NEWTOWN, Pa. - Helius Medical Technologies, Inc. (NASDAQ:HSDT), a neurotech company, has announced its disagreement with the Centers for Medicare & Medicaid Services (CMS) over the reimbursement rates set for its PoNS Mouthpiece, HCPCS code A4594. The CMS has set the payment rate at $2,963.30, to be effective from January 1, 2025, while deferring the determination for the PoNS Controller to the next cycle.
Helius, which specializes in neuromodulation therapies for balance and gait deficits, argues that the CMS's pricing and deferral do not align with the substantial investment in research and development that led to the FDA's designation of the PoNS device as a Breakthrough Device. The company plans to present further evidence to CMS to establish what it considers appropriate pricing that reflects the device's value to stakeholders, including patients with multiple sclerosis (MS).
President and CEO of Helius, Dane Andreeff, expressed hope for a revised fair reimbursement for the PoNS Mouthpiece and Controller, which could potentially enhance patient access and support the company's revenue growth and cash flow generation. Helius also aims to pursue U.S. authorization for the device's use in stroke treatment.
CMS has recognized the PoNS Mouthpiece as an essential accessory, payable in a lump sum, but Helius contests the use of prior temporary introductory pricing as a basis for the payment rate, advocating for a rate that mirrors the market pricing established through negotiations with the Veterans Affairs (VA), the Department of Defense (DoD), and a major insurance carrier.
The PoNS Controller's reimbursement has been deferred, with CMS requiring more time for evaluation. CMS preliminarily compared the Controller to a transcutaneous electrical nerve stimulation (TENS) device, which Helius plans to challenge at the upcoming public meeting on November 8, 2024.
Helius Medical Technologies is recognized for its Portable Neuromodulation Stimulator (PoNS), an innovative, non-implantable therapy used to improve balance and gait in patients with neurological conditions. The device is currently authorized for sale in the United States, Canada, and Australia for various indications.
This article is based on a press release statement from Helius Medical Technologies.
In other recent news, Helius Medical Technologies has drawn attention with its preliminary results from the ongoing PoNSTEP study. The study, evaluating the Portable Neuromodulation Stimulator (PoNS) Therapy for gait deficits in multiple sclerosis (MS) patients, has shown a significant mean improvement in Dynamic Gait Index (DGI) scores. A notable correlation has emerged between therapy adherence and DGI score improvements, particularly in the study's home-based second phase.
Helius also reported its Q2 2024 financial results, revealing a decrease in total revenue from the previous year and an operating loss. The company has, however, extended its financial stability into 2025 due to a successful public offering. They are also preparing for FDA submission for stroke authorization and investigating the expansion of PoNS therapy for traumatic brain injury patients.
Despite financial challenges, Helius Medical Technologies has made strategic moves, such as expanding PoNS therapy accessibility and forming partnerships with federal agencies, including Lovell Government Services. An anticipated Medicare reimbursement, effective from October 1, 2024, is expected to provide a significant boost in revenue. These recent developments suggest that Helius Medical Technologies is laying the groundwork for potential growth in the healthcare market.
InvestingPro Insights
Helius Medical Technologies' (NASDAQ:HSDT) disagreement with CMS over reimbursement rates comes at a challenging time for the company, as revealed by recent financial data from InvestingPro. The company's market capitalization stands at a modest $1.62 million, reflecting investor caution about its prospects.
InvestingPro data shows that Helius is facing significant financial headwinds. The company's revenue for the last twelve months as of Q2 2024 was just $0.59 million, with a concerning revenue decline of 29.7% over the same period. This decline aligns with an InvestingPro Tip indicating that the company is "quickly burning through cash," which could explain its strong stance on seeking higher reimbursement rates for its PoNS device.
Another InvestingPro Tip notes that Helius "holds more cash than debt on its balance sheet," which may provide some financial flexibility as it navigates the reimbursement challenges with CMS. However, this positive aspect is tempered by the fact that the company is "not profitable over the last twelve months," according to another tip.
The stock's performance has been particularly troubling, with InvestingPro data showing a one-year price total return of -93.73% as of the latest available data. This dramatic decline underscores the importance of the CMS reimbursement decision for Helius's future prospects.
Investors considering Helius Medical Technologies should note that InvestingPro offers 15 additional tips for this stock, providing a more comprehensive analysis of the company's financial health and market position. These insights could be crucial for understanding the full impact of the CMS reimbursement decision on Helius's future.
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