3296 Stones Throw Ave. Youngstown, OH 44514

Delta Sleep Center Management Services, LTD.

Sleep Diagnostic Business Models

The following are different examples of sleep lab/center* business models.  Delta Sleep Center Management Services, LTD (DSCMS), established in August 2005, currently uses Alice 6 and Philips titrating equipment in all facilities. We currently do not offer PAP and all PAP orders are generated by the attending/ordering physician. We do make an attempt to work with a preferred HME company in a specific area.

We will operate the facility as an “Open”* or “Closed”* facility based on the Hospitals preference. If an attending doctor prefers, he/she can refer/consult the sleep physician in that geographic area to manage the patient from diagnosis, treatment and follow up. We also have several Board Certified Sleep physicians on staff that can be utilized when and where needed. All models can be modified, within the scope of the laws/rules, according to the specific needs in any geographic area.

We currently have 3 hospital Sub-Contracts, AKA “Under Arrangements”, which total 16 beds. And a 2 bed Lab which is under an In-Office Ancillary Arrangement, for a total of 18 beds. All of our beds are in Ohio but we are willing and able to go anywhere in the US that makes business sense.

Model #1: Hospital Sub-Contract/Under Arrangement – In this model, Delta Sleep Center Management Services, LTD (DSCMS) would manage the order intake process and clinical responsibilities. The hospital is responsible for billing and collection for the services.

Other details regarding, marketing, who owns the diagnostic, titration equipment and employees is determined based on how the management fee is structured.

DSCMS  offers home sleep testing as a part of the contract agreement if requested.

Model #2: An Independent Testing Facility (IDTF). This model is typically a standalone facility and can be wholly owned by DSCMS or can be a partnership. The partners can include somebody with a clinical and/or business background. It can also include a physician or physicians. If there is physician ownership, the Stark laws**apply and the physician(s) can only own up to 40% and only account for 40% of the referrals to that facility in any rolling 12 month period. The lab/center must be accredited thereby following all accreditation standards that apply.

Model #3: In-Office Ancillary Exception. This model is governed by the Stark laws, the Federal regulation that dictates self referrals. This arrangement is typically best suited for a group of physicians that is large enough to keep at least a 2 bed facility busy for 3/4 nights per week but that can vary.

In an In-Office Ancillary Exception, the physician group would own the lab/center and it must be physically in their practice (“in their shoes”). They would bill for the technical and professional component. Under the Stark regulation, they can only diagnose and treat their patients. In other words, that practice would not be allowed to diagnose and/or treat any patients that are not  patients of their practice. DSCMS would manage the clinical aspects of the diagnostic test and titration.  The practice would pay a management fee to DSCMS.

Model #4: Portable or Home Sleep Test (HST). DSCMS has the capability to add HST’s to all of the models above or can be offered as a standalone option. DSCMS is currently using the Philips PDX unit and soon to upgrade to NightOne.




We consider a “Lab” as a facility that diagnosis’s and treats mainly adult and adolescent OSA patients and a “Center” as a facility that treats all adult and adolescent sleep disorders, i.e. OSA, Insomnia, Narcolepsy etc.

*Closed vs. Open facility. A “Closed” facility means, all patients are referred to and assessed by the Sleep Lab/Center’s Medical Director prior to having the diagnostic test ordered. An “Open” facility simply means, any qualified and credentialed physician in that geographic area can refer to the lab/center without seeing the lab/center’s Medical Director prior to a diagnostic or titration study being ordered.

**Stark laws-The Stark Laws are a set of federal laws, although each state has enacted similar statutes, that generally prohibit physician self referrals. Specifically, referrals from a physician of a Medicare or Medicaid patient, to an entity providing designated health services, if the physician, or physician’s family members, have a financial interest in that entity. There are numerous exceptions to the laws.

Pediatric services are dependent upon a credentialed physician or physician’s in a specific area trained and qualified to diagnose and treat Pediatric patients.

Please contact, Joe Petrolla, Member at 330-472-6152 with any questions and/or leads.