VascuFlo, a Buffalo-area medical service that offers a non-invasive treatment for chest pain that squeezes blood up from the legs to the heart, is getting squeezed out of business.
The chief executive officer announced Friday that the company will likely close next week following a lengthy billing dispute with the region’s major health insurance companies.
Aaron Hirsch said BlueCross BlueShield of Western New York, Independent Health and Univera Healthcare determined that VascuFlo had been overbilling for enhanced external counterpulsation and, as a result, last year significantly lowered their reimbursement for the therapy. In addition, he said Independent Health and Univera also last fall started withholding payments until VascuFlo repaid the insurers for some of the past overbilled services.
“We’re not a cash cow. There is no extra money to pay them back. We’re at a point where we can’t meet payroll,” said Hirsch.
Enhanced external counterpulsation is a procedure in which a set of inflatable cuffs mechanically compresses the blood vessels in the legs to increase blood flow and oxygen to the heart. The Food and Drug Administration in 1995 approved the therapy for coronary artery disease and angina, cardiogenic shock and for use during a heart attack. In 2002, the FDA approved it for congestive heart failure.
Hirsch, a pharmacist, opened VascuFlo in 2002 in Amherst. The treatment evolved from a principle described in 1953 by Harvard University researchers about how the heart uses oxygen differently depending on whether it is resting or working.
Although the technique has shown promise, it was overshadowed by the emergence of heart bypass surgery and angioplasty. Moreover, Medicare and private insurers cover the treatment only for angina – chest pain from heart disease – because of a lack of medical evidence about its effectiveness for other conditions.
Despite some promising studies, questions also remain about its long-term effectiveness for angina, according to a 2010 review by the Cochrane Collaboration, an independent group that examines the effectiveness of medical treatments.
The lingering skepticism and limited reimbursement have proved to be obstacles to growth.
Vasomedical Inc., a major manufacturer of the devices for enhanced external counterpulsation, noted in its 2012 annual report that the prospects of the company were dependent on the expansion of medical reimbursement for treatments beyond angina.
Hirsch said all three insurance companies in 2011 audited VascuFlo.
Independent Health, the insurer with the most patients using VascuFlo, concluded that it had overpaid by $225,000 from September 2009 through December 2011, Hirsch said. This represented about 50 percent of VascuFlo’s 2012 projected revenue, he said. Similarly, Univera’s audit found that it had overpaid $45,000 from September 2010 through August 2011, he said.
Hirsch said the insurers found that the company had billed separately for five aspects of the treatment rather than billing the treatment as one bundled service. He said VascuFlo’s use of five billing codes incorrectly was unintentional, and he questioned how it was possible for all three insurers to independently conduct audits at about the same time, leading his reimbursement to be cut nearly in half for each treatment from about $230 to $125. Patients generally go for 35 sessions.
Univera reported that the overcharges identified by its audit were for services rendered to members in Medicare and Medicaid and that Univera is required by the government health programs to recoup such overcharges.
“This requirement is nonnegotiable,” said Peter Kates, Univera’s regional vice president for corporate communications.
“For nearly two years, Univera Healthcare has made a good-faith effort to come to a mutually acceptable plan to recoup these overcharges. Failing in these efforts, we have moved ahead with submitting adjustments to the claims identified in the 2011 audit,” he said.
“We are puzzled as to how these adjustments have impacted their cash flow since, to date, no overcharges have been returned to Univera Healthcare,” Kates said.
VascuFlo at one time employed 10 people and served patients at five satellite sites but now employs three people and serves patients at two sites, said Hirsch, who bought the Vasomedical system after he watched his father receive the treatment in Rochester.
VascuFlo is the only provider of enhanced external counterpulsation in Western New York.