. “We
are out there working with business organizations to decrease their
workers’ comp costs and increase their productivity.”

View a PDF of CMS’ 1,459-page 2009 Physician Fee Schedule.