Leveling Up- Future Proofing Technology for Level II Sleep Studies

In the current healthcare environment, providers are facing the realities of doing more with less due to reimbursement roadblocks, staffing shortages, and inflation, to name just a few challenges.

The sleep world is feeling these pain points acutely, according to Ingvar Hjalmarsson, president of Nox Medical, who notes that the high costs of traditional in-laboratory polysomnography (PSG) are largely rooted in facility, staffing, and administration expenses.

As PSG technology has evolved over the last three decades, its relative ease of use enables remote or at-home PSGs—categorized as level II sleep tests—to acquire the vital physiologic data needed to make reliable diagnoses of obstructive sleep apnea (OSA) and other common sleep disorders.

For sleep staging, these level II studies require a minimum of seven channels—as measured in level I testing, but unattended:

• electroencephalography (EEG)
• electro-oculography (EOG)
• electromyography (EMG)
• heart rate or electrocardiography (ECG)
• airflow
• breathing/respiratory effort
• arterial oxygen saturation (SaO₂)

While facility-based level I studies are the gold standard, level II testing provides a convenient, accessible, more affordable option for diagnosing sleep disorders, delivering on parameters that exceed the four or fewer acquired with level III or level IV home sleep testing (HST) devices.

Technology Set-ups

Device manufacturers say they closely monitor global market conditions, especially reimbursements, as well as developments in wireless technology, artificial intelligence, and cloud computing when making decisions about sleep study equipment design and product marketing.

“Healthcare providers doing PSG are facing immediate demands to replace aging equipment, an impactful decision,” says Hjalmarsson. He notes that some manufacturers may perceive at-home devices as a potential threat in the business. “Home sleep testing is growing,” he says. “As technology becomes even more simple—and cloud and AI capabilities grow more readily available—clinicians will get more insights.

“Future-proofing the investment is something that any sleep lab director should be looking at—given the duration of the investment and the threats looming on the horizon,” continues Hjalmarsson, acknowledging a lot of uncertainties in the reimbursement environment.

Hjalmarsson reports many sleep healthcare providers and sleep labs are opting for the flexibility of having a single device, like the Nox AIs, for performing in-facility level I PSGs and at-home PSGs for level II testing, the latter of which frees them from worries about space or bed limitations. Particularly in international markets, he says remote tests have demonstrated that facilities “don’t need a full, dedicated sleep lab to get an accurate sleep test done.”

“We’ve continuously developed a PSG system, like the Nox AIs, to meet current clinical standards and adapt seamlessly to home settings, ensuring our technology remains aligned with modern practices while delivering patient comfort,” says Snorri Helgason, senior director of market access for Nox Medical. “The scalability of our solution, combined with streamlined setup and scoring for technicians, offers a unique level of flexibility for both patients and providers.”

Nate Craft, Vice President of Sales and Marketing at General Sleep Corporation, notes a growing trend among sleep physicians and sleep labs upgrading to level II equipment for out-of-center studies. General Sleep offers the Zmachine Synergy, a nine-channel level II device featuring single-channel, patient self-applied EEG technology with automated sleep staging.

“Our goal is to provide our customers with high-quality data that rivals PSG but is less complicated and less expensive for patients,” Craft says.

Some sleep diagnostic manufacturers have designed and distributed devices for the ambulatory EEG market that were compliant with PSG level II specifications to satisfy clinical users, but reimbursement shortfalls and associated challenges around sleep study set-up made the investment prohibitive.

They found that patient set-up was too cumbersome and took a lot of time for technologists. Plus, tech-applied leads and sensors were inconvenient for patients who were not be going to bed until hours later. And occasionally, the sensors fell off, rendering tests inconclusive.

Thus, some manufacturers have switched gears to develop mid-scale devices that monitor the eyes, EEG, and chin for a very basic assessment of actual sleep stage, with the goal of finding balance in clinical data acquisition and ease of use. Flexible, middle-ground technology design using algorithmically-derived sleep data from traditional, flow-based respiratory parameters can provide a very well-validated estimation of sleep time.

Balancing Development Amid Uncertainties

Current U.S. reimbursement rates for level II sleep studies vary significantly from payer to payer. Many studies are covered if deemed medically necessary with appropriate documentation of apnea-related symptoms including loud snoring, observed apneas, and excessive daytime sleepiness, with varying degrees of coverage. While administration of at-home level II studies are generally cheaper than in-facility level I studies, reimbursement is unfavorable, according to some experts in the field.

They say reimbursement does not make level II testing worthwhile for most sleep labs.

Level III and level IV HSTs, on the other hand, provide less physiological data and may still necessitate a level I or level II test for definitive diagnosis. While the comprehensiveness of level II studies presents an opportunity to make the process of sleep diagnoses more efficient in these instances, the rate of technical failure due to improper use or equipment malfunction during the unattended study still surpasses those of level I studies. Cost considerations of re-takes and equipment, as well as the burdensome requirements of multi-channel studies, factor into manufacturer decision-making about marketing in-home testing technology vs. traditional PSG set-ups.

In light of these challenges regarding limited reimbursement, many sleep diagnostics manufacturers stay connected with users and prospective users to ensure they’re designing diagnostic tools that make sense from a time-tradeoff perspective and provide the clinical results that sleep specialists need. These are important considerations for manufacturers to keep in mind because even if they were to design the perfect type II device, if users have to invest a significant amount of time and then don’t see a return on investment in reimbursement dollars, adoption of that device is not going to be realistic or sustainable for sleep labs.

Whether a type II study will be financially optimal for the provider and patient hinges on numerous factors including insurance coverage. Some manufacturers have decided to price level II systems on par with other level III and level IV devices, says Craft, so providers aren’t disincentivized from using the advanced devices because of higher costs.

“Some [sleep providers] are choosing cost savings over high-quality data while others insist on using the best equipment possible for their patients,” says Craft. “General Sleep has positioned the Zmachine Synergy to deliver high-quality data while relieving doctors from having  to choose between cost and accuracy.”

Hjalmarsson says it is important that patients have an accurate at-home level II option since in-facility PSG will not be optimal for everyone.

“The at-home PSG is in the ‘sweet spot’ of getting more people tested, in an accurate way, for diagnosis and then treatment,” Hjalmarsson says, noting the importance of sleep quality in the management of chronic conditions. “Properly handled sleep and sleep apnea can help curb healthcare costs by addressing the gap in care of getting more people diagnosed. Level II testing will remain integral in this mission of getting sleep into the center of our healthcare system.”

By: Kerri Reeves

Source: SleepWorld Magazine November/December

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Key sleep parameters measured across sleep testing devices