Health Check: Echo IQ eyes new AI payment code after US reimbursement knock-back

• Echo IQ has had a “frustrating” US reimbursement rejection, but there’s a Plan B
• Artrya signs up US hospital heart heavy hitter for its Sapphire trial
• Dorsavi gains traction in the US physical therapy sector

Heart disease detection play Echo IQ (ASX:EIQ) is eyeing a proposed new AI-focused reimbursement route, to maximise returns from its approved tools in the US.

Echo IQ shares went on trading halt yesterday pending an announcement about US reimbursement, which we expected to be good news.

Sadly, it was not to be.

The company has dipped out on obtaining a Category III Current Procedural Technology (CPT) code, for its AI-driven aortic stenosis detection tool, Echosolv AS.

Echosolv reads the results of echocardiograms and spits out a risk analysis in minutes.

The CPT codes in question are temporary measures, assigned to new and emerging technologies that don’t meet the criteria for a permanent Category I code.

Typically, they remain in place for up to five years.

CPT codes are important because they provide a standardised language for healthcare providers to describe medical services and procedures. This enables accurate and efficient payments from private insurers and the US Medicare system.

Echo IQ eyes new code, potential appeal

The knock-back suggests the gatekeepers are not yet up to speed with AI-driven tech. But the company notes proposed new codes specifically for that category.

Expected to be introduced next year, the new codes would cover health AI services that “augment physician capabilities and improve patient care”.

Echo IQ is also considering filing an appeal with the responsible body, the American Medical Association (AMA).

The process enables applicants to plead on the grounds that “relevant information existing at the time was not presented, or a material procedural irregularity occurred.”

In the meantime, the company will avail of another less specific mechanism, called the Miscellaneous Code 93799.

“Frustrating” decision is merely a bump in the road

Echo IQ CEO Dustin Haines says the decision was “frustrating”, But the company respects the AMA’s ruling.

“Despite this decision, we are confident that ongoing engagement with the regulatory body will help ensure that Echosolv AS remains front of mind, particularly as new frameworks for AI-based technologies … are developed.”

The FDA approved Echosolv AS in October last year.

In the meantime, Echo IQ is progressing its FDA submission for a broader heart failure detection tool, Echosolv HF.

The company has been carrying out a validation study with the Mayo Clinic, which is about to complete.

Echo IQ shares lost cents, or 14% after yesterday afternoon’s disclosure. This morning they had clawed back about half the loss.

Cashed-up Artrya signs up US heart leader

Still on matters of the heart, Artrya (ASX:AYA) has signed up a large specialist heart hospital in Alabama to participate in its trial dubbed Sapphire.

Sapphire tests Artrya’s Salix, the company’s AI-based platform to assess and manage coronary artery plaque. This is based on reading standard computed tomography scans.

The institution in question is the Huntsville Hospital Heart Centre, part of the expansive not-for-profit Huntsville Hospital Health System. The network  handles 420,000 emergency visits and 1.21 million outpatient procedures annually.

Huntsville’s involvement is subject to final documentation and ethics approval.

Huntsville supplements Piedmont Healthcare, one of up to eight high-volume US centres the company plans to include in the study.

Sapphire is on schedule to launch in early 2026.

The perils of plaque

High-risk plaque often indicates heart disease, yet it’s often missed by current surveillance means and is often fatal.

The FDA approved the Salix Coronary Anatomy (SCA) module in March this year and in August green-lighted Salix Coronary Plaque (SCP).

These are for the “near real time, point-of-care assessment and management of coronary artery disease”.

Echo IQ has sold SCA in the US since July.

Artrya last month raised a chunky $75 million in a placement and a further $5 million in an oversubscribed share purchase plan.

The company expects the FDA to approve a third device – Salix Coronary Flow – early next year.

Dorsavi has the right US moves

A specialist in analysing body movement and motion, Dorsavi (ASX:DVL) is gaining traction in the US physical therapy (PT) market.

The company recently held a training day in Arizona for its Vimove product, with 90% conversion of potential customers into active ones.

Put another way, 27 of the 30 PT clinics attending signed up for Vimove, “well above industry norms and our historical cadence”.

Vimove delivers a “clear, objective, radiology-style report” to surgeons and patients.

In September the company achieved 80 new Vimove subscriptions, compared with the usual 4-5 per month. The client clinics have delivered “consistent”  annual recurring revenue of around $3,000.

Dorsavi cites a US PT market of more than 66,000 clinics.

Not surprisingly Dorsavi is planning follow-up training days, in Texas, the Mid-West and Florida.

Dorsavi also has been active in the sporting milieu, with Vimove users including US NBA and NFL (basketball and American football) teams and the English Premier League (soccer).

“With accelerating adoption, strong surgeon endorsement and proven economic value per clinic, we believe we are at the inflection point of significant growth in the US PT market,” Dorvasi CEO Andrew Ronchi says.

Dorsavi remains a work in progress, having reported full-year revenue of $1.13 million, down 13% and a $1.5 million loss.

The company derived around 60% of its turnover from the US.

But Dorvasi shares have all the right moves, gaining 540% since the start of the year.

Pot stock blooms amid dodgy import oversupply

A record harvest and cost cutting propelled medical pot purveyor ECS Botanics (ASX:ECS) to positive cash flow for the September quarter: a $140,000 surplus compared with a June quarter deficit of $1.46 million.

ECS managed revenue of $5.7 million, 19% up quarter on quarter and 15% up on the year.

The company calls out a 21% increase in direct-to-consumer revenue of $3.2 million, “with growth recorded across all product lines”.

ECS notes that imported cannabis flower is flooding the local market. Much of this stuff is sourced from non-complaint facilities “with limited quality testing locally”.

To counter this, the company is showcasing its virtues of being organically certified and complying with Good Manufacturing Practice standards.

The company is pushing hard into European markets.

Radio silence, but stay tuned 

Two biotechs have entered trading halt pending significant announcements.

Mental health play TrivarX (ASX:TRI) promises a triple banger: a trial result, a material acquisition and potential capital raising.

The trial results allude to an interim readout from the company’s clinical study with the Greater Los Angeles Research and Education Foundation and Veterans Affairs Greater Los Angeles Healthcare System.

Trivarx hopes to tell all by Thursday morning.

In August the company said it had recruited 30 patients for the trial.

The study evaluates the company’s novel  single-lead  electrocardiogram algorithm for detecting depression in veterans with suspected sleep apnoea.

We all know that bad sleep is not good for mental health.

PainChek (ASX:PCK) shares are frozen pending an FDA decision on whether to approve its digital pain management app for sale in the US.

The company expects to announce the agency’s decree – hopefully a positive one – tomorrow morning.

You can read more on that one > here.

At Stockhead, we tell it as it is. While PainChek is a Stockhead client, the company did not sponsor this article.