Opinion ID: 212733
Heading Depth: 3
Heading Rank: 5

Heading: Quarterly Report and Conference Call, Second Quarter 2006

Text: The plaintiffs next challenge the sufficiency of the disclosures contained in a July 2006 conference call with analysts and investors and the second quarter report issued in August 2006. In the conference call, Mr. Gozani stated: Basically, the reimbursement situation for NC-Stat is very positive. We believe that over 600 payors have reimbursed our customers and on a routine basis, our customers are clearly being reimbursed. Obviously as for any medical device company in today's reimbursement environment, there are from time to time reimbursement issues that come up that have to be addressed, many of them often are just the way customers code, the way they code their insurance claims or other very straightforward administrative issues. Sometimes they pertain to the misunderstandings of the technology and so forth. That is just par for the course in this type of business. ... We continue to work with payors to explain our technology who continue to do studies demonstrating the viability and strength of our technology and are very positive about the situation. R.32 at 48-49 (emphasis in original). Defendant Gregory added that the company would not comment specifically on what our overall reimbursement mix is, but that it was very pleased with the reimbursement landscape[] [a]nd that it allows physicians to appropriately perform these tests and be reimbursed appropriately for doing them. Id. at 48. Mr. Gozani then clarified that the company was not involved obviously ... in billing by our customers... other than providing them with basic published information on expected coding practices. Id. at 49. One month later, NeuroMetrix filed its quarterly report for the second quarter of 2006, which was not materially different from those of prior quarters. Indeed, it repeated that it believed the procedure was reimbursed satisfactorily, even though it was the subject of increased focus from payers. Id. Anima claims that these statements are false and misleading for the same reasons it has cited repeatedly in the complaint. We again conclude that these statements are not rendered misleading by the omission of any of the information Anima claims it should have included. The statements continue to acknowledge some difficulties, and although they are certainly optimistic about the future, they are not misleading because they fail to identify a serious risk of non-reimbursement. See Backman, 910 F.2d at 16 (distinguishing between the commercial failure allegations and the allegations of undisclosed details relating to risks). With respect to this disclosure, the plaintiffs also claim that the statement was misleading for what the plaintiffs term a reckless[] failure to disclose that NeuroMetrix was aware of pervasive problems with insurer reimbursement for NC-Stat tests. R.32 at 49-50. Although this alleged misstatement might give us pause if the allegations of the complaint were sufficient to support it, they are not. The complaint is more than seventy pages in length, but it is relatively thin on specific claims regarding reimbursement denials. [7] Moreover, because of its structure, it is difficult to place any of the information regarding the reimbursement along the timeline of the disclosures. The failure of the complaint to detail with some greater degree of specificity what these pervasive problems were is fatal to this allegation. See ACA Fin. Guar., 512 F.3d at 63 (It is true, as the plaintiffs argue, that the PSLRA does not require plaintiffs to plead evidence. But more meat was needed on these bones. (internal citations omitted)).