8-K: Helius Medical Technologies Announces Preliminary Medicare Payment Rates for PoNS Device

Helius Medical Technologies has announced preliminary Medicare payment rates for its PoNS device, with a public meeting scheduled to discuss the rates.

Summary

• Helius Medical Technologies has received preliminary Medicare payment determinations for its PoNS device from the Centers for Medicare & Medicaid Services (CMS).
• The proposed rates will be discussed at a public meeting on May 29, 2024.
• The PoNS Controller is preliminarily priced at $1,206.53, based on an existing code for neuromuscular stimulators.
• The PoNS Mouthpiece is preliminarily priced at $3,075.53, based on the cash pay price of $4,500.
• The company intends to argue for higher reimbursement rates at the public meeting.
• Finalized payment rates are expected to be effective October 1, 2024.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook due to the preliminary reimbursement rates, but acknowledges the risks and uncertainties involved in the process. The company is actively working to improve the rates.

Positives

• The preliminary payment determinations are considered a significant win for Helius.
• Medicare price determination is expected to expand reimbursement across third-party payers.
• The company believes this will provide a pathway to positive cash flow.
• The company is continuing to pursue authorization for stroke in the U.S.

Negatives

• The proposed rates are preliminary and may not be finalized at the current amounts, or at all.
• There is no guarantee that the proposed rates will be adopted.

Risks

• The company faces uncertainties associated with capital requirements, funding availability, and manufacturing.
• There are risks related to labor shortages and supply chain issues.
• The company's ability to obtain national Medicare insurance coverage and a reimbursement code is not guaranteed.
• There are risks associated with building internal commercial infrastructure and securing state distribution licenses.
• Market awareness of the PoNS device and the clinical development process are also risks.
• The FDA regulatory submission review and approval process is also a risk.

Future Outlook

The company anticipates that the Medicare price determination will allow them to expand reimbursement across third-party payers and provide a pathway to positive cash flow as they continue pursuing authorization for stroke in the U.S.

Management Comments

• CMS's preliminary determination of reimbursement for both the PoNS Controller and Mouthpiece is a significant win for Helius, stated Helius President and Chief Executive Officer, Dane Andreeff.
• We intend to present at the HCPCS Public Meeting on May 29, 2024 and expand on how PoNS differs, mechanistically and therapeutically, from any neuromuscular peripheral stimulation therapy.
• We will present arguments to support a higher reimbursement rate for the PoNS Controller using the gap filling methodology, along with advocating for reimbursing the PoNS Mouthpiece through the lump sum payment structure at a higher rate than the one established in the preliminary determination.

Industry Context

This announcement is significant for the neurotech industry as it indicates progress in securing reimbursement for innovative medical devices. It also highlights the importance of engaging with regulatory bodies like CMS to establish favorable payment rates.

Comparison to Industry Standards

• The PoNS Controller's preliminary reimbursement is mapped to an existing code for neuromuscular stimulators (E0745), which is a common approach for new devices.
• The PoNS Mouthpiece's reimbursement is based on a percentage of its cash pay price, which is a less common approach and may be subject to further negotiation.
• Companies like NeuroMetrix, which also develops neuromodulation devices, have faced similar challenges in securing reimbursement, highlighting the industry-wide importance of this process.
• The company's strategy to argue for higher reimbursement rates is a common practice in the medical device industry, where companies often seek to justify the value of their technology.

Stakeholder Impact

• Shareholders may view the preliminary reimbursement rates positively, but will be aware of the risks.
• Patients may benefit from increased access to the PoNS device if reimbursement is finalized.
• Third-party payers will be impacted by the finalized reimbursement rates.
• The company's employees will be impacted by the company's ability to achieve positive cash flow.

Next Steps

• Helius will present at the HCPCS Public Meeting on May 29, 2024.
• The company will advocate for higher reimbursement rates for both the PoNS Controller and Mouthpiece.
• The finalized payment rates are expected to be effective October 1, 2024.

Key Dates

Keywords

PoNS, Medicare, reimbursement, neuromodulation, CMS, HCPCS, payment rates, medical device, healthcare