New CMS Policy for taVNS Will Impact BioElectRx Vendors

by Victor Pikov, contributing editor

August 2024 issue, BioElectRx Business Report

The landscape of medical device coverage is ever-changing, influenced by advancements in technology, evolving clinical evidence, and regulatory decisions. One such advancement is transcutaneous auricular vagus nerve stimulation, a novel therapy with a broad spectrum of potential applications, such as neurological diseases (chronic pain, epilepsy, migraine, and tinnitus) and psychiatric disorders (depression, PTSD, anxiety, substance abuse, and opioid withdrawal).

Recently, taVNS also got FDA clearance for its first bioelectronic medicine indication: irritable bowel syndrome, with many more on the horizon. However, commercialization of taVNS devices faces a complex maze of insurance and reimbursement policies.

The Centers for Medicare & Medicaid Services annually updates their coverage policies for transcutaneous electrical nerve stimulation devices, including taVNS. According to their 2024 updated policy, these devices are now covered solely for the relief of chronic lower back pain, with a limit of up to 20 treatments per year. In the past, CMS also covered pain relief in conditions such as fibromyalgia and osteoarthritis; however that coverage was discontinued based on what CMS described as a lack of “convincing evidence” supporting their efficacy.

Additionally, CMS published Article A55240, which specifically addresses the coverage of taVNS devices with percutaneous needles, such as P-Stim, ANSiStim, E-Pulse, and NSS-2 Bridge. The article clarified that these devices are not eligible for coverage under CPT code 64555, which pertains to percutaneous implantation of neurostimulators. The rationale provided was that stimulation of auricular acupoints does not align with the scope of that code.

The complexity of classifying and reimbursing taVNS devices became more pronounced during the first biannual HCPCS Level II public meeting held in May 2024. Spark Biomedical, a key player in the field, advocated for a distinct classification for their taVNS device designed to relieve opioid withdrawal symptoms. Spark’s argument centered on the need to differentiate their device from conventional TENS units, citing its unique therapeutic application and technology. Spark recommended that CMS re-classify their device as “external cranial neurostimulator of the auriculotemporal nerve and auricular branch of the vagus nerve.”

In response to Spark’s advocacy, CMS established two preliminary new HCPCS Level II codes: E0721, for transcutaneous electrical nerve stimulators targeting nerves in the auricular region, and A4543, for supplies used with these stimulators on a monthly basis.

These new codes apply not only to Spark’s device and its FDA-cleared indication for opioid withdrawal symptoms, but broadly reclassify the entire category of taVNS devices, as long as the device “has an expected life of at least three years” and is “used to serve a medical purpose” in a home setting.

As CMS continues to evaluate these preliminary HCPCS codes, the next critical phase will be the payment determination process. This will involve assessing the financial implications of the new codes and ensuring that they reflect the cost of providing and using taVNS devices. The final decision is anticipated on July 1, 2025, and will be crucial in shaping the future landscape of coverage for taVNS therapy.

The establishment of new HCPCS codes represents a significant development in the coverage of taVNS therapies toward their effective integration into patient care. These codes also highlight a broader challenge within the healthcare system: the need for intricate and appropriate coding to ensure fair reimbursement and access to innovative therapies.