NeuroMetrix Disappoints

With Tuesday's quarterly update, NueroMetrix (NURO Quote) failed to calm investors' nerves.

For starters, the marketer of controversial nerve studies missed Wall Street expectations by a large measure. The company's first-quarter revenue, stuck at last year's level of $11.8 million, fell shy of the $13 million consensus estimate. Moreover, the company's net loss of $1.4 million, or 11 cents a share, came in 10 times higher than a year ago. Analysts had been hoping for a modest profit instead.

Shares of NeuroMetrix slid 4.6% to $9.66 on the news.

Still, NeuroMetrix signaled that better times could be on the way. Notably, the company stated that a regional Medicare carrier has issued a favorable reimbursement decision about nerve tests performed by its NC-stat devices. Specifically, the company said that First Coast Service Options will allow healthcare providers to again start billing for NC-stat tests using "traditional nerve conduction codes" -- meant for intensive tests triggering lucrative payments -- rather than problematic miscellaneous codes.

Some other insurers now insist on miscellaneous codes, demanding heavy documentation with no guarantees on reimbursement, for NC-stat studies instead.

"Several commercial payers, including certain Blue Cross Blue Shield regional carriers, have taken unfavorable positions toward the NC-stat, referring to it as experimental and investigational," NeuroMetrix CEO Shai Gozani said Tuesday. "On the other hand ... FCSO has appropriately determined that the issue of nerve conduction is a matter for the American Medical Association.

"We view this as a very positive development for our customers and for NeuroMetrix."