In mid-August, health service provider IM Medical‘s managing director Laurie Williams told The Age that he expected his business “to be capitalised at $40–50 million by the end of the fourth quarter”. It was a bold prediction for a company valued by the sharemarket at $7.6 million which had an operating outflow of $600k in the preceding quarter.

But in the subsequent four months IM has really kicked on. Customer usage of its novel Intelliheart device has increased by several hundred per cent, while increased market support has seen the company’s value soar to $27 million.

A range of factors have contributed to IM’s turnaround – but the one that has got some GPs talking is the company’s Medicare billing practices.

Marrying the company’s public releases with published Medicare statistics suggests that IM is the provider primarily responsible for explosive growth in rebates claimed under Medicare Benefits Schedule Item Number 11611 in Victoria – from $4,048 in October 2005 to $64,678 in October 2006. Item 11611 is for the use of “arterial waveform analysis” for cardiac testing. Rebates claimed under this item number by IM would relate to pulse wave analysis using a system supplied by Sydney company Atcor Medical and incorporated in the Intelliheart device – the SphygmoCor Px Pulse Wave Analysis (PWA) System.

A host of subtleties determine whether a procedure falls within a specific Medicare Benefits Schedule Item Number, and Atcor Medical would be delighted if SphygmoCor qualified for public funding in Australia. But the company announced on 16 June 2006 that its initial application to the Australian Medical Services Advisory Committee for Medicare funding had been unsuccessful.

This application would have been entirely unnecessary if the company’s procedure already qualified for funding under Item 11611 of the Medicare Benefits Schedule. The SphygmoCor system does not appear to meet the requirements of Item 11611, as the Item applies to the “measurement of radial and ulnar and brachial arterial pressures bilaterally using Doppler or plethysmographic techniques” – not techniques that are employed by the SphygmoCor system.

When contacted regarding the Medicare rebates claimed by IM for Pulse Wave Analysis, IM CEO Tom Bonvino assured us that the company’s practices “had all been checked out”.

It will only be if the Medicare investigators ever come calling that the company’s interpretation of its entitlement to Medicare rebates will be proved to be well founded.