In-home testing no 'slam-dunk'

Saturday, June 30, 2007

Public opinion is mixed on CMS's review of its national coverage determination for OSA. Of 136 comments submitted, 41% favored home diagnosis, 52% opposed it and 7% don't know. Mike Matson, a senior analyst with New York-based Wachovia Capital Markets, believes that a ruling in favor of expanding coverage to include in-home sleep testing could accelerate growth in the CPAP market. But, in a recent interview with HME News, he said it's anything but a "slam-dunk" at this point.
HME News: Were you surprised that comments were so mixed?
Mike Matson: Not really. It's fairly controversial and people tend to fall on the side of wherever they see the most economic benefit. Obviously, a lot of the sleep doctors that run sleep labs aren't happy. It could be a threat to their income. And similarly, the polysomnography technicians aren't happy either, whereas a lot of the HMEs that sell the sleep equipment and the manufacturers of the equipment want to see it happen. In the end, it's more of a political decision than anything else.
HME: What kind of weight does CMS give the public comments? Matson: They are supposedly going to look at the clinical data and not take financial considerations into account. But, at the end of the day, this could save a lot of money for Medicare. But that panel is not overtly going to look at financial aspects and make a judgment as to whether or not home testing is effective or not.
HME: Wachovia gives the proposal a 50% chance of passing.
Matson: It's going to be close. It may happen, but it's not going to be a slam-dunk. From an economic standpoint, I think it makes a lot of sense. It's very politically fraught and I think the sleep doctors still hold a lot of clout and they are going to fight because it is a threat to them. Even if they stay in control of testing, they are probably going to get paid less.
HME: How could this impact the sleep labs?
Matson: I think it's a threat to the sleep labs. I don't think the sleep labs are going to go out of business, but it would slow down the growth. You still need sleep labs for patients with other conditions and maybe more complex types of sleep apnea. And some patients may prefer to go to sleep labs, some insurers may still only pay for a sleep lab, so they are not going to go away.
HME: How would this open up growth in the CPAP market?
Matson: Sleep labs are another hurdle the patient has to cross to get a CPAP. It's easier for the patient to do it in the home. There are probably patients whose doctors tell them to get a sleep study and they never do it. But if the doctor was able to give them something that allowed them to do it at home they'd be more likely to do it. I think any way you slice it, there's going to be more patients getting diagnosed and getting put on CPAP.