Is There Room in Sleep for Both of Us?

How Sleep Labs and HMEs Can (and Should) Work Together

• By Elisha Bury
• Sep 01, 2007

In an April 2007 Wachovia study on the HME sleep market, 47 percent of HME providers surveyed reported that their businesses had been impacted by sleep labs that sell sleep equipment.With sleep labs taking up that much of the market, are providers in danger of losing profitability and viability in the sleep market? Respiratory Management went to sleep providers and industry experts to find out what providers are doing to maintain a mutually rewarding relationship with sleep labs. If done right, the relationship could boost business for both parties while driving patient compliance.

Competition or Business Partner?
At Home Care Medical in New Berlin,Wis., sales consultant Colleen Zinda agrees that many sleep labs are selling sleep equipment. “Yes, that’s definitely a trend,” she says. “That has affected our business somewhat, but our business is very contract driven.”

In fact, the company has more than 80 managed-care contracts, according to Donna Smith, BA, CRT, Home Care Medical’s manager of respiratory services, and so is able to service the majority of patients in the area, especially since the local sleep labs may have only two or three insurance contracts.

“In one way, they are competitors; but in another, they’re not,” says Smith.

Zinda has worked hard to ensure that local sleep labs come to rely on Home Care Medical. She does this by acting as the liaison between the sleep lab, the HME clinical staff and manufacturer representatives for in-services, and by constantly asking sleep labs what they need. Zinda says it’s important to offer the latest technology as well.

“I really think it has a lot to do with finding out about their challenges, and then just trying to provide those services and products that they need,” Zinda says. For instance,— sleep labs often need CPAP compliance information, but that information often just goes to the physician. “We developed a process so that we made sure that the sleep labs also got that information,” she adds.

In San Diego, however, Terry Racciato, president of SpecialCare, says the sleep labs she works with are not selling HME equipment. “They don’t have any desire to go into the DME business, and we don’t have any desire to go into the sleep lab business,” she says. That’s one thing, Racciato says, that has contributed to the success she’s had with two local sleep labs.

Nationwide Respiratory President Tom Pontzius says that even when sleep labs offer products, providers still typically get Medicare patients. He says providers have other opportunities with sleep labs as well.

“There are opportunities, in my opinion, to partner with a sleep lab to contract services, (such as) follow-up services for patients (and) visits to patients’ homes,” Pontzius says.

In some cases, providers that Pontzius works with are partnering with sleep labs for co-marketing or marketing and sharing the patient revenue.

Sleep Success
Racciato doesn’t make any guesses about what she’s doing right with her local sleep lab partners. She asks them what makes the relationship work. The answer? Providing a quick response, good patient feedback, good communication and excellent service.

It’s a philosophy that also has worked for the staff at Home Care Medical. Zinda says when she first started working at the company three years ago, her first step was to go to the sleep labs to find out what makes their companies tick. She asked about their processes and the difficulties they had treating patients. Then Zinda took that information back to Home Care Medical.

As a result, the company launched a respiratory therapy improvement team. “We have improved so many different processes that have really benefited patients so that they can get good quality care,” Zinda says. “What we hear so often is that patients give up with their CPAP therapy, so (we are) trying to bridge that gap and make sure that doesn’t happen, and that the sleep labs and the physicians get the information they need.”

Smith says the therapists at Home Care Medical do a lot of one-on-one services with patients and follow up with both the physician and the sleep lab to ensure everyone is involved in the process.

“Sometimes, a physician orders a particular mask and (the patients) get there, and during the fitting see another mask that will work better,” Smith says. “We’ll call the physician or sleep lab and tell them there’s a mask that will work better.”

Zinda follows up once or twice a month with the sleep lab as well to make sure everything is working smoothly.

While offering sleep labs on-target service is important, providers must also choose sleep labs carefully. Racciato has some advice about what she looks for in sleep labs: excellent communication skills, loyalty and a good product. Her goal is to make the experience as seamless as possible for the patient, and that means finding a sleep lab that works well with her team.

Is In-Home Sleep Testing a Threat?
With CMS’s decision pending on in-home sleep testing (See Respiratory Funding Update, p. 34), it might just be sleep labs that become worried about competition. If CMS approves in-home testing, providers could enter the diagnostics realm of sleep.

Racciato acknowledges that sleep labs might be concerned about that prospect but says she doesn’t expect her relationship with sleep labs to change much. “In essence, what we’re looking at is an increase in business for both of us that hadn’t existed previously,” she says. “We think that that’s going to work out well because we’re gong to be able to shorten the length of the system from the time that a patient is identified to the time that the patient is served. And by doing so, hopefully, we’ll increase their health and we’ll increase their compliance.”

Pontzius sees two sides of the topic. “You have one camp that says, ‘This is great,’ and another camp that says, ‘This is horrible. What’s going to happen to my lab?’ ”

The realistic role for sleep labs is to advocate for and administer these tests, he says, and just because providers offer the tests doesn’t mean the labs will be cut out of the loop. “The study still has to be scored and it still has to be interpreted,” he says. “There’s going to be a position for a sleep lab to do those or offer those services.”

Turning Partnership into Prosperity
Smith says the best way to make the partnership prosper is by offering “service with integrity.” That means be honest with sleep labs, know what you’re selling, visit the labs as often as you can, solve problems willingly, give good service to the sleep lab and its patients, and go the extra mile to investigate any problems.

“I think it all comes down to basic relationship building techniques and listening to those providers to find out what they really need,” Zinda says. “I just think that takes time.”

One thing to consider is how to establish a win-win relationship. “How do you make the pie bigger as opposed to how do you gobble up the slice before the other person can get it?” says Racciato.

Training the Sleep Lab
International Sleep Network (ISN), based in Iselin, N.J., is changing the way sleep labs treat sleep apnea patients with its Health & Wellness Program. The theory goes something like this: Since most obstructive sleep apnea patients are overweight, a nutrition and exercise program might improve patient health while injecting life into the revenue stream.

It’s a theory that seems to be working.

“Over the course of 18 to 24 months, we’re actually able to get 25 percent of our patients off CPAP just by losing enough weight, which is a great thing for them,” says Vivek Garipalli, ISN founding partner. “It gives the patient a lot of hope, and it actually, believe it or not, increases the compliance rate on CPAP because they feel now that CPAP is a component of helping them lose weight, and it’s a component of the exercise program.”

The program provides the tools necessary for weight management, with registered dieticians to review meal plans and conduct metabolic testing to determine the proper caloric intake needed; licensed clinical social workers to administer talk therapy for weight loss; and a full-fledged clinical exercise program that monitors patients’ moves. An online component reaches patients who aren’t comfortable with face-to-face consultations.

In partnership with Kingley Institute, ISN has made great headway with insurance companies. The program, housed inside sleep labs, targets other co-morbidities of obesity, including heart disease. As a result, insurance companies are happy to reimburse for the nutritional and behavioral consults. Patients pay out of pocket for the exercise program, which is roughly $80 per month, or approximately the cost of a gym membership.

Because the staff dietician is listed with every national insurance company, leads for the nutrition program often generate leads for the sleep lab because many patients who come in for the nutritional program also have sleep apnea. That, in turn, increases business for HME providers.

Garipalli says the program does two things for HME providers — increases the volume of CPAPs sold and increases the volume of CPAP supplies sold.

“Being compliant with the CPAP is an integral part of a good exercise program,” Garipalli says. “Obviously, staying on CPAP helps you stay alert during the day. … You have a little more energy. And that’s a big part of the compliance end because once a patient is put on a CPAP, the only way you can really grab them again is if you can set up another consultant for them to come back in; or you’re hoping the sleep physician, when they see them again, is asking the right questions. Well, now you have them coming in two, three times a week over a course of the first two months, which we all know
is the most vital period to make sure that patient is compliant on the CPAP.”

How Are YOU Working with Sleep Labs?
“I called them (two sleep labs) and said, ‘So, what are we doing well for you? You’re sending us a lot of stuff. … From your perspective, how’s it going?’ And their response was that they really like the quick response, the customer service, the customer feedback, the good communication and the excellent service. It ultimately gets down to service.” —Terry Racciato, president, SpecialCare, San Diego

“We bring in the respiratory therapists and/or the manufacturing reps to in-service staff in sleep labs so that they’re up to date on the latest products.” —Colleen Zinda, sales consultant, Home Care Medical, New Berlin,Wis.

“Providers are partnering with sleep labs and doing some co-marketing or marketing for the sleep labs and sharing patient revenue and doing joint venture DME type operations for sleep therapy.” —Tom Pontzius, president, Nationwide Respiratory

This article originally appeared in the Respiratory Management Sept/Oct 2007 issue of HME Business.