Newly Introduced Bipartisan Bill Seeks to Clarify Fully Implanted Active Middle Ear Hearing Devices as Prosthetics, Not Hearing Aids, Making Them Eligible for Medicare Coverage
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The introduction of the Hearing Device Coverage Clarification Act could have significant implications for the healthcare market, particularly within the hearing aid segment. If passed, this bipartisan bill would reclassify fully implanted active middle ear hearing devices as prosthetics, thereby making them eligible for Medicare coverage. This legislative change could increase accessibility for Medicare beneficiaries, potentially expanding the customer base for companies like Envoy Medical.
From a policy standpoint, the reclassification addresses a longstanding gap in coverage that has been a barrier to entry for advanced hearing technologies. By potentially altering the competitive landscape, companies specializing in fully implanted devices may see increased demand, as well as a boost in innovation and competition within the sector. The implications for the stock market could be considerable, with investors likely to monitor the progress of the bill closely, as it may result in increased sales and market share for those companies whose products would become eligible for coverage.
Envoy Medical's stock (NASDAQ: COCH) may experience volatility depending on the legislative process and eventual outcome of the bill. Investors should consider the potential for increased revenue streams if the act is passed, as Medicare beneficiaries represent a substantial portion of the hearing-impaired population. However, they should also weigh the risks associated with the uncertainty of the legislative process and potential pushback from other stakeholders in the healthcare system who may be impacted financially by such a change.
It's important to evaluate the company's current financial health and its capacity to meet potential increased demand. Investors would benefit from scrutinizing Envoy Medical's production capabilities, supply chain robustness and overall financial strategy to determine whether it is well-positioned to capitalize on this potential market expansion.
The hearing aid industry is characterized by rapid technological advancements and a growing elderly population that is increasingly susceptible to hearing loss. The potential reclassification of fully implanted active middle ear hearing devices as prosthetics could disrupt the traditional hearing aid market. Market analysts should assess the readiness of Envoy Medical and similar companies to scale operations and their ability to navigate the regulatory environment post-reclassification.
Analyzing historical sales data of similar medical devices that have undergone coverage changes can provide insights into the potential market growth for Envoy Medical's Esteem® device. Additionally, understanding the competitive dynamics, including the entry barriers for new competitors and the threat of substitute products, will be crucial in forecasting the long-term impact on the company's market position.
Envoy Medical’s FDA Approved Esteem® Fully Implanted Active Middle Ear Hearing Device May Now Have an Opportunity to be a Coverable Benefit
WHITE BEAR LAKE, Minnesota, Feb. 07, 2024 (GLOBE NEWSWIRE) -- Envoy Medical®, Inc. (“Envoy Medical”) (NASDAQ: “COCH”), a revolutionary hearing health company focused on fully implanted hearing systems, today announced the introduction of a new bipartisan Congressional bill, titled the Hearing Device Coverage Clarification Act. The bill seeks to clarify that fully implanted active middle ear hearing devices are prosthetics and not subject to the current Medicare hearing aid coverage exclusion.
The Social Security Act of 1965 excluded hearing aids, eyeglasses, and dental care from being coverable benefits under Medicare and Medicaid. The Center for Medicare and Medicaid Services (“CMS”) has broadly interpreted what a “hearing aid” is to include devices that are not hearing aids. Envoy Medical believes this inappropriate classification has resulted in breakthrough hearing technologies not being available to Medicare beneficiaries and has hindered innovation and competition in the hearing device marketplace.
The legislation was introduced on February 6, 2024 in the U.S. House of Representatives by Representatives Michelle Fischbach (R-MN) and Angie Craig (D-MN). The legislation is expected to gain additional bipartisan support following the bill’s introduction.
“The Hearing Device Coverage Clarification Act is a big step in the right direction for hearing loss patients who deserve access to more options. Hearing aids are wonderful technologies – we are in no way suggesting otherwise – but they are not for everyone suffering from disabling hearing loss. We have seen discouraged longtime hearing aid users rejoin life with our fully implanted Esteem® hearing device, and we believe more Medicare beneficiaries deserve that opportunity,” said Envoy Medical CEO Brent Lucas. “We are thrilled that Representatives Fischbach and Craig are committed to bringing this issue forward for the benefit of their constituents’ health by leading the effort to correct what we believe to be an administrative mistake. Both Representatives Fischbach and Craig, along with their amazing staff, have taken the time to learn about this issue, the technology, and understand why it is important. We are also grateful for the other members of the U.S. House and Senate who have offered their support and we look forward to working with them as we proceed.”
“Every day, Minnesota-based med tech companies are creating brand new technologies, like the Esteem, that have the potential to bring immense benefits to Minnesotans and Americans across the country – but only if they are accessible. That's why I'm working with my colleague Rep. Michelle Fischbach on this bipartisan bill to correct the misclassification of these hearing technologies and ensure Minnesotans are receiving the coverage they need to access these life-changing devices,” said Representative Craig.
"The FDA has approved the fully implanted hearing devices as prosthetics, not simple hearing aids, and yet CMS has been classifying them as a hearing aid, meaning its implantation cannot be covered by Medicare," said Representative Fischbach. "These devices could help countless people regain their hearing, but CMS wants to price so many of them out of taking that monumental step for their well-being. I am proud to introduce legislation that will enable more people to gain access to these life-changing products."
Fully Implanted Active Middle Ear Hearing Devices are not hearing aids for a variety of reasons. For starters, they are, by definition, fully implanted – nothing is external in or on the ear. These devices do not use external microphones to pick up sound. As fully implanted medical devices, they come to market through a significantly different regulatory pathway than hearing aids. The implant requires a surgical procedure (which typically takes three to four hours) by a highly specialized and skilled ear surgeon where part of the middle ear is bypassed or replaced to compensate for the damaged inner ear. Once positioned, fully implanted active middle ear devices become the patient’s hearing pathway and will provide around-the-clock therapy because a patient cannot simply “take off” the device.
Envoy Medical is one of the few companies worldwide that has a fully implanted active middle implant, and currently the only company that has an FDA approved (PMA approval in 2010) fully implanted active middle ear hearing device. Envoy Medical believes that this legislation would not only provide access to an important technology, but it also would encourage more innovation and competition.
“Passage of this bill will absolutely result in more competition and more innovation. Envoy Medical is just one of many companies that would begin to reinvest into the fully implanted active middle ear hearing device segment,” Lucas added. “That would mean more innovation, more competition, more well-paying jobs here in America, and, most importantly, more solutions for the nearly 40 million Americans who suffer from disabling hearing loss.”
Lucas also recently sat down with host Frank Jaskulke as part of the popular Medical Alley Podcast series, https://medicalalley.org/, where he discussed the advancements being brought to the hearing health market and the greater need for acceptance of fully implanted devices such as the Envoy Esteem implant and to support new innovations in fully implanted cochlear devices such as the Envoy Acclaim investigational device within the medical and insurance communities.
About Envoy Medical
Envoy Medical, Inc. (NASDAQ: COCH), headquartered in White Bear Lake, Minnesota, is a hearing health company focused on providing innovative medical technologies. As a U.S. company, Envoy Medical provides jobs in Minnesota.
Envoy Medical is dedicated to pushing hearing technology beyond the status quo to provide patients with improved access, usability, independence and quality of life.
About the Fully Implanted Esteem® Active Middle Ear Hearing Device
The fully implanted Esteem® active middle ear hearing device is the only FDA approved, completely internal hearing device designed to improve the hearing of adults diagnosed with moderate to severe sensorineural hearing loss.
Instead of a microphone, the Esteem device uses a novel sensor to leverage the natural anatomy of the ear to capture sound and convert it into electrical signals that are used by the implant to address hearing loss.
The Esteem implant has no externally-worn components required for daily use which allows for “invisible hearing,” the potential for 24/7 hearing, and removing many limitations of hearing aids. The Esteem implant is available in the U.S. through FDA PMA approval. It is not currently covered by Medicare or Medicaid, and is not widely covered by private insurers.
To learn more about the Esteem implant, visit https://www.envoymedical.com/middle-ear-implants.
About the Fully Implanted Acclaim® Cochlear Implant
We believe the fully implanted Acclaim Cochlear Implant will be a first-of-its-kind fully implanted cochlear implant. Envoy Medical’s fully implanted technology includes a sensor designed to leverage the natural anatomy of the ear instead of a microphone to capture sound.
The Acclaim system is designed to address severe to profound sensorineural hearing loss that is not adequately addressed by hearing aids.
The Acclaim Cochlear Implant received the Breakthrough Device Designation from the U.S. Food and Drug Administration (FDA) in 2019. We believe the Acclaim system was the first hearing-focused device to receive Breakthrough Device Designation.
CAUTION: The fully implanted Acclaim Cochlear Implant is an investigational device. Limited by United States law to investigational use.
Important safety information for the Esteem can be found at: https://www.envoymedical.com/safety-information.
Additional Information and Where to Find It
Copies of the documents filed by Envoy Medical with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-Looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. Such statements may include, but are not limited to, statements regarding the expectations of Envoy Medical concerning the outlook for its business, productivity, plans and goals for future operational improvements and capital investments, the Acclaim being the first to market fully implanted cochlear implant, the impact of proposed legislation on the hearing health market, reimbursement for the Esteem device, and the Envoy Medical business, and future market conditions or economic performance, as well as any information concerning possible or assumed future operations of Envoy Medical. The forward-looking statements contained in this press release reflect Envoy Medical’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking statement. Envoy Medical does not guarantee that the transactions and events described will happen as described (or that they will happen at all). These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to changes in the market price of shares of Envoy Medical’s Class A Common Stock; Envoy Medical’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; unpredictability in the medical device industry, the regulatory process to approve medical devices, and the clinical development process of Envoy Medical products; competition in the medical device industry, and the failure to introduce new products and services in a timely manner or at competitive prices to compete successfully against competitors; disruptions in relationships with Envoy Medical’s suppliers, or disruptions in Envoy Medical’s own production capabilities for some of the key components and materials of its products; changes in the need for capital and the availability of financing and capital to fund these needs; changes in interest rates or rates of inflation; legal, regulatory and other proceedings could be costly and time-consuming to defend; changes in applicable laws or regulations, or the application thereof on Envoy Medical; a loss of any of Envoy Medical’s key intellectual property rights or failure to adequately protect intellectual property rights; the effects of catastrophic events, including war, terrorism and other international conflicts; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” in the Registration Statement on Form S-4 (File No. 333-271920) filed by Envoy Medical (then known as Anzu Special Acquisition Corp I), and in other reports Envoy Medical files with, the SEC. If any of these risks materialize or Envoy Medical’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. While forward-looking statements reflect Envoy Medical’s good faith beliefs, they are not guarantees of future performance. Envoy Medical disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to Envoy Medical.
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Investor Contact:
Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com
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