CPAPs: Look before you leap, attorney says

Wednesday, November 30, 2005

AMARILLO, Texas - Providers waking up to the growth potential of the CPAP market must be alert to legal obligations, lest they find themselves violating certain laws.
"I think a lot of it is not so much lack of knowledge, it's more leaping before they look," said Clay Stribling, an attorney with Brown and Fortunato in Amarillo, Texas. "People hear about an opportunity for a sleep lab venture and they get so excited about it they enter into some sort of arrangement too quickly."
Growth in the CPAP market is projected to rise 15%-20% over the next year, creating a huge demand for providers to sell equipment and supplies and offer OSA programs. Confusion arises for providers who see large numbers of physicians investing in sleep labs and think the physician has found a way to legally invest in HME, Stribling said.
Stark law prohibits physicians from making referrals to an HME if the physician has a financial interest in the HME. But, said Stribling, Stark is not a primary concern because the process of testing patients for sleep apnea is not a designated health service under the law.
Problems arise when the physician investing in the sleep lab tries to either invest in or get some payment back from an HME company in exchange for sending their patients for HME. Such an arrangement could run afoul of Medicare anti-kickback laws and various state laws that govern referral relationships and compensation for referrals.
Stribling recommends hiring someone to do a state law analysis to verify what laws might be implicated for providers looking to enter the sleep market.