THRM:CC - Therma Bright's Investment Case Just Got Stronger As Approval On Permanent Insurance Codes Gets Closer
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Therma Bright(TSXV:THRM) (OTCQB:TBRIF) , a developer of a wide range of leadingedge, proprietary diagnostic and medical device technologies thataddress some of today's most important medical and healthcarechallenges, appears to be positioned for major growth based on oneimportant upcoming catalyst.
For some background, Therma Bright (TSXV:THRM)(OTCQB:TBRIF) sells Venowave, a compact, battery operatedperistaltic pump that generates a wave-form motion. When worn belowthe knee and strapped to the calf, the resulting compression of thecalf causes an increased upward volumetric displacement of venous andlymph fluid. The Venowave is FDA approved for 10 indications,including: Management of Post Thrombotic Syndrome, Prevention of DeepVein Thrombosis (DVT / blood clots), treatment of Chronic VenousInsufficiency, as well as other conditions related to poor circulationin the extremities.It seems that the company is set to receive a newlyissued, HCPCS Level II code to identify it’s Venowave device,whichwill be instrumental in driving revenue growth. HCPCS codes are a setof health care procedure codes used in the United States tostandardize the reporting of medical procedures, services and devices.These codes are essential for billing and reimbursement purposeswithin the Medicare and Medicaid programs, and are also used by otherhealthcare insurers in the United States, including private insurancecompanies.
Additionally, a preliminary Medicare Payment determination willbe made for this new HCPCS code. If the Venowave is purchasedoutright, Medicare and Medicaid will reimburse $1,199 USD. If the unitis rented to the patient, Medicare and Medicaid will pay $78.05 USD /month for up to 13 months, for a total of $819.55 USD. These are veryfavourable numbers for Therma Bright when taking into account themanufacturing cost of Venowave. Additionally, private insurers such asblue cross blue shield, UnitedHealth Group, etc., also use these codesas guidelines to determine reimbursement payouts.
Why is this soimportant? Previously, Venowave was placed into the E0676 HCPCS code.E0676 is a miscellaneous code with no set reimbursement, meaning thatwhen Venowave is billed for under this code, Medicare and Medicaid, aswell as private insurance companies will default to a $0reimbursement. While it is possible to submit a package of medicalnecessity under this code, with a detailed explanation of thepatients’ condition and why it should be reimbursed, the reality isthat most physicians or prescribing parties will not go through thisexercise as they are not reimbursed for the time and trouble it takes.Therma Bright experienced a similar situation with the temporary codesit was approved to sell Venowave under in 2023 – Without theprescribing party submitting a package of medical necessity, Venowaveby default will not be paid for. Additionally, these reimbursementissues are a barrier to prescribing parties recommending Venowave, asthey are not able to tell their patients if the device will be paidfor. Physicians tend to shy away from prescribing devices in thesecategories, as they could leave their patient with a large unexpectedmedical bill, reflecting badly on the prescribing party.
This new HCPCS codecombined with the preliminary payment determination establishes afixed payout for Venowave across public and private insurers in theUnited States, eliminating friction in payments as well as hesitancyby the prescribing parties in recommending the device. Therma Brightexpects to receive this new HCPCS code and payment determination afterthe biannual CMS meeting which was held at the end of May, 2024.
Venowave differentiatesitself from other available compression products in a number of ways.Currently, pneumatic devices and simple products that squeeze the legmake up the majority of the compression market. Inexpensive portablecompression devices simply squeeze and release the calf, and do notactively move fluid upwards towards the heart. Sequential compressiondevices are proven very effective, however they are not portable.Sequential compression devices have tubes attached to an aircompressor which inflates chambers in sequence, providing sequentialcompression. Typically these devices can only be used while lying inbed, on a couch or in a similar position, and do not allow the patientto remain ambulatory.
Venowave combines the best of both worlds, providing sequentialcompression without the use of tubes or wires, allowing the patient toremain completely ambulatory while receiving treatment. Additionally,Venowave is quiet, so patients can continue to receive treatment whilethey are sleeping or otherwise resting.
Currently in the United States an estimated25 million people are living with some form of Chronic Venousinsufficiency. Most go untreated or rely on simple compressionstockings for some form of minor relief, as proper treatment viasequential compression devices is too cumbersome and expensive. Theissuance of this new HCPCS code and payment determination opens upthese patients to the Venowave, a new and portable form of treatmentthat will not cost them anything out of pocket. This market alone,along with the management of Post Thrombotic Syndrome and preventionof primary thrombosis is potentially huge.
Additionally, ThermaBright is working towards securing reimbursement for DVT prevention.While Medicare and Medicaid do not pay for DVT prevention, privateinsurers do. Therma Bright is confident that the issuance of this newHCPCS code and payment determination will help patients accessVenowave for DVT prevention via their private health insurance, whichis another huge addressable market in the United States.
During the last year,Therma Bright has been meeting with potential distributors across theUnited States. Many have indicated interest in the Venowave pursuantto a positive outcome with regards to the HCPCS coding. Therma Brightcurrently has over 2000 Venowave units in inventory, which they expectcan be moved right away upon the issuance of the HCPCS code.
After these initial2000 units are sent to distributors, placed on patients, andreimbursement received, Therma Bright conservatively estimates moving500-1000 units / month. Given the high margin on Venowave, this willfare well for the company.
As Venowave is a high margin product, the companyis looking at the possibility of setting up a manufacturing operationin either the U.S, Canada or Mexico which would allow it to sell tothe VA in the US. This would open up yet another large market forVenowave in the United States.
For investors who may be interested in ThermaBright, it is important to note that Venowave isn’t its onlyproduct. The company also has respiratory health and consumer healthproduct portfolios. The respiratory health product portfolio featuresthe Digital Cough Test (DCT) app created by Therma Bright(TSXV:THRM) (OTCQB:TBRIF) and AI4LYF. The app uses artificialintelligence to detect multiple respiratory diseases by analyzing aperson’s cough sound and has shown a high accuracy rate. The app iscurrently in the process of securing a 513g FDA clearance, which willallow the company to charge for Remote Therapeutic Monitoring (RTM)and be used for patient reimbursement. The consumer health productportfolio features devices designed for pain relief, cold soreprevention and insect bite relief.
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