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Treating sleep disorders can wake up your bottom line


The prevalence of sleep problems, combined with a growing array of user-friendly devices for conducting home sleep tests, represents an opportunity for primary care physicians to add a new income stream and improve the quality of life for many of their patients.


Approximately 20 million American adults are thought to experience symptoms of sleep disorder, primarily obstructive sleep apnea (OSA).  That prevalence of sleep problems, combined with a growing array of user-friendly devices for conducting home sleep tests, represents an opportunity for primary care physicians (PCPs) to add a new income stream and improve the quality of life for many of their patients.

At the same time, experts and physicians with experience in the field warn that it’s important to be aware of the pitfalls surrounding sleep testing and treatment. For example, training and licensing requirements for reading the results of sleep tests differ from state to state, and the coding and billing for sleep testing services can be tricky. And as with any ancillary service, you need to be sure you have a sufficiently large patient base to make it profitable.

Nonetheless, the trend-and opportunity-are apparent. The prevalence of sleep disorders has been growing in recent years. According to a National Ambulatory Medical Care survey, physician office visits for sleep apnea rose from 2 million in 2000 to 3.7 million in 2009, an increase of 85%. The percentage increases in visits for insomnia and narcolepsy were even greater-137% and 133%, respectively. In addition, a growing body of research links OSA to conditions such as hypertension, diabetes, depression, and obesity.              

Although no specific data exists regarding the number of PCPs offering diagnosis and treatment for sleep disorders, internal medicine physicians account for about 9%, and family practice physicians about 2% of the in-laboratory diagnostic sleep studies billed to Medicare.

Benefits of home sleep tests

PCPs cite a variety of reasons for  the decision to offer home sleep testing services to their patients.  Jack Maxwell, DO, got interested in sleep disorders about 8 years ago, largely because of their link to chronic conditions such as hypertension, elevated cholesterol, and diabetes. His interest led him to become board-certified in sleep medicine, a relative rarity among family practitioners. Today his eight-provider practice in the Dallas, Texas suburb of Lewisville orders 80 to 100 sleep tests each year.

Because he is board-certified, Maxwell is qualified to interpret the results of home sleep tests, and thus able to bill for all three components of the testing process-test administration, interpretation, and CPAP initiation and management. Consequently, he says, each patient treated for sleep disorders brings about $1,500 in revenue to the practice, compared with approximately $360 for other patients.

Some patients initially resist taking a sleep test or using CPAP, but Maxwell usually is able to persuade them. “A lot of it is salesmanship,” he says. “You start talking about how the heart is damaged by long-term obstructive sleep apnea, and they get the picture pretty quickly. And I’ve been in practice long enough (26 years) that my patients trust me and will go in the direction I try to steer them.”

For PCPs thinking of offering sleep disorder diagnosis and treatment as ancillary services, Maxwell advises including sleep-related questions as part of the screening process for routine medical care, partnering with a reputable sleep lab that employs licensed technicians, obtaining continuing medical education credits on sleep diagnosis and treatment, and learning the appropriate billing codes for polysomnograms and CPAP titrations.

Barrett Tilley, MD, began offering home sleep testing in his Fremont, California family practice in 2011. The practice already offered in-house testing for cardiac, lung, and a variety of other diseases and conditions, so when medical device manufacturer Midmark asked to use his practice as a test site for at-home sleep testing equipment, Tilley readily agreed.

Tilley sends test results to a board-certified sleep specialist for interpretation, but his practice is paid for the test administration component of the service and, where needed, for initiation and management of continuous positive airway pressure (CPAP) therapy.

The financial impact of sleep studies has been “significant enough that it’s worth having in the office, equal to or better than most other in-office procedures,” Tilley says, but declines to provide specific revenue numbers. “I think it’s a very beneficial test to offer in a primary care office,” he says. “It’s simple, it requires little time to discuss with the patient, and the follow-up time is short. I can’t think of a reason not to have it.

“The impact has been dramatic”

Anne-Marie Feyrer-Melk, MD, a cardiologist and owner of Heart of Arizona Optimal Care in Scottsdale, Arizona, began offering home sleep testing earlier this year, partly in response to patients’ resistance to the inconvenience and cost of laboratory sleep studies. Many of the practice’s patients have high-deductible insurance plans and were paying up to $700 out-of-pocket for the tests, says Steven Feyrer-Melk, PhD, the practice’s director of patient wellness.

“We’ve only been offering it (home sleep testing) for a few months, but the impact has been dramatic,” he says. “The reimbursement’s been great, it’s been easy to implement into the practice’s operations, and the patients love it,” he says.

As with any ancillary service, Feyrer-Melk says, the decision to add sleep services was guided by patient service and financial considerations. “They go hand in hand,” he notes. “We’re always looking for services that can help our patients, but let’s face it, we’re doing this as well to improve our bottom line. That’s part of the business.”

George G. Ellis Jr., MD, an internal medicine practitioner in Youngstown, Ohio, and a Medical Economics advisory board member, began offering home sleep tests to his patients in 2012.  “I can provide better quality care at a more affordable cost this way,” he says, noting that an in-facility test can cost as much as $5,800, compared with $200 to $400 for an in-home test.

“The reduced cost will allow more patients to have the study done,” Ellis adds. “Also, doing home tests allows me to follow my patients post study, and allows for less referrals and tends to make the patients more compliant with treatment.”

Leasing home testing equipment makes sense if a practice can’t afford the purchase price, according to Keith Borglum, CHBC, a practice consultant with Professional Management and Marketing in Santa Rosa, California, and a Medical Economics editorial consultant. Otherwise, says Borglum, it is usually more financially advantageous for a practice to finance the purchase. “When you do a lease it becomes a cash-flow issue, and there’s always that leasing company in the middle that has to make money somehow,” he says.

Financing is especially attractive in the current low interest rate environment. “The bankers tell me that money now is the cheapest it’s ever been for physicians looking to finance or re-finance something,” Borglum says.

Reimbursement policies differ

When treating patients covered by Medicare, it’s important to keep in mind that the reimbursement policies of local Medicare Part B carriers may differ from those of  equipment providers, says Marc Raphaelson, MD, a neurologist practicing in Leesburg, Virginia and a member of the health policy committee of the American Academy of Sleep Medicine and a sleep medicine consultant to the National Institutes of Health Clinical Center.

“There are only four DME carriers, and they have uniform criteria for therapy coverage, Raphaelson says. “To the extent that these rules differ, a patient might have a covered sleep test but then might not qualify for treatment coverage. For example, a patient might have a polysomnography (PSG) interpreted where the Part B carrier does not require the interpreting physician to be board certified or eligible in sleep disorders. In that case the test might be covered, but CPAP would not be covered, since the DME carrier requires the PSG to be read by a certified physician.”

The prevalence of OSA and its links to the diseases and conditions PCPs often must treat or manage has led some in the sleep field to wonder why more PCPs aren’t offering diagnosis and treatment for sleep apnea. Edward Grandi, executive director of the American Sleep Apnea Association, says PCPs should routinely be asking about sleep issues, using validated screening questionnaires, as part of the patient intake process.

 “I think the technology for testing has gotten much more user-friendly and PCPs could be doing it more often,” Grandi says. “My experience has been that sleep is not an issue on most PCPs’ radar. Unless the physician has determined that a significant number of his patients have [OSA] they’re not really going to focus on it.”

Richard Simon, MD, began researching sleep disorders and offering home sleep testing in his Walla Walla, Washington internal medicine clinic in the early 1990s, becoming board-certified in 1996. He soon found himself getting referrals from all over the region. Eventually he gave up primary care to focus exclusively on treating sleep disorders.

Today Simon is medical director of the Dement Sleep Disorders Center, part of Providence St. Mary Medical Center in Walla Walla. He believes more PCPs would test for sleep apnea if they weren’t already so busy. “They have to work so hard, and for such little reimbursement, that these people (PCPs) are just stressed all the time,” he says. When he added sleep medicine to his primary care practice his reimbursements went up significantly, “but basically it was because I was adding a whole new service line. I wound up working 7 days a week for about 3 years.”

Persuading patients to get a full night’s sleep

Although he is sympathetic to the barriers PCPs face in offering sleep testing, Simon also thinks many of them overestimate the time and effort involved. “Most of sleep medicine is just about trying to persuade the patient to get 7 to 8 hours sleep each night on a regular schedule, and minimizing caffeine and other stimulants,” he says. If the patient snores, ask him or her to take an at-home sleep test for apnea, and if the results are positive, prescribe CPAP. “If the patient does well, you’re home free. If he or she doesn’t, you refer at that point,” he says.

Other PCPs who offer home sleep testing caution that the tests have limitations. “I think home sleep studies are generally sufficient for diagnosing OSA. Where they fall down is if the patient has other sleep disorders,” says Susan Wilder, MD, founder and chief executive officer of LifeScape Medical Associates, a five-provider family practice, and LifeScape Premier, a concierge practice, both located in Scottsdale, Arizona. “The tests don’t give you more complex monitoring, such as an electroencephalogram. Sometimes the data doesn’t jibe with the symptoms the patient describes. So there are times when the patient needs a high-quality sleep lab study to do justice to their needs.”

LifeScape stopped offering home sleep tests earlier this year because of problems with the company providing the testing equipment, but Wilder says the practice hopes to resume soon. Before deciding to stop, the tests were producing between $10,000 and $12,000 in revenue annually. “It was a pretty small component (of the practice’s total revenues) but we thought we could provide the service better and more conveniently for patients than going to a sleep lab,” she says.

Adds Tilley, “With anything we do in primary care, (I feel) it’s better to do it in the office so we can have control over it,” he says. “I ordered the test; I have the results, and I’ve got that patient in my office and can say ‘this is where you can make a difference in your health.’ And any time a primary care office has additional tools for screening and diagnosis that we can get professional fees for, it’s beneficial to that office.”


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