CMS last considered home diagnosis in 2004, but still
required testing in a lab to confirm the diagnosis. Now this issue came back.
The decision about home testing is expected by September 14, 2007.

According to analysts from the Wachovia Capital Markets, LLC
(WCM is a Member of the New York Stock Exchange and the opinions of their
analysts are highly respected), the acceptance of home sleep testing by
Medicare is very likely (60%) based on the possible cost saving and the recent
published clinical data supporting home testing.

The acceptance of home sleep studies will dramatically
affect the sleep industry. Sleep market will grow in two opposite directions.

On one hand, home sleep studies will mushroom. Since the
home sleep studies will not allow pressure titration, home-diagnosed patients
would need automatic units (Auto-CPAP devices (APAP). APAP devices are more
expensive which will make companies producing APAPs greatly benefit from this
policy. From their prospective a sleep market is robust and business future is
bright.

On the other hand, sleep laboratories will stop to grow and
eventually might be curtained.

The Sleep Medicine Societies, Academy (AASM) and Sleep
Networks are expected to oppose home testing given their financial interest in
maintaining the status quo.

How strong will be this opposition is unclear, but so far
there were no indications that it will be strong enough to override the
economic advantages of the home testing.

Significant decrease of sleep laboratories and their income
might dramatically decrease their interest and the necessity to get accredited,
which will make the Academy of Sleep Medicine and other sleep societies
financially weaker. The control for the quality of increased home studies might
be later questionable.

On the other hand, if the AASM and Sleep Networks will unite
as a force and negotiate with Medicare that accredited sleep labs will have
advantages in reimbursement, it will make their position stronger to save sleep
medicine as a financially strong field.

The other domino effect is related to the fact that Medicare
is benchmark for private insurers. Most private insurances follow Medicare’s
leads. If and when Medicare allows home diagnosis, it is expected for most
private insurances to move quickly to do the same: away from laboratory’s full
polysomnography due to cost savings.

On the positive note, Sleep Medicine made its way to the
main stream of medicine and, if done correctly, home testing might open other
potential sleep markets, such as pediatric sleep disorders, sleep cardiology,
sleep psychiatry, forensic sleep medicine, parasomnias, dental sleep medicine
and others.

Interesting time is about to come. Good Luck!