Rearview 2012: Sleep, diabetes feel squeeze on all sides

Friday, December 28, 2012

Sleep therapy is such a booming business that it’s hardly surprising sleep-related stories once again dominated the specialty provider sector in 2012. However, unlike with 2011, which saw a handful of potentially positive changes for providers, this year’s top sleep stories highlight various encroachments on the market.

Far and away, the biggest issue was CMS’s requirement that providers prove supplies are “non-functioning” before they can replace them (“CMS does about-face on re-supply items”). Not only was this change in conflict with how providers typically do business, it seemed to contradict the agency’s own quantity replacement guidelines. Adding to the confusion: Providers were initially left scratching their heads over how to follow the new rules because CMS said it didn’t plan to issue guidance.

Other top sleep stories feature a private insurer implementing more stringent requirements for coverage (“Private pay CPAP requirements go step further”); and a proposal by the American Academy of Sleep Medicine that would allow physicians to provide CPAP.

And, the list wouldn’t be complete without a story about an auditor behaving badly. Connolly Healthcare, the recovery auditor contractor in Jurisdiction C, started asking for proof of a qualified sleep study in cases where Medicare didn’t pay for the study—an overreach, said industry stakeholders (“Auditor makes over-the-top request”). Fortunately, CMS agreed and told the auditor to rein it in.

Speaking of audits, diabetes providers didn’t escape the spotlight either (“‘Rubber stamp’ approach leads to denials for diabetes claims”).

Audits aside, the biggest issue for diabetes providers in 2012 was competitive bidding. From major players rolling up smaller companies to CMS’s proposal to dust off inherent reasonableness to lower prices for retail supplies (“Retail diabetes: How low will CMS go?”), one thing is certain: The diabetes market is on the brink of big change in 2013.