Most people suspected of having obstructive sleep apnea (OSA) apparently are not eager to go to sleep labs for testing. It is not that they do not want to be diagnosed. Rather, according to various surveys, their preference is to be studied overnight at home. That's understandable—home offers the restful comfort of one's own bed and familiar surroundings.

The public appetite for testing at home is just what HME provider Progressive Medical aims to satisfy en route to fulfilling its founder's goal of someday becoming Southern California's premier provider of ambulatory sleep studies. Helen A. Kent, RRT, is the one with that pleasant dream. "Ambulatory sleep studies in the home are here to stay," she enthuses. "We now have the equipment necessary to produce a diagnostic-quality, unattended sleep study in the home. Because of that, there are never-before-possible opportunities for growing an ambulatory sleep study business."

FRIEND OF THE LABS

Not surprisingly, some sleep labs in the San Diego market perceive Carlsbad, Calif-based Progressive Medical as unwelcome competition, but Kent insists there is no reason for them to feel that way. "They're afraid of us," she says, "because they think we're taking their piece of the pie, when actually we're not. There's no way that we can. The pie is huge. Plenty of slices for everybody."

If nothing else, Kent has revealed herself to be a friend of the labs by referring to them sizable numbers of patients—those she believes are better off being studied in a sleep center than at home. Indeed, as many as 30% of those who contact Progressive Medical to arrange an ambulatory sleep study end up so referred. "My belief is that sleep labs should be used for the more complicated patients," she says. "There is a genuine need for companies like mine that can screen patients and identify those complicated cases for the sleep labs. This is accomplished by an exceptionally good intake process that includes working up a comprehensive medical history on each patient. That's how most of the contraindicated individuals are screened out, not as a result of findings from an ambulatory sleep study."

Still, it is easy to appreciate why some labs would fret about Progressive Medical. The big advantage it enjoys over sleep labs is that it can have OSA patients diagnosed and started on CPAP therapy in a fraction of the time it normally takes a sleep lab. "We treat every patient with urgency," Kent says. "With a sleep lab, you can wait 6 months for an appointment to go in and have a sleep study, then another 3 months after that before you get on CPAP. That's not the way you provide good therapy. If a patient has a problem, it needs to be diagnosed now, and then therapy has to start right afterward. That's how we work it here. You decide you need to be tested, so you come in today, go home tonight, and have your ambulatory sleep study—and if it turns out you need it, you're on CPAP tomorrow morning."

COUNTING SLEEP

Ambulatory sleep studies have been offered by Progressive Medical for about 1 year. They are conducted using a compact portable system known as the Watch-PAT 100. Made in Israel, "the Watch-PAT 100 is the only FDA-approved ambulatory sleep system for diagnosing sleep-disordered breathing," Kent says. "In double-blind studies, the Watch-PAT 100 was found to be just as accurate as a sleep lab polysomnographic study."

The device is worn by the patient on the nondominant hand throughout the night of testing. "The patient doesn't have to be connected to an array of wires for the unit to record sleep," Kent adds. "The patient puts the device on their hand, activates it, and goes to sleep. It's very simple."

Come sunup, the patient brings the loaned HIPAA-compliant Watch-PAT back to Progressive Medical. There, the data the device collected is downloaded and transmitted via e-mail to a sleep physician under contract to Progressive Medical and located in another part of Southern California. The data is interpreted before the patient leaves the Progressive Medical office. "Having the report of findings produced so quickly allows us to immediately start the patient on CPAP if our interpreting physician prescribes it," Kent says.

"There are never-before-possible opportunities for growing an ambulatory sleep study business." Helen A. Kent, RRT Progressive Medical

Patients make their way to Progressive Medical by various avenues. One is self-referral. "There has been a lot of media attention given to the problem of OSA, and that has resulted in us seeing an increase in inquiries from consumers," says Kent, who indicates that her company has contributed some broadcast buzz of its own. "We've started airing a commercial on cable television, our first ever. And we're getting a lot of responses. The commercial targets younger patients because we think we can have the greatest health impact on patients if we catch them at an age before they develop heart conditions, before they start having high blood pressure."

Another avenue is physician referral. Mainly, it is otolaryngologists, followed by neurologists, family practice doctors, and—increasingly—cardiologists, who send the most customers to Progressive Medical. The fewest referrals come from pulmonologists; Kent isn't sure why that is.

REIMBURSEMENT AND GROWTH

Fueling the growth in ambulatory sleep studies is the amenability of many payors to reimburse adequately for the tests. These include CIGNA, Blue Cross, Blue Shield, Adventist Health, HealthNet, and almost every IPA in Southern California. Still, more than a few other payors do not reimburse at all, Medicare being the leader of that pack.

Reasons run the gamut as to why Medicare and others refuse to reimburse for ambulatory sleep studies, but Kent believes the chief explanation is a lack of awareness about the diagnostic quality of the technology now available. "I think these payors will start giving serious consideration to reimbursing once they realize that they can obtain a polysomnographic-comparable ambulatory sleep study for $300 or $400 versus the $1,500 to $2,000 they now are spending for each lab study," she says.

Kent has made it her mission to educate nonpaying payors about the value of ambulatory sleep studies. She holds out hope that someday even Medicare will end its opposition. "There are more than 80 million people who have sleep apnea, but brick-and-mortar sleep labs can process at best only 1.5 million patients a year," Kent says. "Now that we have the technology for reliable, accurate, diagnostic-quality sleep studies in the home, Medicare would be making a mistake if they continue refusing to reimburse for this. If Medicare would reimburse, it would help relieve the backlog at labs and allow many people who need to be tested for OSA and other sleep-disordered breathing conditions to be accommodated."

Of course, there is nothing to stop Medicare patients who want OSA testing and treatment from paying for services on their own. "Many of them do already," Kent says. "They become frustrated by what Medicare is doing, and they decide they no longer can live with the discomfort of OSA. That's when they open their wallets."

NOT A VOLUME BUSINESS

Progressive Medical operates from 3,800 square feet of commercial/medical office space, open weekdays from 8:30 am to 5 pm (there are plans to keep the lights on until 6 pm, and there is always at least one sleep-trained respiratory therapist on call for after-hours emergencies). The facility includes two patient rooms for CPAP mask fittings and other types of evaluations. In the back is a conference room used routinely for patient education sessions covering the CPAP machinery and accessories.

Progressive Medical's preferred brand of CPAP is ResMed. "We like the performance of the ResMed flow generator; it makes things a lot more comfortable for the patient—and comfort promotes better compliance—which results in greater efficacy of therapy," says Kent, who mentions that she is partial as well to the ResMed Servo-Ventilator for cardiac patients.

Ancillary products available through Progressive Medical are limited largely to snore pillows and mask cleaner wipes. But they are important contributors nonetheless to the company's income stream. Kent says, "Right now, we derive about 20% of our revenue from soft goods alone."

It is worth noting that, nationally, 15% of sleep labs dispense CPAP following a sleep study. That tracks fairly close to the situation in and around San Diego. However, Kent is not bothered by that. "As long as they can do a good job providing service and education to the patient, that's all I really care about," she says. "I think, though, that my company plainly does a better job of educating patients. For example, when patients are first prescribed CPAP, we show them a video of a sleeping man undergoing a full polysomnographic study who experiences 22 apnea incidents an hour. The video shows him snoring away, then suddenly he stops breathing for these frighteningly long periods and, afterward, restarts his breathing with a jarring snort. The patients who watch this video are absolutely shocked by what they're seeing. It primes them for very good compliance."

Kent contends that providers who want to offer ambulatory sleep studies would do well to recognize that sleep is not a volume business. "That's why I'm not going to get involved with Medicare's national competitive bidding, which will require this to be treated as a volume business," she offers. "If I'm not going to be paid enough to do a superior job with the patient, then I'm not going to take that business. But that's exactly the situation national competitive bidding will create—a situation where the bid ends up having to be so low that we can't give patients the quality service they require. For me, growth requires an emphasis on quality. The pursuit of quality guides everything we do here at Progressive Medical."

THE DREAM BEGINS

Kent founded Progressive Medical in 1983 in the garage of her Carlsbad home after spending most of the year prior working for an oxygen provider doomed to closure. In its earliest days, Progressive Medical was devoted exclusively to home oxygen—tanks and concentrators. Not long after that, Kent added ventilators to her product mix (many of the patients served by the company in those days were respiratory-compromised infants; Kent attracted that demographic because of her background as a neonatal intensive care unit respiratory therapist).

CMS Considering Recognizing
Home Testing

CMS will be re-examining its national coverage determination for the diagnosis of sleep apnea patients who need CPAP. The question: Should diagnostic tests—other than just facility-based polysomnography—be allowed? According to CMS, the formal request from the American Academy of Otolaryngology (AAO) is to remove the current requirement for facility-based polysomnography."

The reconsideration is open to a 30-day comment period, and comments can be submitted to CMS through its Web site: www.cms.hhs.gov. The AAO is urging people to "voice their support for the use of multi-channel home sleep testing devices as an alternative to sleep laboratory-based sleep studies (such as polysomnography)."

Currently, CMS does not cover the use of home sleep testing devices, a decision that directly impacts coverage decisions by other third-party payors. According to the AAO, "Under the current system, patient diagnosis and care is hindered by a system that limits coverage to facility-based polysomnography in a sleep laboratory. The current system creates access problems for patients due to high demand, a lack of sleep laboratories in some areas, and discomfort among patients uncomfortable with testing in a lab."

Around 1990, California's Medicaid program—MediCal—ran into a budget crunch and was forced to pay IOUs to providers like Progressive Medical. After 3 months of collecting paper promises for future reimbursement, Kent faced a looming financial disaster of her own. So she exited the pediatric oxygen business, altered her business strategy, and reemerged with a focus on managed care contracting of a broader range of HME products and services.

"We still offered respiratory, and added to that rehab items like walkers, canes, wheelchairs, everything," she remembers.

But by 1999, Kent was asking herself whether Progressive Medical perhaps had grown too big, too fast. The answer was yes, it had. "That year, we lost our key HMO contract, which meant I had to downsize again by letting go many of my employees, moving into a smaller facility, and rethinking what I wanted to accomplish," she says.

That turned out to be a good thing. Kent never was really comfortable with the industrial-grade character of Progressive Medical during this phase. Now she had an opportunity to rein in the company and refocus it in a direction more to her liking. What she opted for was an enterprise dedicated to the treatment of sleep-disordered breathing, the one facet of Progressive Medical that gave her the most satisfaction during the company's time as a broader-scope provider.

Actually, sleep in one form or another has been part of the Progressive Medical story since the 1980s, when Kent hired a therapist with a strong background in sleep medicine. "She and I had quite a few serious talks about sleep," Kent says. "She convinced me that, in home care, sleep was where the future was going to be someday. This was 20 years ago."

Colleagues at the time thought the prediction was unlikely. But despite their well-intended attempts to dissuade Kent from venturing into the sleep arena, she did just that by initiating an in-home sleep study service. "We had acquired a pair of 13-channel test systems that we would set up in homes for overnight studies under the watch of a trained technician," she recounts.

This service proved fairly lucrative for Progressive Medical. Gradually, though, payors one by one decided to reimburse for studies performed only in a sleep lab setting. "Insurance companies felt they could get a better deal from the labs," Kent explains.

Progressive Medical conducted its last technician-monitored sleep study some time in the middle of the 1990s. "But," Kent says, "we continued to provide PAPs and oxygen. Those products did very well. We also did well for a time with four-channel, nondiagnostic devices for the screening of sleep-disordered breathing conditions."

Over the years, Kent has seen many changes in sleep medicine technology. "In the old days, the only way we could gauge efficacy of CPAP therapy was by asking the patient how he felt," she says. "And all we could do was take the patient's word for it. We could not do a sufficiently good job of monitoring therapy effectiveness.

"Today, however, the CPAP machines we're using have the ability to capture performance data, which tells us whether the pressure is set at the most effective level for the patient, whether the mask is leaking, and more," she continues. "We can then use those insights to demonstrate the efficacy of what we're doing. Thanks to improvements in equipment technology and mask design, patient compliance is the best it's ever been."

Rich Smith is a contributing writer for  HME Today.