Provider Perspective
Consciously Choosing Sleep
Progressive Medical in Carlsbad,
California, reaps the greatest
rewards by specializing in sleep
therapy. In a recent exclusive
interview with RSM, owner Helen
A. Kent, BS, RRT, explained why.
Discuss the origins of your business,
and how it has evolved over time.
Helen: I started Progressive
Medical in 1983, doing exactly
what I knew best: providing respiratory
care to children. Before my
homecare beginnings, I was a
neonatal specialist at Children’s Hospital Intensive
Care Unit. So, “the babies” followed me to their homes
when I started this company. Then in 1992, the state of
California could not balance its budget, and vendors
without deep pockets—like Progressive Medical—took a
hit. The State of California ended up issuing IOUs for
the care of these babies. As I remember, the State
issued these IOUs for about 3 months. I had to meet
payroll and pay my vendors at net 30, so I sold the
IOUs to the California Public Employees Retirement
System (CALPERS) for 50 cents on the dollar.
After downsizing and having to lay off my neonatal
therapists, I decided that I wasn’t going to specialize in
neonates anymore and that I could not count on the
State of California for payment through the MediCal
system. Back in those days, the discharge planners
wanted a “one-stop shop” so that they would only have
to make one call to discharge a patient to the home. In
order to compete, I thought that I could provide all of
the things necessary to be the “one-stop shop.”
Progressive started to carry and dispense all forms of
home medical equipment including walkers, w/c, beds,
rehab items, and respiratory and sleep products,
including diagnostic 13-channel sleep studies and the
equipment to treat sleep disordered breathing (SDB).
Back then, we had techs going into homes and
performing sleep studies in the patient’s home. It was
a one-to-one encounter.
How did you transition to the sleep market?
Helen: There weren’t many people who knew about
sleep or sleep studies when we got started in the early
1990s and there wasn’t any equipment meant for
ambulatory studies. Our first system was through
Sandman, who helped us by modifying one of their
systems for the home.We were paid approximately
$1,500 for a 13-channel polysomnogram test
performed in the home and we were able to keep the
patients that tested positive. The PAP equipment cost more back then, but the profit margin was much
higher than it is today. Soon we found ourselves with a
contract with University of California San Diego
(UCSD) Hospital and with Sharp Mission Park and a
nice big building for our business.
Who is your “typical” client?
Helen: Our patients are from the neuromuscular
community and the sleep-disordered-breathing
community. About 25 percent of our patients are part of
the neuromuscular patient community here in San
Diego. These patients need non-invasive ventilation
either by bi-level or pressure support. The other 75
percent are sleep-disordered-breathing clients. These
patients are much younger.We do not provide services
or products for anyone under the age of 17. The average
age of our clients is probably around 50 years of age.
Describe your staffing.
Helen:We have two therapists and one tech to help
support our patient population.We have office support
staff but we rely on our business management software
company (Brightree) to do our billing and collection.
How have the last few years of reimbursement changes
affected your business?
Helen: Well, this industry is at the mercy of the
people who pay us. The truth is that CMS has dealt
some terrible blows to this industry. It’s difficult when
this happens because you know that it’s nothing
you’ve done as a businessperson. Even the other
payers have decreased their reimbursement.
We know that sleep disordered breathing is on the rise. How
do you envision the current funding scenario, especially the
debates surrounding home sleep testing and portable sleep
testing equipment, playing out?
Helen: It’s really very simple. If we don’t take care of
the baby boomers now, we’re going to see a huge mess.
By decreasing funding on the prevention end, we are
sentencing them to a life full of chronic diseases and
the system will be burdened with even greater costs.
How has the economic recession affected your business?
Helen: We’ve noticed that our clients are now asking
how much things will cost. They ask us, “How much is
my co-pay?” “How much is my deductible?” The
problem is that we can’t really tell them how much
their co-pay is because each insurance plan from each
company, except for Medicare, is different. If we try to
estimate, we end up with egg on our face because the
figure isn’t always correct. So we just say we don’t
know and we bill the patient when we get the explanation
of benefits from the insurance company. However,
we collect deductibles upfront.
What are your three greatest challenges?
Helen: As I’ve said, the first challenge would have to
be all of the huge reimbursement cuts that this
industry has had to withstand while it is much harder
to get paid for our products and services. The second is
the looming competitive bidding experiment, which
concerns me. However, I went to a competitive bidding
seminar and the expert that taught that seminar said
that he doubts that round two of competitive bidding
will ever get off the ground. I sure hope he is correct.
The third challenge has to be staying compliant with
all of the changing laws and regulations affecting us,
like accreditation, the new surety bond, the new guidelines
for payment of PAPS, and the new supplier standards.
There is so much to stay on top of to keep your
Medicare supplier number and your license in this
industry that it is my full-time job just trying to maintain
compliance. This industry has certainly changed
since 1983 when I started this business in my garage.
The barriers to entry are huge.
What do you find most rewarding about what you do?
Helen: My rewards come when we get a sleep-deprived
patient whose wife has forced him to come to us
because he snores. He may start out very grumpy and
not really willing to listen or learn. He will say that his
quality of sleep is okay and he feels fine.We tell him that
he has been so sleep deprived that he no longer knows
what it is to feel fine. Then after a few days on therapy,
we’ll talk to that patient on the phone and he’ll tell us, “I
slept for 8 hours!” Or, “I had a dream last night! I can’t
remember the last time that happened!”We can’t fix a
COPD patient or a patient with progressive restrictive
lung disease, but we can fix patients with sleep-disordered
breathing problems. Now, that is rewarding!
*See High Touch Software in this issue for more on how Helen uses
software for her company’s billing processes.—Ed
This article originally appeared in the Respiratory & Sleep Management November 2009 issue of HME Business.