Is Your CPAP Program Profitable? A Simple ROI Framework

"Our CPAP program is doing great."

Really? How do you know?

Many DME owners can't answer that question with numbers. They feel busy, see revenue, assume profit. But hidden costs eat margins, and without tracking them, you're flying blind.

The True Cost of a CPAP Patient

Most calculations miss half the picture. Here's what to include:

Direct Costs

Equipment (per patient):

• CPAP machine: Your cost ~$400-600
• Mask and headgear: ~$80-150
• Tubing, filters, humidifier supplies: ~$50

Total equipment investment: $530-800 per patient

Indirect Costs

Staff time (first 90 days):

• Setup appointment: 1 hour × $25/hour = $25
• Coaching calls (6-8 calls): 2 hours × $25 = $50
• Documentation and data review: 1.5 hours × $25 = $37.50
• Insurance coordination: 0.5 hours × $30 = $15

Total staff time: ~$127.50 per patient

Overhead allocation:

• Facility (proportional): ~$50 per patient
• Software and technology: ~$20 per patient
• Administrative: ~$30 per patient

Total overhead: ~$100 per patient

Real First-Year Cost Per Patient

Revenue Per Patient (First Year)

Now the income side:

Equipment sale/rental:

• Medicare reimburses ~$800-1,000 for CPAP + supplies (13-month rental)
• Private insurance: varies widely

Resupply revenue:

• Average resupply order: $150-200
• Orders per year (compliant patient): 3-4
• Annual resupply revenue: $450-800

RPM billing (if capturing):

• 99457: ~$50/month × 12 = $600
• 99458: ~$40/month × 8 = $320 (assuming some months get additional 20 min)
• Annual RPM revenue: ~$920

Real First-Year Revenue Per Patient

The Profitability Picture

Without RPM billing:

• Revenue: $1,400
• Cost: $900 (midpoint)
• Profit per patient: $500
• Margin: 36%

With RPM billing:

• Revenue: $2,320
• Cost: $900 + $150 (RPM documentation time) = $1,050
• Profit per patient: $1,270
• Margin: 55%

RPM billing nearly triples your per-patient profit.

What Kills CPAP Program Profitability

1. Non-Compliance

Patients who fail Medicare compliance don't generate resupply revenue. You've invested $700+ and might recover only $400.

Impact: Every 10% drop in compliance rate reduces profit by ~$120 per patient.

2. Equipment Returns

Patients who quit in the first month trigger returns. You eat shipping, restocking, and lost time.

Impact: A 15% return rate can eliminate program profitability entirely.

3. Resupply Leakage

Patients ordering supplies elsewhere, or not replacing at all.

Impact: Losing half your resupply business cuts profit by $250+ per patient.

4. RPM Billing Gaps

Staff doing the work but not documenting time properly.

Impact: Missing even 25% of billable RPM time leaves $230+ per patient on the table.

Your ROI Calculation Worksheet

Calculate your actual numbers:

Revenue (annual per patient):

• Equipment reimbursement: $______
• Resupply (actual orders): $______
• RPM billing (actual billed): $______
• Total revenue: $______

Costs (annual per patient):

• Equipment cost: $______
• Staff time (hours × rate): $______
• Software/technology: $______
• Overhead allocation: $______
• Total costs: $______

Profit = Revenue - Costs: $______

Margin = Profit / Revenue × 100: ______%

Improvement Levers

Ranked by impact:

1. Start RPM billing (if not already): +$800-1,000/patient
2. Improve compliance rates: +$100-200/patient per 10% improvement
3. Capture resupply business: +$200-400/patient
4. Reduce equipment costs (negotiate with distributors): +$50-100/patient
5. Streamline operations (reduce staff time per patient): +$25-75/patient

Drift shows your program's real-time profitability. Revenue tracking, compliance monitoring, and RPM billing in one dashboard. [Calculate your ROI →](/support)