Dealer/Provider: Among CPAP providers, what do you find is the most common roadblock to successful reimbursement?
Stark: Mostly, it comes down to the correct coding and modifier usage, and making sure that the documentation is there to substantiate the claims that are being submitted. CPAP is fairly straightforward, and it is not currently under review by Medicare, other than some of the DMERCs conducting audits of the KX modifier—and it has come under focus recently with addressing the testing facilities and the modes under which patients are tested to qualify them. There was a recent national coverage decision that continues the ban on accepting sleep studies that are performed in mobile sleep labs or in-home sleep studies. They are currently restricted to facility-based polysomnograms.

Dealer/Provider: What do you suggest that providers do to avoid a problem?
Stark: It is just getting the proper education—going through a training class. It is one code for the device itself, the E0601, and then the modifier that is attached to get payment is the KX modifier. Understand that when you use the KX modifier, you mean it. It is your “I-do-solemnly-swear” modifier. For the first 3 months that you bill the CPAP, when the patient first starts it, the KX modifier indicates simply that you have a qualifying sleep study in your files that shows that the patient has obstructive sleep apnea. That is demonstrated based on the number of apneas and hypopneas the patient has—and tallied based on the total hours the patient was sleeping for the test (it is an average of the apneas and hypopneas). If they have 15 events or higher, beyond a shadow of a doubt, they qualify and you can use the KX. There is a borderline category of CPAP patients who have an apnea-hypopnea index (AHI) between 5 and 14 events. If they fall in the borderline category, they just need to demonstrate one additional complication of either excessive daytime sleepiness, impaired cognition, mood disorders, insomnia, hypertension, ischemic heart disease, or history of stroke. With any of those complications, you can use the KX modifier, and that is your protection to make sure that you are going to be covered in case of an audit, for those first 3 months. Beyond those 3 months, providers have to collect a statement—verbally or in writing—from either the patient or the physician to continue billing. That letter must state that the patient is using the machine and is benefiting from its use. Once you have that statement, you are eligible to use that KX modifier for the fourth month and beyond.

This is a capped rental item as well. You have to bill it as a rental; it is not eligible for purchase initially. After 10 months, the patient must be offered the option to continue renting it through Medicare and allow the supplier to bill for maintenance and service every 6 months, or they can opt to have it purchased, in which case it will be considered purchased by the 13th month claim.

Another reimbursement note relates to the accessories. As long as the patient is renting the CPAP, all accessories can be billed separately and receive separate reimbursement, as long as it’s within the usual parameters of what Medicare approves—and Medicare does provide a utilization guideline on the number of supplies a patient can get within a particular time frame. Things such as humidifiers, cushions for the nasal application device, chin straps, headgear, filters, and all of those types of accessories are separately reimbursable. As long as you have a detailed order for those additional accessories, you are eligible to separately bill for them.

Dealer/Provider: In a recent Dealer/Provider survey, 46% of respondents said that the biggest challenge in getting sleep claims paid was “getting properly completed paperwork back from the prescribing physician.” How can providers fix this problem?
Stark: First of all, make sure the documentation you are sending to the physician is clear and concise. Make sure it is organized so that the physician has to fill out as little as possible. Get the office manager or the head nurse involved at the office and have the doctor’s staff complete everything up to the signature and the date, so that the physician only has to sign it and date it. Quite often, the office managers are the ones who are really getting things done. They have the time to research the patient’s chart to provide what is needed. Ultimately, the doctor has confidence in his staff that they have provided accurate information. In designing the forms for collecting information, keep all of the supplier-provided information at the top, so the doctor can just review it. Have a designated area that is clear and has exactly the information you need to get from the physician in one centralized area. You don’t want physicians trying to look all over the form for the blanks they need to complete, because that is going to increase the number of errors and the number of times that suppliers have to go back and forth because something is not filled in correctly or they can’t bill off of it. That inherently will extend the timeline for getting that documentation.

Any time you can provide evidence or information that the physician has initiated the transaction, that is a good thing. Documents such as a copy of the physician’s prescription will differentiate you from suppliers that may be mass-marketing to physicians or targeting them through direct mail. A lot of faxed documentation comes over physicians’ fax machines, and you want to make sure that you have given your fax a personal differentiation; inform office staff that the doctor has initiated this process, and you are just trying to get the equipment and follow the doctor’s orders.

Dealer/Provider: Sleep therapy is among the fastest growing niches within HME. For providers who want to get involved, what is the first thing they should do? What should they avoid?
Stark: First of all, you need to look into licensure. Check with your state agency that regulates these types of transactions because you may have to hire specifically trained personnel. Several states require that you have a respiratory therapist on staff, and that therapist would be the only one who could deliver and set up the equipment. Some states are fairly loose in that they say that the respiratory therapist is required to set the pressures, but anyone could technically deliver the equipment.

A certain level of liability is associated with any type of respiratory equipment, so you would want to check with your liability insurance company to verify if adding this particular product is going to increase your premiums. The other thing to keep in mind is that it is a rapidly growing field, and a problem throughout the country is that with CPAP, it is difficult to maintain compliance with patients. To ensure that your patients are compliant, it is important to have a variety of products from which they can choose to make sure that the CPAP itself provides features they need, as well as different masks and gear for comfort.

So, inventory would also be a consideration. If you are going to enter into CPAP, you may also want to carry bilevel devices because that is a natural progression. If CPAP does not work, bilevel may be an alternative, so the two product lines go hand-in-hand.

Providers should avoid going into this niche lightly. You definitely have to do your research, and make sure you are fully prepared to take on this line of business. Know what the licensure requirements are, because if you start to provide this and your state requires you to have a licensed respiratory therapist (and you are not doing that correctly), that can open up liabilities. Make sure you are not required to have any additional permits.

Obviously, if the market is saturated, or if you have a lot of respiratory providers in the area, maybe that is not going to be a good business for you. Survey the market area and see what the market can bear.

Another thing to consider is whether CPAP might fall under competitive bidding. They still have not decided on what products are going to be included under that bidding process. Oxygen is a fairly good item to bank on. Whether they expand that out to the other respiratory products is yet to be seen. That is certainly something to watch for.

Dealer/Provider: What is the best way to earn business from a sleep laboratory or physician?
Stark: Show that you are in it for the patient, and that you have the patient’s best interest at heart. Show them what you have to offer over your competitors. What do you have that no one else is offering? That could be a specific product, a specialty device, your selection, the other lines of business that you have for the entire patient, or informative in-services.

A lot of physicians and sleep specialists have to get continuing education credits. If you can sponsor a seminar with recognized speakers in the industry, or arrange to have your Medicare ombudsman conduct a seminar to answer reimbursement and documentation questions, that will help. Educating patients to ward off ensuing complications also adds value. Ultimately, just showing your face is a good way to establish a personal relationship with the referral agency. Show that you are willing to work with that particular referral agent.

Dealer/Provider: Just over 43% of survey respondents said their sleep therapy business was growing “more quickly than other new product lines.” Can a sleep therapy business grow too fast?
Stark: The education is getting out there to patients. Sleep apnea has been a problem in this country for a long time, and it has gone undiagnosed. At this point, we are acknowledging the fact that it is a problem, and that it is almost in the same league as diabetes—and it took us a long time to determine how many diabetics we had in this country.

The sleep industry is just now starting to catch onto that awareness wave. I do not think the problem is increasing as much as the education is increasing, and the problem is being identified in more and more people. The demand is out there because it is being identified. The business is growing to keep up with the demand.

Dealer/Provider: Among sleep providers, what is the biggest misconception about reimbursement?
Stark: A lot of people do not realize when they first get into it that CPAPs have to be rented, and the accessories are separately billable because it is a rental. That could certainly cause a lot of denials or rejections.

Suppliers are missing out on the additional reimbursement for the accessories they are providing that are not included in the monthly allowance, even though they are allowed to separately bill for them. Also, a lot of people put the KX modifier on there because they know they won’t get paid without it, but they don’t know what the KX modifier means. They have just been told, “You have to put the KX modifier on there.” That is the biggest audit concern that could affect your company.

Anytime you use the KX modifier, research it and know what documentation you are required to have on file because it means something different for every medical policy. The KX modifier is just a way to make sure that claims go through more quickly; it is not supposed to be a hindrance. It basically allows you to not have to get a certificate of medical necessity. I like to refer to it as the “I-do-solemnly-swear” modifier. They take you at your word because they do not want you to have to send in every document that the KX modifier is relating to, so they allow you to send the modifier in lieu of the documentation—but they can always request the documentation at any time.

Dealer/Provider: Do you advocate software to speed claims and reimbursement? If so, what attributes should providers look for in a software package?
Stark: Software is so individual. It can vary tremendously based on the volume of your business, the size of your company, and the resources you have to invest. With the implementation of HIPAA, we are seeing more standardization as far as the basic components of getting the claim.

It’s all the bells and whistles you want to add after the fact that cause the price to go up. If you can’t afford the bells and whistles, you can still get it there electronically for little or no cost. All of the Medicare contractors are required to provide what is called a free software to get claims. They just charge a maintenance fee. That is the least costly alternative method to get claims there, but the bells and whistles can certainly make your life easier.

For example, can the software post payments electronically? If so, that will help to get your payments in. Does it have reporting capabilities to allow you to monitor the progress of the payment or how long it takes payments to turn around? Are there edits in place to make sure you do not do anything incorrectly? Does it check your diagnosis before it gets out the door to make sure it is a compliant diagnosis? Those front-end edits will make sure that you have fewer problems on the back end—making sure you avoid denials before claims even get to the system.

Some of the software products offer training tools built in to help you readily access medical policies and coverage guidelines. Many of them have the modifiers built in, but you must be careful that you don’t send a modifier in error or that you don’t know what it means. Other systems will offer you the ability to talk and export between different programs. Those things certainly make life easier, but it is up to you to determine what you can bear and how user-friendly it is. Also, what are the conversion costs if you want to switch software? Some packages allow you to rent space monthly and do transactions over the Internet, while others you have to purchase outright or have a lease option.

Dealer/Provider: What does the future hold?
Stark: I definitely see CPAP/sleep therapy continuing to grow. OSA is estimated to affect 12 million to 40 million adults, and so much of it is going undiagnosed. The health industry as a whole is going to see tremendous growth over the next several years.

Danielle Cohen is associate editor of Dealer/Provider.