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.