Sleep Tech Tip of the Week

By Michael Miller, RPSGT

While the primary focus of a sleep lab is to diagnose and treat sleep disorders, the business aspect of the operation must continue to flourish in order to facilitate the highest level of patient care possible. Throughout the past year I have spoken with many sleep lab managers who have expressed apprehension about diminishing patient attendance, declining reimbursement rates for sleep testing, and the impact that home sleep testing (HST) will have on a sleep labs ability to continue to be a profitable endeavor. With many of the contributory circumstances, such as economic climate, increased unemployment rates, healthcare reform, and CPT/CMS changes, out of our direct influence it is best to embrace the current situation with pragmatic solutions rather than with opposition.

The following suggestions concentrate on the three primary areas of concern that face the business of sleep diagnostics in today’s environment.

1. Diminishing patient attendance — major media attention and focus on the economic climate has fueled a fiscally conservative way of thinking.  Coupled with unemployment rates for the US soaring to 10.6% in January of 2010, the highest in the past 20 years, it is easy to recognize why the US population has chosen to prioritize personal spending.  Based my own personal experiences when considering how to reduce monthly expenditures, I have shifted elective procedures and check up visits to the doctor’s office to the bottom of my priority list. Without some incentive to encourage patients to continue preventative medical maintenance practices, the decline in sleep lab visits may continue. One creative way that sleep labs have adapted to this mindset is to reduce or waive insurance co-payments in hopes of enticing patients to keep their appointments for testing.

2. Declining reimbursements rates for sleep testing — a projected decline in insurance reimbursement rates for sleep testing could reach 15% (per study) by the end of the year. This estimated projection is alarming for the majority of sleep labs who operate on a lean profit margin with the current reimbursement rates. One way that sleep labs are considering to improve their bottom line and increase their return of investment is to purchase more cost efficient diagnostic equipment. Physicians, lab managers and technologists realize that purchasing overpriced equipment yields no higher reimbursement rate and conversely contributes to a greater depreciation value of that overpriced equipment. Another method to offset waning reimbursement rates is to consider either rental or leasing options of sleep equipment. There are huge tax incentives for those labs that choose to rent equipment, allowing for tax credits on the full cost of the rental fee on a yearly basis.

3. Impact of home sleep testing (HST) — with most new technology there is often some apprehension that accompanies embracing and implementing new procedures, especially those that “threaten” your current business model. There is a perceived notion that HST is going to eliminate the need for traditional sleep labs. I believe that harmonious collaboration between HST and sleep labs is extremely beneficial. HST targets primarily those patients with sleep related breathing disorders only. HST is also aimed at those patients who typically would not visit a sleep lab unless their life depended on it. The sleep lab, is still without a doubt, the best environment for CPAP titration studies and for the diagnoses of the other (85+) sleep disorders that need to be treated. HST is not a tool intended to eliminate sleep labs but rather to compliment them. At this point most sleep labs who have implemented HST are using the devices as a marketing tool to gain new referrals for their practice. With the average HST reimbursement rates remaining below $200 per test there is no direct “threat” that sleep labs will be replaced anytime in the near future.

The evolution of new business practices for sleep labs is crucial in today’s “economic and social climate”. Sleep centers who adapt to the above mentioned market changes will continue to experience growth and success in the competitive arena of sleep diagnostics. Don’t hesitate to contact me directly at (786)266-6600 or at mmiller@neurovirtual.com  to discover how Neurovirtual/Sleepvirtual can increase your return of investment and boost your bottom line.

Tags: business, business improvement, economy, healthcare reform, reimbursements, sleep medicine, sleep study, Sleepvirtual, Sleepvirtual BWII PSG