What we are today, we will not be tomorrow," says Julie K. Runyon, director of medical operations at California-based AdvantaCare Health. With reimbursements down, competitive bidding on the horizon, and surgical treatments for sleep apnea on the rise, CPAP providers are facing new and greater challenges. Experts say this brave new era will force providers to not only examine their businesses, but to restructure. It is all about maneuvering in uncharted territory and exploring new paths to profitability.

According to the National Sleep Foundation, more than 18 million Americans have obstructive sleep apnea (OSA). While it is difficult to estimate the prevalence of childhood OSA because of widely varying monitoring techniques, a minimum prevalence of 2% to 3% is likely, with prevalence as high as 10% to 20% in habitually snoring children. But here is the biggest concern of all: Physicians have long known that many more cases of OSA go undiagnosed.

Experts say that the general population is more educated today about sleep apnea. Between community outreach, pamphlets in physicians' offices, newspaper articles, and television commercials promoting sleep labs, people are beginning to understand that all snoring is not harmless. In fact, health experts say that approximately five out of every 100 snorers have sleep apnea—that is 2% to 4% of the adult population in the United States. Even so, some people, when faced with the choice of surgery or sleeping with a mask, would rather leave OSA undiagnosed and untreated. Still others remain unenlightened because they simply have not gotten the message about sleep apnea.

THE FAMILY PHYSICIAN: A SOURCE OF REVENUE

All those undiagnosed patients represent a challenge—and an opportunity—for providers. "More people are being diagnosed today, but still definitely not enough," Runyon says. "One of our focuses is just that. We are implementing screening at the family physician level." Early screening can be a big benefit for patients. What's more, it can build your bottom line.

Runyon says her company plans to increase business by continuing to build relationships with family physicians. AdvantaCare offers products like ApneaLink and Watchpad to help the general practitioner or family physician screen patients for OSA in the office and at home. After the screening, if the physician believes the patient may indeed have apnea, often that patient goes direct to a trial CPAP treatment—skipping the sleep laboratory study altogether. AdvantaCare provides the equipment and coordinates patient care directly with the physician.

Working directly with family physicians—and implementing apnea screening—is a whole new way of doing business. "Our business is no longer just about referrals from sleep labs and pulmonologists," Runyon says. "My advice to any CPAP provider is to look for as many revenue streams as possible."

In fact, this approach to patient care began with sleep specialists and has been the subject of much discussion in recent years at the annual National Sleep meeting. Some sleep physicians believe they can do as good a job of screening for OSA as a sleep lab by using standard screening tests like the Epworth Sleepiness Scale and the Berlin Questionnaire. These measures, coupled with a brief history and neck circumference, allow a sleep specialist to make an educated guess about a patient's potential for OSA. If the physician believes that the patient has apnea, he places the patient on a trial of CPAP. Using the latest equipment with memory, the physician is often capable of generating a sleep profile and making a diagnosis.

As with the family physicians Runyon works with, the sleep lab may be left out of the loop altogether unless the physician feels a study is absolutely needed. As one expert said, this approach is basically a whole new treatment model.

But without a sleep study, the big question for providers is: Who pays for the CPAP unit? Presently, a current sleep study at an accredited lab is one of the documentation requirements set by the Centers for Medicare and Medicaid Services for the coverage of CPAP equipment. So if a physician decides to forgo the sleep study, how does a provider collect payment? For AdvantaCare, the majority of patients referred by family physicians pay out of pocket for their CPAP units and masks. In some cases, private insurance companies may pick up the tab.

Finally, many companies—such as Procter & Gamble, for example—are self-insured. Experts say these companies are willing to do the math—and then do business differently. A sleep study is costly, and the purpose is simply to determine whether a person has a sleep disorder. A screening tool, like ApneaLink, provides a base for individuals to see if a sleep study is even necessary. If a company has 50,000 employees that could potentially require a sleep study priced at approximately $2,000 per study, it makes better sense to invest in screening first and then pay for studies and CPAP treatment only when necessary.

Clearly, one new way to stay profitable is to generate patient referrals from nontraditional sources. While sleep specialists and sleep labs remain vital to your business, with the latest screening tools the family physician is in a position to identify new OSA patients who otherwise may remain undiagnosed. This is beneficial to both patients and your business.

TARGET COMMERCIAL NICHE MARKETS

"Another way we plan to grow in 2007 is by servicing industry-specific niche markets," Runyon says. "For example, companies with large pools of employees who use machinery are a natural fit for apnea screening."

Consider, for example, the trucking industry, where OSA screening regulations already have been established. Approximately 5,600 people are killed annually in crashes involving commercial trucks. While not all of these fatalities can be attributed to drowsiness, research shows that commercial drivers are at high risk for OSA.

Trucking companies—particularly those that are self-insured—are strong new business prospects for CPAP providers. By working directly with the company, you can provide a turnkey service that includes OSA screening tools, CPAP units, follow-up equipment, and compliance monitoring to large groups of employees.

AdvantaCare and other smart providers are targeting additional commercial ventures that involve shift workers, machinery, and potentially hazardous situations. Industries such as agriculture, where farm workers drive tractors and operate large equipment—or manufacturing, where factory employees work shifts and handle machinery—are important new business prospects for today's providers. "Our goal is to prescreen workers who are subject to hazardous events," Runyon says. "Companies understand that sleep apnea can lead to serious accidents. They know it makes sense and is more cost-effective to be proactive and screen before the accident occurs."

PRODUCTS, MANUFACTURERS, AND COMPETITIVE BIDDING

As always, remaining successful in the CPAP market means offering products that help patients stay compliant. The greater compliance level, the more referrals you will receive. CPAP equipment has evolved tremendously over the past 10 years. While providers say the units are far smaller, quieter, and much more high-tech, reimbursement has not followed suit. The consensus is that reimbursement has stayed the same or gone down, while the equipment has become more sophisticated.

While reimbursement remains a challenge, the upside is that today's providers are in a better position to offer patients products they can stick with. "The biggest innovations and the most important are the patient comfort features," Runyon says. "There is so much out there now that helps patients stay compliant."

Partnering with manufacturers is another avenue you will want to explore. Reputable manufacturers offer much more than products these days. Rather, savvy providers view manufacturers as a resource for tapping new markets. AdvantaCare, for example, has formed a unique partnership with ResMed to target and address the needs of diabetic patients with OSA. "Last year, there was a great deal of research on the connection between diabetes and OSA," Runyon says. "It was predominant in clinical studies, and we spotted a need."

AdvantaCare and ResMed saw the link between the two diseases as a marketing opportunity. Together, they are creating a diabetes program to educate and treat an underserved sleep apnea population. In today's competitive climate, partnering with manufacturers to address specific disease categories or demographic populations is a smart move that can improve profitability. Gaining a reputation for an expertise in a certain niche can increase your business considerably.

Perhaps nothing will force providers to rethink and restructure the way they do business more than competitive bidding. Several small providers have already left the business in anticipation of competitive bidding, and experts predict many will follow. But other providers believe they can manage to survive by learning how to function effectively in this new era. "The greatest challenge of competitive bidding is staying current on all the information out there," Runyon says. "The key to success is understanding and evaluating which items you can afford to be a provider for and which ones you simply can't."

For more information on sleep opportunities—such as the sleep/bariatric connection (Nov 2006)—go to the free online archives section.

Despite the hurdles, CPAP business does not have to suffer in 2007. However, those who will succeed will take the road less traveled.

The new model calls for innovation and flexibility. Building business through family physicians, offering screening tools and services, targeting commercial prospects, and partnering with manufacturers are just a few of the new paths. It's time to rethink traditional ways of doing business and seize fresh opportunities. Do so and you can do more than survive. You can move forward on stronger footing and flourish.

Marianne Matthews is a contributing writer for  HME Today.