OBJECTIVES: The cost implications of adopting portable monitoring devices for the diagnosis of obstructive sleep apnea ("OSA") are largely unknown.  We conducted an economic analysis of the HomePAP study, a multi-center randomized clinical trial that compared home-based versus lab-based testing for the management of OSA in accredited sleep centers. METHODS: A total of 373 subjects with a high risk for moderate to severe OSA were randomized to either unattended, home-based limited channel portable monitoring for diagnosis of OSA followed by unattended auto-titration with continuous positive airway pressure ("CPAP"), versus a traditional pathway of in-laboratory sleep study and CPAP titration.  Given that 3 month outcomes were not inferior for the home arm in acceptance, adherence, and functional improvements, we pursued a cost minimization analysis from the payer perspective.  2011 Medicare price weights were used.  Interpretation of home-based CPAP titration is currently not reimbursed by Medicare, so we estimated it as one-third the Medicare reimbursement for interpreting a lab-based sleep study.  RESULTS: Per subject costs, as randomized, were $1265 for the lab-based pathway and $927 for the home-based pathway (base case).  In the per protocol analysis (patients adherent to CPAP for 3 months), per subject costs were even higher for the lab-based pathway ($1,863 vs. $866).  In a sensitivity analysis, even after increasing the Medicare reimbursement for home-based titration studies to 100% that of lab-based studies, per subject costs per protocol were still higher for the lab-based pathway ($1,863 vs. $953). CONCLUSIONS: From the payer perspective, there are higher costs incurred within a lab-based versus a home-based diagnostic pathway without superiority in outcomes. The results suggest that the careful use of home-based sleep studies administered by trained personnel at board-certified sleep centers could save money without compromising short term outcomes.