Helius Medical Technologies, Inc. (NASDAQ:HSDT), a neurotech company, is currently in disagreement with the Centers for Medicare & Medicaid Services (CMS) over reimbursement rates set for its Portable Neuromodulation Stimulator (PoNS) device. CMS has established a payment rate of $2,963.30 for the PoNS Mouthpiece and deferred the reimbursement determination for the PoNS Controller to a future evaluation cycle. This blog examines the impact of this dispute, the company’s response, and future strategies to address the situation.
Overview of Helius Medical Technologies
Helius Medical Technologies develops neuromodulation therapies aimed at improving balance and gait in patients with neurological conditions such as multiple sclerosis (MS). The company’s flagship product, the Portable Neuromodulation Stimulator (PoNS), is a non-invasive therapy designed to enhance mobility. The PoNS device has received regulatory approvals in the United States, Canada, and Australia, with promising results in clinical studies.
CMS Reimbursement Dispute for PoNS Mouthpiece
Helius has expressed concerns over the reimbursement rate of $2,963.30 set by CMS for the PoNS Mouthpiece. The company argues that the pricing does not reflect the significant investment in research and development that led to the FDA designating the device as a breakthrough technology. Helius also highlights that the agreed pricing in negotiations with the Veterans Affairs (VA), the Department of Defense (DoD), and a major insurer exceeds the CMS rate, indicating a disconnect between the market value and CMS’s decision.
CEO’s Statement
Dane Andreeff, President and CEO of Helius, emphasized the need for fair reimbursement to support patient access and the company’s financial health. He expressed optimism that CMS will revise the payment rate after further review, which would also promote revenue growth and improve cash flow for the company.
Impact of Deferral for PoNS Controller Reimbursement
CMS has postponed the reimbursement decision for the PoNS Controller, stating that additional evaluation is necessary. Initial comparisons made by CMS likened the controller to a transcutaneous electrical nerve stimulation (TENS) device, which Helius contests. The company plans to present its case at the public meeting scheduled for November 8, 2024, advocating for an appropriate classification that reflects the controller’s unique value.
Helius’s Plan for Stroke Treatment Authorization
In addition to the current applications for MS, Helius is pursuing FDA approval for the use of PoNS in stroke rehabilitation. Expanding the therapeutic scope of the device to include stroke treatment could unlock new revenue streams and provide further validation of the device’s effectiveness in improving neurological function.
Recent Financial Performance and Strategic Developments
Helius reported a decline in total revenue for the second quarter of 2024, accompanied by an operating loss. Despite these challenges, the company has secured financial stability through a public offering, extending its operational runway into 2025. Helius has also formed partnerships with federal agencies and Lovell Government Services to broaden access to PoNS therapy.
Anticipated Medicare Reimbursement
A significant development for Helius is the scheduled Medicare reimbursement for the PoNS Mouthpiece, which will become effective on October 1, 2024. This reimbursement is expected to drive revenue growth and enhance the financial outlook for the company.
Market Insights from InvestingPro
InvestingPro data indicates that Helius faces several financial hurdles. The company’s market capitalization is valued at $1.62 million, with total revenue for the past year reported at $0.59 million. A revenue decline of 29.7 percent has raised concerns about the company’s financial health, especially as it continues to burn through cash at a rapid pace. However, Helius maintains more cash than debt, providing some flexibility as it navigates the reimbursement challenge with CMS.
InvestingPro highlights that the CMS decision will play a critical role in the company’s future prospects. Securing favorable reimbursement rates is essential to sustaining operations and improving investor confidence, given the company’s recent stock performance challenges.
Conclusion
The dispute with CMS over the reimbursement rate for the PoNS Mouthpiece and the deferral of the PoNS Controller’s reimbursement underscore the complexities Helius faces in aligning regulatory decisions with market realities. As the company prepares for the November 8 public meeting and seeks FDA approval for stroke therapy, it remains focused on advocating for fair pricing that supports patient access and long-term business growth. The outcome of these efforts will be pivotal in determining the company’s trajectory in the healthcare market.
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FAQs
1. What is the PoNS device?
A. The Portable Neuromodulation Stimulator (PoNS) is a non-invasive therapy designed to improve balance and gait in patients with neurological conditions, including MS.
2. Why is Helius disputing the CMS reimbursement rate?
A. Helius argues that the CMS payment rate of $2,963.30 does not reflect the research investment and market value established through negotiations with other agencies.
3. When will the reimbursement decision for the PoNS Controller be finalized?
A. The reimbursement decision for the PoNS Controller has been deferred to the next evaluation cycle, with discussions scheduled for November 8, 2024.
4. What are Helius’s plans for the PoNS device?
A. Helius is seeking FDA approval to expand the PoNS device’s use for stroke rehabilitation and exploring its application for treating traumatic brain injuries.
5. How will the new Medicare reimbursement affect Helius?
A. The upcoming Medicare reimbursement, effective October 1, 2024, is expected to provide a significant boost to Helius’s revenue and improve its financial outlook.
