MiMedx Group, Inc. (NASDAQ: MDXG) 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
"We think that CMS has made very rational decisions that balance all the variables to protect their
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 Petit.
"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
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
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