Devices & Diagnostics

Overcoming reimbursement hurdles key to novel device’s success. Just ask Uroplasty

Reimbursement strategies are key to the success of any new technology. In fact, many believe that a U.S. Food and Drug Administration approval is crucial to launch a product, but its market success hinges on adequate reimbursement. And that has been the experience of Minnetonka, Minnesota-based Uroplasty (NASDAQCM:UPI). In 2004, it licensed the only percutaneous […]

Reimbursement strategies are key to the success of any new technology.

In fact, many believe that a U.S. Food and Drug Administration approval is crucial to launch a product, but its market success hinges on adequate reimbursement.

And that has been the experience of Minnetonka, Minnesota-based Uroplasty (NASDAQCM:UPI). In 2004, it licensed the only percutaneous tibial nerve stimulation device to treat overactive bladder. But acquiring the new technology — the Urgent PC Neuromodulation System — didn’t guarantee financial returns.

In fact, since 2008, Uroplasty has had to jump through hoops and “hammer away at brick walls” to get the proper reimbursement code and get insurers, both private and the local groups that administer Medicare locally, to cover the procedure.  But the results have been worth it. In fiscal 2012, which ended March 31, Urgent PC sales of $7.8 million represented a whopping 84 percent over sales from the previous 12-month period. The issuance of a unique reimbursement code had done wonders.

Back in 2005, the Urgent PC system launched and was being reimbursed under a specific code that covers temporary implantation of a neurostimulation electrode. However, three years later, the American Urology Association determined that this code wasn’t appropriate and recommended the company ask the American Medical Association, which grants CPT (Current Procedural Terminology) codes, to provide an unlisted code. That code covers any new technology but doesn’t specify what it is — it is, in effect, a miscellaneous code, explained Nancy Kolb, Uroplasty’s vice president of Global Marketing, in an email.

“Because it does not describe any specific technology, it does not have any specific payment associated with it,” Kolb said. “The provider then has to negotiate payment amount with payer and usually has to file a paper claim with extensive documentation to educate the payer about the procedure. It is tedious and time consuming, and did impact on the uptake of UPC among healthcare providers.”

Meanwhile, the American Urology Association requested that Uroplasty’s desire to get a better reimbursement code would be bolstered if it conducted a randomized, blind, sham study to demonstrate the product’s clinical efficacy.

“A sham controlled study is almost unheard of in the medical device world, although common in the pharma world,” Kolb said.

But that is exactly what Uroplasty undertook. It designed a 23-center, 220-patient double-blind study. In 14 months, the study was designed, approved by institutional review boards, patients enrolled and treated, data gathered, analyzed and results accepted for publication. It was a “a mammoth undertaking,” Kolb recalled.

But the company also continued working to impress doctors so that they would incorporate the Urgent PC system into their practices.

“[This] was important also as part of the CPT Category I code application, she said. “The AMA CPT panel wants to ensure that a therapy is being performed outside of investigational settings and has a high enough utilization rate to be eligible for a CPT code.”

Finally, in early 2010, the company heard the news that the AMA had agreed to grant the Urgent PC procedure a unique CPT Category I code. It became effective in January 2011.

And today, 11 of 13 Medicare carriers cover Urgent PC, which represents 35 states and roughly 36 million of 48 million Medicare beneficiaries. Private payers also cover the procedure and some of them are Aetna, UnitedHealthcare, Kaiser Permanente.

“When I present Uroplasty’s reimbursement story to other companies, they look at me in awe,” Kolb declared.

Uroplasty’s reimbursement strategy appears to be working, but the company, incorporated in 1992 in Minnesota, still has a ways to go in terms of profitability. Uroplasty, which also sells a tissue bulking agent, had a net loss of $639,526, or 3 cents per diluted share, in the quarter ended Sept. 30, compared with a loss of $1.28 million, or 6 cents per diluted share, in the same period the year before.

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