Sleep therapy market rises above the din

As one of the strongest-performing categories in home medical equipment, sleep therapy is moving forward despite external factors that could slow it down, market vendors say. Both new Medicare resupply rules and competitive bidding have been imposed on the sleep business, but vendors say they haven't seen the disruptions that some have feared—at least not at this point.

Obstructive sleep apnea—one of the main market drivers—continues to be diagnosed and awareness of apnea's relationship to other co-morbidities is reportedly growing among primary care physicians. Therefore, CPAP therapy is still being regularly prescribed and used by apnea patients, says Scott Frenz, senior director of marketing for Philips Home Healthcare Solutions in Murrysville, Pa.

“PAP therapy is considered the gold standard for the treatment of OSA and the demand for these devices is strong,” he says. “We expect that the demand for CPAP devices and masks will remain strong regardless of the diagnostic approach.”

When the Medicare resupply rule came out last summer, many wondered about the impact it would have on providers' automated patient contact systems using interactive voice response, live calling, emails or texts to notify beneficiaries about eligibility for new masks and other supplies. The new rule put the onus on providers to find out whether the products actually needed replacing.

Susan S. Craig, director of sales for Lake Wales, Fla.-based 3B Medical, says the impact has been minimal. “Most providers adapted to the rule and provided staff with instructions on how to meet goals,” she said.

Tim Murphy, senior director of business solutions for Philips Home Healthcare Solutions, says his company has responded to input from customers to adjust the medSage and Encore resupply services to reflect the changes in the Medicare rule.

“It is clear to us that providers want to have effective and efficient ways of supporting Medicare and commercial payers' resupply policies,” he said. “With our resupply and patient management services for homecare providers, we continue to support our customers' efforts to comply with payer-initiated resupply policy revisions.”

With Round 2 of Medicare competitive bidding under way, the effect on sleep providers is an important consideration. Frenz says he hasn't seen any noticeable retraction from the business based on bidding results.

“Feedback we have received is generally positive in terms of providers staying in the market,” he said. “Whether they won the bid, chose not to bid or chose not to accept a bid, providers seem resolute in their commitment to staying in the sleep business, although they may select specific areas of focus outside of Medicare.”

HST future cloudy

Home sleep testing (HST) has traditionally been a business frontier with a lot of upside potential for HME, though sleep lab dominance has obstructed its expansive growth over the past decade. While technology of HST systems has improved in recent years, the road to widespread use remains littered with obstacles.

“The HST market is still in flux,” Craig said.  “We have our own home sleep device called SleepCare, but the marketing path for this device is not clear. Some sleep labs have embraced HST under the realization that they should control all sleep-related diagnostic avenues. The reimbursement for HST is very low compared to an attended sleep study. Ultimately, we think the growth path is expanding use of HST into primary care.”

So far, the influence of traditional sleep centers hasn't really changed providers' approach to the market, Craig said.

“It has had very little impact on sleep providers,” she said. “The move toward HST over attended sleep studies is a net positive to the extent that, with the absence of a titration study, it mandates prescribing auto-PAPs, which are a higher-priced item.”

Frenz believes a full-scale shift to home sleep testing rests with payers and benefits management groups.

“Payers are using pre-authorization to transition a greater percentage of OSA diagnoses to HST and as a result, providers are offering more HST options,” he said. “Models vary from managing all of the HST logistics in-house to simply providing devices and outsourcing the logistics to third parties.”