US Govt body grants unique payment code for ODM

RNS Number : 9643B

Deltex Medical Group PLC

10 April 2013

 

Deltex Medical Group plc

("Deltex Medical" or "the Company")

Physician reimbursement in USA - unique ODM payment code issued, standard payment level set

10 April 2013 - Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler monitoring ("ODM"), which measures blood flow in real time enabling fluid level optimisation to enhance recovery after surgery and in intensive care, today announces that the US Centres for Medicare and Medicaid Services ("CMS") has granted ODM its own unique code for physician reimbursement. In addition CMS has set a standard amount of $101 that it will reimburse US doctors for each use of an ODM probe in either surgery for patients requiring intra-operative fluid optimisation or for ventilated patients in intensive care.

This specific procedure code, standard national average payment level combined with the previously granted national coverage mean that any US doctor using ODM on a CMS patient will be reimbursed within weeks under an automated payment system. Previously it has taken two to three years before a physician starts to be paid consistently.

The US is anticipated to be a significant future market for Deltex Medical and developments such as this which make existing pathways for physician reimbursement for use of ODM both more certain and simpler are crucial to this success. Where established locally at adequate levels of $80 per patient or higher, physician reimbursement has been associated with achieving the Company's best levels of growth in the US.

This builds on the announcement on 8 January 2013 of the second phase of a major collaborative research project with Premier Inc ("Premier"), also aimed at accelerating significantly the creation of a mass market for the Company's products in the US. Data from the pilot stage of the project undertaken with Premier and Duke University Hospital showed substantial reductions in hospital costs. The provision of positive data from the collaboration combined with a reimbursement code creates a significant potential market opportunity for the Company.

Deltex Medical's goal is to make ODM a standard of care in both major surgery and in critical care. Achieving this will create a major international business that generates substantial amounts of cash and profits sustainable over many years. In 2012 Deltex Medical made substantial progress towards achieving this goal. The Company's products are gaining traction and were being used in some 20% or more surgical patients by the end of the year than at the start in countries including the UK, US, France, Scandinavia and Canada.

Ewan Phillips, Deltex Medical's Chief Executive, commented:

"This is a very significant development for Deltex Medical. The USA is by far the world's largest potential market for our products. The establishment of routine and meaningful payment of physicians for using ODM secures a cornerstone of our strategy to create widespread demand for our products in the USA. In the short term we also expect to see increased demand for evaluating our products."

For further information, please contact:-

Deltex Medical Group plc	01243 774 837 [e-mail]
Nigel Keen, Chairman
Ewan Phillips, Chief Executive
Paul Mitchell, Finance Director
Nominated Adviser & Broker
Arden Partners plc	020 7614 5900
Chris Hardie
Financial Public Relations
Newgate Threadneedle	020 7653 9850
Graham Herring
Caroline Evans-Jones
Heather Armstrong

Notes for Editors

Deltex Medical manufactures and markets CardioQ-ODMÔ Oesophageal Doppler Monitoring ('ODM') systems. ODM is the only therapy to measure blood flow in the central circulation in real time. Minimally invasive, easy to set up and quick to focus, the technology generates a low-frequency ultrasound signal, which is highly sensitive to changes in flow and measures them immediately. Randomised, controlled trials using Doppler have demonstrated that early fluid management intervention will reduce post-operative complications, reduce intensive care admissions, and reduce the length of hospital stay.

The CardioQ-ODM has two distinct established clinical applications: firstly, to guide fluid management during surgery and secondly, to monitor cardiac output in critical care settings.

Surgical market

In March 2011 the National Institute for Health & Clinical Excellence ('NICE') recommended that CardioQ-ODM be considered for use in patients undergoing major and high risk surgery and in high risk patients undergoing intermediate risk surgery. NICE estimated the applicable number of such patients in the NHS in England alone to be over 800,000 each year. CardioQ-ODM has been shown to be effective in both elective and emergency surgery and with both general and regional anaesthetics. This recommendation was specific to CardioQ-ODM and was based on the robust evidence base that supports its use.

Subsequent to the NICE guidance, the NHS in England announced its selection of ODM as a high impact innovation to be rolled out across the system fully, at pace and scale with significant financial penalties starting in the NHS 2013/14 financial year ending 31 March 2014.

The NICE evaluation and recommendation confirms that the potential global market for CardioQ-ODM in surgery includes tens of millions of patients, even if confined to developed health economies: the most conservative estimate of the potential value of the market opportunity Deltex Medical has created is in excess of £1 billion per annum. The Company's core focus is on building market leading positions in this surgical market, both geographically and by type of surgery.

Critical care market

In critical care settings, well-equipped hospitals will often have more than one cardiac output monitoring technology available. In this environment, ODM's strengths are that it is quick to set up, easy to use, safe, low cost and the ideal technology for a patient in crisis requiring rapid or frequent intervention. The potential market for cardiac output monitoring in critical care is a fraction of the size of that for intra-operative fluid management.

Through the 2012 launch of the CardioQ-ODM+, Deltex Medical has added the Pulse Pressure Waveform Analysis ('PPWA') approach to monitoring cardiac output to ODM functionality. Doing this has improved Deltex Medical's offer for monitoring applications as well as providing doctors and nurses with a choice of clinical strategies appropriate to individual patients in different clinical settings.

Company goal

Our goal is to make oesophageal Doppler monitoring (ODM) a standard of care for patients in both these markets. We believe that, in most modern health systems, it is essential to have a robust evidence base of both clinical benefit and cost effectiveness in order to achieve system-wide adoption of a new medical technology. Deltex Medical is one of the very first medical technology companies to have completed the investment necessary to build such an evidence base: as a result, use of ODM during surgery has the proven potential to deliver both clinical and economic benefits that are material at each of patient, hospital and system level.

The Company is currently in the implementation phase of achieving this goal in a number of territories worldwide and there are already over 2,800 CardioQ-ODM systems in use in hospitals worldwide. Distribution arrangements are in place in over 30 countries.

 

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