A medical technology company with core expertise in neuromodulation – Cyberonics Inc. (CYBX) – continues to run into trouble on the reimbursement front. The company recently announced that the Departmental Appeals Board (DAB) of the Department of Health and Human Services has declined its appeal on a medical reimbursement decision, taken by the Centers for Medicare & Medicaid Services (CMS) as part of the 2007 National Coverage Determination on the VNS Therapy System.
This CMS decision in 2007 stated that coverage for the treatment-resistant depression indication is not reasonable and necessary. However, the decision allowed coverage of maintenance services – including replacement of the implanted VNS Therapy device on battery expiration for beneficiaries (who began receiving VNS Therapy prior to May 4, 2007) by CMS and its contractors. We believe DAB’s move to uphold CMS’ decision will once again significantly limit access to this therapeutic option for most patients.
Notably, following this determination back in 2007, Cyberonics was not engaged in active commercial efforts with respect to treatment-resistant depression (TRD) in any of its markets. Thereafter, supported by new clinical evidence, including the completion of a post-approval dosing study and more than five publications in peer-reviewed journals, the company had submitted a formal request to CMS for reconsideration of VNS therapy for TRD for a Medicare beneficiary sub-population that is estimated to represent approximately 0.2% of CMS’ patient population. CMS declined the request for reconsideration in May 2013.
Highly disappointed with the latest verdict from DAB, Cyberonics is currently evaluating options to challenge the decision. The company is expected to support patient and psychiatrist appeals to the national non-coverage determination to pursue access to the VNS Therapy System for patients experiencing TRD.
Zacks Rank
Currently, Cyberonics carries a Zacks Rank #3 (Hold). Investors interested in the medical instruments industry can consider better-ranked stocks like ABIOMED, Inc. (ABMD), AngioDynamics Inc. (ANGO) and Edwards Lifesciences Corp. (EW). All the three stocks hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment