Opinion ID: 212733
Heading Depth: 3
Heading Rank: 4

Heading: Quarterly Report, First Quarter 2006

Text: The plaintiffs' next allegations concern the third quarter report for 2006. In that report, NeuroMetrix maintained its position on reimbursement: Generally, we believe that the nerve conduction studies performed by our customers with the NC-Stat System have been satisfactorily covered by third-party payers. As our presence in the market expands and the use of the NC-Stat System increases, we have experienced and are likely to continue to experience an increased focus from third-party payers and governmental agencies regarding ... reimbursement... [and] the professional requirements for performing nerve conduction studies in general. Widespread adoption of the NC-Stat System is unlikely to occur if physicians do not receive satisfactory reimbursement from third-party payers for procedures performed with the NC-Stat System . ... A successful market expansion will depend upon, in part, our targeting of primary care and specialty physicians who traditionally have not been targeted by companies selling equipment used to perform nerve conduction studies and our ability to alter physicians' practices relating to the diagnosis of neuropathies. Id. at 47 (emphasis in original). The complaint first alleges that the statements were false and misleading because they failed to make the same disclosures discussed above, relating to the advice of the reimbursement experts, the advice by sales personnel to bill under neurology codes and the serious risk of non-reimbursement. We again conclude that the statements are not misleading because of the failure to include any of those alleged facts. The statement is clear that generally, reimbursement is satisfactory, but that the company ha[s] experienced and [is] likely to continue to experience scrutiny from third-party payers, which could have a significant effect on future profitability. Id. (emphasis omitted). Nothing about this statement changes our view that, under Cooperman, 171 F.3d at 50-51, disclosure of the internal opinions of two qualified employees was not required to prevent skewing of the total mix of information available to shareholders. Although by mid-2006, when this statement was made, NeuroMetrix certainly was aware that its customers were experiencing reimbursement issues, the complaint alleges only that the complaints were sporadic and regional; that is consistent with the qualified statement about reimbursements actually made in this disclosure. [6]