CategoriesCPAP,  Reducing Costs

How to Profit 
with CPAP Masks

Emerging technologies and lower cost alternatives present new opportunities.

With competitive bidding looming on the horizon, and reimbursements potentially being cut by 40-50 percent, many HME providers are looking for lower cost alternatives to save their profit margins. We at Sunset Healthcare Solutions sell masks from nearly every manufacturer, so we’re often asked about sales trends in the respiratory industry. Recently we have seen a spike in lower-cost masks, as providers are looking to turn away from masks that carry a hefty price tag. Also, masks that fit a unique niche in the marketplace are doing well, since HMEs want to stand out from their competition and explore alternatives that fit the specific needs of their clients. In this article we’ll explore some of the options available and what you should look for when selecting masks.

In terms of selecting a brand, we have found that while sleep doctors or labs might be partial to a certain brand because they like the sales rep who visits their office every week, studies have shown that end-users do not tend to have the same brand recognition for their mask. In fact, many PAP patients don’t even know the name of the mask they are using. Often patients are open to trying a new mask as long as it’s comfortable and works for them. So if you have doctors or labs who do not prescribe a certain brand of mask, you have the freedom to find alternatives that fit the needs of your patient while also saving you money. There are many types of masks in the market such as InnoMed, RespCare, Sunset, SleepWeaver or the new Tap-Pap mask that are lower cost than the traditional name brand manufacturers.

Above all, your masks need to work for your patient, so ask them what they are looking for and try to find a mask that fits those needs. For some clients, a lightweight mask might be the most important requirement, while others might prefer one that reduces red marks or eases their claustrophobia symptoms. Once you find out what your patients are looking for, do some research into alternatives to masks you currently buy:

•  Go online to review websites like cpap.com 
or cpaphelpdesk.com to see what other 
patients are saying about the masks you are less familiar with.

•  Ask manufacturers for samples to let your 
patients try them—many are happy to give 
customers a sample or free trial as a way 
to gain additional business.

•  If you are not able to get a free sample, most manufacturers have a money back guarantee so if you or your clients are not satisfied with the masks, you can return them at no cost.

We have had particularly good feedback on 
the following masks that are all available at 
a price that allows profit after competitive 
bidding reimbursements go into effect:

Nasal Pillows

RespCare Aloha Mask: It’s gotten great reviews on cpap.com, is very lightweight, quiet and has fully adjustable pillows to get a good seal.

TAP-Pap: This mask is new to the market and is already one of the top selling nasal pillow masks. It has a mouthpiece to hold it in place, so it completely eliminates the need for headgear.

Breeze SleepGear: This classic mask has been around for a while and continues to be popular with nasal pillow users because it doesn’t have straps against the cheeks and has seven pillow sizes to fit everyone.

Nasal

Sunset Deluxe Nasal Mask: Sunset’s newest nasal mask is extremely lightweight and has a replacement cushion for added reimbursement.

SleepWeaver Advance and Élan: If you haven’t tried a cloth mask yet, we recommend it. The Advance mask is one of our top sellers and the newer Élan is not far behind.

Full Face

Sunset Full Face Mask: This popular mask is the one-piece design that has the same features as the older generation Probasics Zzz-Mask that many patients loved. Probasics has discontinued the mask but it’s still available through Sunset.

Fisher & Paykel Flexifit 431: This mask features much of the same technology of their newer Forma mask such as the glider strap and under chin design, but it’s an older generation so it comes at a lower price. As a bonus, they included all three size cushions in the same box so you only have to stock one model.

Sunset Deluxe Full Face Mask: Available this April, this new Deluxe Full Face mask is ultra-lightweight because they removed the T-bar forehead support. That also created a clear line of sight which is great for claustrophobic patients.

If you try a new mask and isn’t exactly right for your patient, give that feedback to the manufacturer. You would be surprised by how often those little tips can make a big difference. When Sunset launched their new Deluxe CPAP masks earlier this year, we listened to the feedback from several of our customers and added some additional features, like an extra swivel at the connection, which would make the mask more comfortable for active sleepers.

CategoriesIn The News,  Reducing Costs

Competitive Bidding Update

Competitive Bidding Legislation

What it Means for CPAP Suppliers and How Sunset Can Help

Round 2 reimbursement amounts from Medicare were recently announced. This new competitive bidding legislation means there will be a lot of change in our industry in the next couple of years, especially for smaller stores who may not have the scale to remain competitive due to these new Medicare cuts.  Many HME registered for this process as of March of 2012 and are probably anxiously awaiting their fate.

This new legislation does not affect reimbursement amounts for private insurance; it only affects Medicare reimbursements at this time.   There are pros and cons to accepting a round 2 contract. As Elizabeth Deprey of HME News blogged earlier this week, some HMEs were relieved to be out of a Medicare contract. The high administrative costs of billing Medicare and time consuming government audits are draining and in the end, just not worth it for many smaller companies. The National Association of Independent Medical Equipment Suppliers (NAIMES) has put together an anonymous survey to gauge the end result of round 2 contracts.

The whole logic behind this legislation change is to protect consumer rights; ensuring companies are delivering the highest quality products to their patients at the lowest possible cost.  The bill is also a means for cutting the allocation of Medicare spending on these products by dramatically decreasing reimbursement rates. To give you a little more insight to specifics on how this might affect you, check out the new HCPCS Reimbursement by State. We also put together the chart below so you could better see an example of how HCPCS rates have changed across CPAP supplies specifically.

Product Reimbursement
2012*
Reimbursement
2013**
Difference Difference %
CPAP Tube 36.00 15.30 20.70 58%
Replacement Full Face Cushion 65.00 20.40 44.60 69%
Full Face CPAP Mask 170.55 99.00 71.55 42%
Nasal CPAP Mask 106.35 59.00 47.35 44%
Replacement Foam Filters 11.78 6.81 4.97 42%
Replacement Filters 4.88 2.38 2.50 51%
Headgear 32.00 20.40 11.60 36%
Chinstrap 14.50 11.01 3.49 24%

*reimbursement average 2012

**reimbursement Ohio 2013

As you can see, the average 45% decrease in reimbursement rates was no media exaggeration. Some products are affected more than others, for example, replacement cushions’ reimbursement rate decreased 69% while chinstrap reimbursement rates decreased by only 24%, with additional variances by state and region.

So what is Sunset doing to help our customers during these times of reimbursement cuts? We recently came out with a new deluxe line of CPAP masks that include a replaceable cushion and cost about 40-50% less than similar masks from leading manufacturers. We’ll continue to provide the lowest prices to our customers, whenever possible. We’re also looking to add more cash and retail items to our line in the next year so our customers can battle Medicare cuts with a boost to their cash sales.

In addition, we are backing a favorable alternative for home care providers, the Medicare DMEPOS Market Pricing Program.   This act will still reduce Medicare spending but would better accommodate smaller providers and preserve their ability to compete.  John Gallagher and the team with VGM government relations are making a stand for a new Market Pricing Program (MPP), if you’re interested in advocating this, check out VGM DC Link or AAHOMECARE.  Many people in the HME industry are going to be talking about this at MedTrade Spring 2013. So if you’re headed out there, keep an eye out for MPP news and updates. What do you think about the Medicare cuts and MPP? We would love to hear your feedback in the comment section below.

CategoriesOxygen,  Reducing Costs

Reducing Supply Costs

reducing_costs-o2

Shop around for oxygen supplies in the New Year.

Controlling costs on supplies isn’t a new concept for most oxygen home care providers. Unlike the CPAP market where suppliers are reimbursed for each product provided to patients, oxygen suppliers are reimbursed a flat rate for each patient, no matter how many supplies they provide. But with the Affordable Care Act and competitive bidding, suppliers need to push those cost savings even further.

When everyone is getting reimbursed the same amount, you don’t want to be the one paying more for your supplies. The biggest tip I can give you is to shop around. If your company has been purchasing supplies from the same manufacturer for years, this might be a great time to shop for new suppliers.

Are All Oxygen Filters Created Equal?

Off-brand companies frequently carry the same quality supplies or even the exact same products for a lower cost, but they don’t have the name recognition. Let’s say you purchase your oxygen concentrators from Acme Manufacturing. That concentrator comes with a foam filter that needs to be replaced regularly. Acme probably does not manufacture that filter; they likely purchase it from a supply company that makes various products such as foam pillows and mattresses in addition to filters. That foam supply company probably sells the same filter to multiple manufacturers and distributors, so in many cases you can get the exact same filter from a different company for a lower price.

Additionally, there are companies that focus mainly on replacement parts for all of the different manufacturers, sort of like the “AutoZone” of the oxygen industry. You can buy an air filter for your Ford Explorer directly from Ford, or you can go to AutoZone and get one for your Explorer and your Audi in the same place for a lower price.

Original Equipment Manufacturers (OEMs) like our fictional Acme Manufacturing or real companies such as Ford make most of their money on the original device like the car or the oxygen concentrator, not the filters, so they don’t focus on offering the best value for replacement parts like some other distributors and manufacturers do.

How-to Guide

The first step to finding better prices is to research supplier options. Industry tradeshows and publications like HomeCare and HME News are great resources to find other manufacturers and distributors who might offer the same products you are currently purchasing at a lower price. They may not be a name you recognize, but they might carry parts for many of the brands that are familiar to you or that you already carry like Invacare, Philips Respironics or DeVilbiss.

Reach out to a few of those companies and ask them what they would be willing to do to earn your business. Let them know that you are interested in potentially switching suppliers and you would like to have some samples of their products shipped to your office for testing purposes. Manufacturers are often willing to provide free samples so they can prove the quality of their products to you. Distribute samples to your patients and see how they compare to the products from your current supplier.

Additionally, check with those suppliers to see if they have any price breaks with higher quantities, sales promotions or free services they can provide to sweeten the deal. Many suppliers are able to provide services such as private labeling, kitting and free or discounted shipping, as well as product guarantees or discounts for new customers, but you won’t know until you ask. The suppliers that are willing to work hard to earn your business are probably the same ones that will offer extra service and perks to keep you happy in the future. In the end, you might decide to stay with your current supplier, but at least you have done your due diligence and know you are getting the best prices you can.

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Phone: 877-578-6738
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