The studies supporting the link between obstructive sleep apnea (OSA)—a breathing disorder characterized by repeated collapse of the upper airway during sleep—and potentially life-threatening conditions, such as heart failure, just keep piling up. Fortunately, the studies showing that treating OSA with a continuous positive airway pressure (CPAP)-type device can help these conditions are not far behind. In March a clinical trial reported in the New England Journal of Medicine found that treatment with a portable CPAP device improved heart function for OSA sufferers with heart disease.

And it is not just clinicians who are taking notice. Recognition of the seriousness of OSA and the cardiovascular risk factors associated with the OSA patient prompted Medicare administrators to significantly liberalize medical necessity criteria for CPAP treatment on July 1, 2002.

Based on these broadened coverage guidelines, industry analysts predicted massive growth for the HME/respiratory industry as more patients qualified for CPAP devices (Healthcare Common Procedure Coding System [HCPCS] code E0601) used to treat OSA. However, the growth of the CPAP market since the changes went into effect has fallen somewhat short of predictions.

“We are just a little disappointed in the growth in the market,” says one major manufacturer of CPAP devices contacted for this article. “Product sales have certainly grown, but not at quite the levels we had initially projected. We remain confident, however, that the growth will continue as more suppliers recognize the importance of educating the prescribing physician to the new coverage guidelines. When we review the sales growth by companies, it is apparent that the suppliers who have experienced the largest growth in sales over the past year have established aggressive education and marketing plans to reach both the physician and the patient.”

Demographics Support Growth
According to the American Sleep Apnea Association in Washington, DC, more than 12 million Americans suffer from sleep apnea, and it is conservatively estimated that 10 million remain undiagnosed. These figures, coupled with the expansion of Medicare medical coverage criteria, afford the savvy HME/respiratory supplier an excellent opportunity for expanding sales and growth in the sleep therapy niche.

The changes in medical coverage policy in July 2002 decreased the number of hours required for the qualifying polysomnography (sleep study) to 2 hours (without the use of a CPAP device), as well as reduced the number of apnea events previously required to meet coverage criteria. (An apnea is clinically defined as a cessation of breath that lasts at least 10 seconds.)

In addition, the new policy recognizes hypopnea events, which are defined by Medicare as partial cessations of breath lasting at least 10 seconds each that are associated with at least a 30% reduction in thoracoabdominal movement or airflow as compared to the patient baseline and at least a 4% decrease in oxygen saturation. The new coverage criteria allow combining the apnea and hypopnea events as the apnea-hypopnea index (AHI) to establish a patient’s need for a CPAP device.

Often during the course of the polysomnography study, other sleep disturbances may occur and be recorded by a laboratory. These sleep disturbances may include, but are not limited to, leg movements, snoring, and respiratory-event related arousals (RERAs). In March of this year, the DME Regional Carriers (DMERCs) eliminated an existing element of confusion and further clarified the requirements by removing the term Respiratory Disturbance Index (RDI) from the policy. Now the qualifying index must score apneas and hypopneas separately from other sleep disturbance events or the patient will not meet medical necessity criteria and the claim will be denied.

An additional outcome of the policy changes in July 2002 was the elimination of the certificate of medical necessity (CMN) as mandatory documentation for claims filed to effect reimbursement of CPAP devices. This change does not preclude the need for supporting documentation, but it eliminates the specific form that was required and leaves the method and format for gathering documentation of medical necessity up to the supplier.

Proceed Carefully
While this sounds great, suppliers should use caution in this area, warns Ronald Green, a DMERC spokesperson. “The elimination of the CPAP CMN does not eliminate the supplier obligation to have documentation of medical necessity in the patient file readily available for review,” he says. “A valid physician order, which contains all required information and has been signed and dated by the physician, should be maintained on file as a means of establishing medical necessity. The supplier also may wish to obtain a copy of the patient’s polysomnography report to place in the patient file.”

The need for proof of documentation is evident by the additional requirement for the use of the “KX” modifier. The addition of the “KX” modifier requirement to the HCPCS code when submitting a CPAP device claim for reimbursement in the first 3 months of the capped rental process notifies the DMERC that the required documentation is readily available and establishes and supports medical necessity.

Policy guidelines also note that “It is expected that the patient’s medical records will reflect the need for the care provided. The patient’s medical records include the physician’s office records, hospital records, nursing home records, home health agency records, records from other health care professionals, and test reports. This documentation must be available to the DMERC upon request.”

Another requirement of the revised CPAP policy is verification of continued use of the CPAP device beyond the first 3 months of therapy. The verification may be obtained from the beneficiary or the physician, and (according to the DMERCs) may be obtained verbally or in writing. Again, the addition of the “KX” modifier to the HCPCS code serves as notification to the DMERC that this requirement has been met.

It is interesting to note that the majority of the suppliers I spoke with prior to writing this article expressed concerns over obtaining verbal verification and have opted to establish their own policy to allow only written verification.

In addition, one must also remember that although the verification of continued use of the CPAP device is mandated beyond the first 3 months of therapy, the CPAP device is classified as a capped rental item. Therefore, when submitting claims for monthly rental or claims for maintenance and service charges to Medicare, it is the responsibility of the supplier to determine there is continuing medical necessity for the equipment and the beneficiary is using the equipment.

Medicare will also reimburse for a heated or nonheated humidifier when ordered by the physician for the patient to use with the CPAP device. The supplier should request that the physician justify the need for the humidifier, as well as the need for heated versus nonheated airway pressure, on the physician order or in another format.

The future of CPAP sales is promising and presents a lucrative business opportunity for the savvy supplier. Marketing to and educating physicians as well as OSA patients should generate new sales and increased revenue. Additionally, staying abreast of changes in coverage criteria and documentation requirements will assure prompt reimbursement and increased cash flow.

Helen M. Farrell is a reimbursement consultant and CEO of Medical Accounting and Reimbursement Services (MARS), Chesapeake, Va. Contact MARS at (757) 410-1732.

Researchers Link Snoring to Headaches
Habitual snoring may be a risk factor for chronic daily headache, according to a recent study.

Published in the April 22 issue of Neurology, the scientific journal of the American Academy of Neurology, the study found that people who suffer from chronic daily headache—usually defined by 15 headaches or more per month—are more than twice as likely to be regular snorers. The difference remained after adjusting for factors related to sleep-disordered breathing, such as gender, age, body-mass index, and alcohol consumption.

“If the snoring was causing the headaches, then it is possible that treating the snoring might improve the headaches,” says study author Ann I. Scher, PhD, of the National Institute on Aging in Bethesda, Md. “This would be good news since chronic daily headache can be a difficult problem to manage clinically,” The study, supported by GlaxoSmithKline, the Migraine Trust, and the American Headache Society, involved phone interviews with 713 people aged 18 to 65. Of the group, 206 people had chronic daily headaches for 5 years or less and 507 people had episodic headaches (2 to 104 headaches per year).

The authors noted that the results may be skewed if the study participants misreported the frequency of their snoring. Scher says they would like to conduct further research.

Sleep Accreditation Program Gets Green Light
Thanks in part to the Commission on Accreditation of Allied Health Education Programs (CAAHEP), aspiring sleep specialists soon will have schools with accredited polysomnography programs.

CAAHEP approved the request of the Association of Polysomnographic Technologists (APT) for eligibility in the accreditation system and its request to form a Committee on Accreditation for Polysomnography sponsored by the American Academy of Sleep Medicine and the Board of Registered Polysomnographic Technologists.

During the summer of 2003, APT will complete standardized educational materials for teaching and assessing polysomnography. Guidelines for schools wishing to apply for accreditation will be available in October.

“This is a momentous occasion for the profession of polysomnograph,” says Rose Ann Zumstein, APT president. “Professional development has been a primary focus of the APT since 1978, and this accomplishment brings with it the realization of standardized educational programs critical to the future of our profession.”

ResMed, Guidant Team for Sleep/Heart Research
ResMed, Poway, Calif, and a cardiovascular medical products company, Guidant Corp, Indianapolis, plan to work together to develop products that diagnose and treat sleep-disordered breathing and cardiac rhythm disorders. Research has shown a link between sleep-disordered breathing and hypertension, a condition that often leads to other cardiovascular diseases, such as heart failure, according to ResMed.

“Guidant is actively involved in researching the opportunities for management of sleep-disordered breathing in patients with pacemakers, defibrillators, and resynchronization systems,” says Fred McCoy, president, Cardiac Rhythm Management, Guidant. “Our strategic alliance with ResMed will allow both companies to identify and potentially treat these patients with our lifesaving therapies.”

The companies plan to comarket to each other’s physician partners and customers while collaborating on research and development projects. The result will be a significant patient population overlap, the companies say.

Although ResMed does not expect this alliance to materially contribute to revenue or profit in the short-term, the company believes the long-term effect will be positive.

Weekly TV Segment Spotlights RDI
If you turned on MSNBC during the “IMUS in the Morning” broadcast on April 16, you might have caught a glimpse of Respiratory Distributors Inc (RDI), Foley, Ala.

The respiratory medication and product distributing company was featured during “Terry Bradshaw’s Pick of the Week” segment. Hosted and narrated by Bradshaw, the segment reaches more than 1.2 million people nationally and has highlighted companies such as Gloria Jeans, Ron Jon’s Surf Shop, and Lady Remington.

The segment discussed RDI’s transition from distribution into the manufacturing realm and included interviews with CEO Marty McClantoc, Vice President of Sales Eddie Moore, and Purchasing Director Jason McLellan. Bradshaw’s narration was accompanied by a visual tour of RDI’s facilities, including its corporate offices, two primary warehouses, and STAT Service Center.

“Our employees stay motivated because they know at the end of every one of their orders is a patient that gets a medication he needs to breathe,” McClantoc said during the segment.