MiMedx Announces Its Support Of New CMS Packaging Payment Policy For Skin
EPIFIX® CURRENT REIMBURSEMENT STATUS EXTENDED THROUGH 2014
MARIETTA, Ga., Nov. 29, 2013
MARIETTA, Ga., Nov. 29, 2013 /PRNewswire/ --MiMedx Group, Inc. (NASDAQ:
MDXG), an integrated developer, manufacturer and marketer of patent protected
regenerative biomaterials and bioimplants processed from human amniotic
membrane, announced today that the Company applauds the Centers for Medicare
and Medicaid Services' (CMS) new methodology for the reimbursement of skin
substitutes in the hospital outpatient setting, which was released on November
27, 2013. Under the new Hospital Outpatient Prospective Payment System (OPPS)
Final Rule, CMS will package the reimbursement for certain products used in
advanced wound care with the related surgical procedure into a two-tier
payment system. Additionally, the MiMedx allograft, EpiFix®, was extended
pass-through status through 2014, which means it will retain the current
payment methodology for one more year. CMS states that pass-through payments
are intended to facilitate the adoption of certain new products for a period
of at least two, but not more than three years. EpiFix® will retain this
status for 2014, which will be the third and final year.
"We think that CMS has made very rational decisions that balance all the
variables to protect their Medicare patients, manufacturers and our tax
dollars. These changes were absolutely necessary to correct cost disparities
and graft wastage in advanced wound care," said Parker H. Petit, Chairman and
CEO."MiMedx has been an advocate of these changes and has lobbied Congress to
support CMS in this initiative. We have spent considerable time with
congressional members explaining to them the excessive wastage that has
transpired in this area of healthcare. We believe this new two-tier
reimbursement policy will reduce excessive spending and broaden patient access
to advanced wound care, which will benefit Medicare recipients. We applaud CMS
for making this policy change."
A vast number of patients in the U.S. suffer from chronic wounds. Two of the
largest categories of chronic wounds are diabetic foot ulcers (DFUs) and
venous leg ulcers (VLUs). Approximately 1 million patients per year in the
U.S. are reported to be suffering from DFUs and just under 900,000 U.S.
patients each year are reported to suffer from VLUs. A recently published
paper indicates that the median size of a DFU is approximately 1.35 square
centimeters (sq. cm) and the median size of a venous leg ulcer is
approximately 2.32 sq. cm. This published paper also indicates that 77% of
DFUs and 66% of VLUs are 5 sq. cm. or less.
"The MiMedx EpiFix® allograft is extremely cost effective because it comes in
sizes ranging from 1.5 square centimeters (sq. cm.) on up," stated Petit. "Our
two major competitors have considerable waste factors associated with the use
of their grafts. Each of these products is offered in only one size,
approximately 40 sq. cm. each. It is quite evident that these products are
significantly larger than these median wound sizes; in fact, they are 15 to 20
times larger. Consequently, the remainder of the graft is discarded or wasted
since it is a single use product only."
"CMS has also extended the pass-through status of EpiFix®, which means that
the method of reimbursement will remain unchanged through 2014, as it will
continue to be reimbursed under the Average Sales Price (ASP) methodology,
which is ASP + 6%. Therefore EpiFix® will continue to receive reimbursement
in 2014 on a per square centimeter basis. In 2015, in the Hospital Outpatient
and Ambulatory Surgical Center, the Company expects EpiFix® will be reimbursed
as a part of a packaged rate in the higher tier of the two-tier system," added
"The publications presenting the clinical results of our competitors' two
products and EpiFix® show that the clinical healing rates for wounds treated
with EpiFix® are 40 to 60 percent higher than the healing rates of our
competitors' products. Our strong clinical results and cost effective
approach have enabled MiMedx to quickly gain market share. We believe the new
reimbursement changes will enable us to continue that progress," added Bill
Taylor, President and COO.
In the new system, CMS is dividing the skin substitutes into two groups for
packaging purposes: high cost skin substitutes and low cost skin substitutes.
Skin substitutes with an ASP amount above the weighted average of $32 per sq.
cm. are classified in the high cost group and those at or below the weighted
average per sq. cm. are classified in the low cost group. The 2014 packaged
rate for the low cost skin substitutes applied to DFUs and VLUs smaller than
100 sq. cm. is $409.41, and for the high cost skin substitutes is $1371.19.
As noted above, EpiFix® continues pass-through status for 2014, and it will be
reimbursed on an ASP + 6% method. It is worth noting that if EpiFix® were
bundled in 2014, it would fall into the high cost packaged rate.
Taylor continued, "The size-appropriateness of our grafts, higher healing
rates and fewer required applications to achieve wound closure have already
enabled us to gain market share quickly. The DFU market for products such as
EpiFix® is in excess of $2 billion annually. Knowing that the VLU prevalence
rate is nearly as high as the DFU rate, only with slightly larger wounds, we
estimate the combined total DFU and VLU market for our EpiFix® products to be
in excess of $4 billion annually. To achieve our revenue guidance for 2014,
we only need to capture 2.5% of that total possible DFU and VLU market, and
that is excluding revenue from our other product lines."
MiMedx® is an integrated developer, manufacturer and marketer of patent
protected regenerative biomaterial products and bioimplants processed from
human amniotic membrane. "Innovations in Regenerative Biomaterials" is the
framework behind our mission to give physicians products and tissues to help
the body heal itself. Our biomaterial platform technologies include AmnioFix®
and EpiFix®, our tissue technologies processed from human amniotic membrane
that is derived from donated placentas. Through our donor program, mothers
delivering full-term Caesarean section births can elect in advance of delivery
to donate the placenta in lieu of having it discarded as medical waste. We
process the human amniotic membrane utilizing our proprietary PURION® process,
to produce a safe and effective implant. MiMedx® is the leading supplier of
amniotic tissue, having supplied over 200,000 allografts to date to
distributors and OEMs for application in the Wound Care, Surgical, Sports
Medicine, Ophthalmic and Dental sectors of healthcare.
Safe Harbor Statement
This press release includes statements that look forward in time or that
express management's beliefs, expectations or hopes. Such statements are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements include, but are not limited
to the clinical and cost effectiveness of EpiFix® and the resultant impact on
the Company's market share, the effect of the new reimbursement system on
putting the Company in a favorable position relative to its competitors and
accelerating the growth in the Company's market share. These statements are
based on current information and belief, and are not guarantees of future
performance. Among the risks and uncertainties that could cause actual
results to differ materially from those indicated by such forward-looking
statements include the potential that EpiFix® will not perform as expected or
will not gain acceptance in the medical community, that the new reimbursement
will not put the Company in a favorable position relative to its competitors
or accelerate the increase in the Company's market share, that the Company's
market share does not increase as anticipated, and the risk factors detailed
from time to time in the Company's periodic Securities and Exchange Commission
filings, including, without limitation, its 10-K filing for the fiscal year
ended December 31, 2012, and the Company's Forms 10-Q filed in 2013. By making
these forward-looking statements, the Company do not undertake to update them
in any manner except as may be required by the Company's disclosure
obligations in filings it makes with the Securities and Exchange Commission
under the federal securities laws.
SOURCE MiMedx Group, Inc.
Contact: Michael Senken, (770) 651-9100
Press spacebar to pause and continue. Press esc to stop.