ShockWave Medical, Inc. (NASDAQ:SWAV) Q4 2022 Earnings Call Transcript

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Rob Fletcher: All right, thanks for the question. When it comes to the in-patient side, I think the important thing to understand is that all of the PCI procedures map to one or four different DRGs which are our payment bands and the determination of whether you get sort of a baseline version of the DRG or some sort of higher paying version are really all based on patient factors, like complications and comorbidities and it’s not really based on the device type, per se. So in that sense, I think all of the PCI devices are on a level playing field. And so, I think that the – most important thing to understand. So that’s why kind of the inpatient reimbursement side of things as long as you’re kind of in that same group with DRGs which we are and everything else is a kind of will get paid the same.

I think that’s the important thing to understand. And so, I’m not sure that we have. We are enjoying in NTAP presently, but just sort of the two edges of this as well. I don’t know that it’s – I’d point to that as the thing that’s driving our business incrementally. It’s there. It’s helpful. But if it goes away, it’s also sort of – we don’t think there’s – we don’t know that there’s upside. We don’t know if there’s downside to it per se. So we’re not really handicapping it as a major driver. We understand how that could be the case in many other markets. But in the interventional space, as Doug mentioned earlier in the call, it’s really tends to be driven by what’s happening on the outpatient side.

Doug Godshall: Yes and – one of the reasons I feel pretty confident that, that is true is when we launched in peripheral, where about half of the hospital-based procedures are inpatient for, I don’t know, for four years, all we heard was reimbursed, you’re not reimbursed. And when we try to explain to customers, yes, but we fall into the same DRG as atherectomy and stents and everything that they would point back to the — yes, but outpatient atherecomy has incremental payment and you don’t. And it – we were sort of pigeon hold as a non-reimbursed device, even though in theory, half of our procedures were paid exactly the same as other procedures because it’s all dictated by the patient condition, not by the device that you’re using, and when we received incremental NTAP for inpatient procedure, that didn’t have any incremental benefit for us in our coronary pickup.

The pressure that we felt initially when we launched and the customer frustration when we initially launched was, hey, this is a big new cost to our PCI procedures. You beg our reimbursement as soon as we got transitional pass-through it completely release all pressure and nothing really changed a few months later when we got NTAP.

Isaac Zacharias: Yes, let me just pile on one thing because we get this question a lot, and we’re trying to put it to bed. The other scenario that we can point to as – in addition to what Doug just said is, as Rob said, there’s – if you do an interventional PCI, it maps to one or four DRGs, it doesn’t – none of those matter what technology is used in the procedure. So if you take atherectomy, for instance, if you take atherectomy there it is, if you do atherectomy PCI and it’s an inpatient procedure, one atherectomy product on the market cost very similar amount to what IVL cost. The other atherectomy product costs about half that much and we never hear any physician talking about choosing one atherectomy product over another because of the cost. They just don’t think that way.

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