Reimbursement due diligence for a molecular diagnostics acquisition.

A publicly traded technology acquirer, working alongside its investment bank, was evaluating a potential transaction involving a commercial-stage molecular diagnostics company. The target's valuation rested heavily on a single variable: the timing, level, and durability of Medicare reimbursement for a portfolio of proprietary laboratory analysis (PLA) codes.

Reimbursement was both the largest driver of projected revenue growth and the largest source of investment risk — yet it sat outside the acquirer's core expertise. They needed an independent assessment to pressure-test the target's revenue model before committing.

Wellguidant Advisors conducted a systematic, multi-layered reimbursement diligence assessment structured around the three pillars that determine whether a diagnostic test generates revenue: coding, coverage, and payment.

• Coding analysis: Evaluated the durability and structural integrity of the target's PLA code portfolio, assessing each code descriptor against AMA conventions and identifying administrative risks before they could become coverage obstacles.
• Coverage analysis: Cross-walked every code against the existing Medicare Coverage Database, MolDx local coverage determinations, and national coverage policy — distinguishing genuine regulatory barriers from timeline risk, and isolating the specific codes carrying elevated coverage exposure.
• Payment analysis: Applied independent statistical methods to a curated pool of comparable codes to test the credibility of the target's pricing assumptions, and assessed alternative CMS rate-setting pathways and their revenue implications.
• Primary research: Supplemented the policy review with blinded interviews of current and former payer decision-makers spanning Medicare, Medicare Advantage, Medicaid, and commercial plans, surfacing how coverage gatekeepers actually evaluate this category of technology.

We delivered to the investment team a clear, decision-ready picture: which assumptions in the target's model were conservative, which were optimistic, and where the genuine risk concentrated. Rather than a yes-or-no verdict, the assessment gave the acquirer a risk-calibrated framework — separating the durable assets from the execution risks tied to evidence generation and coverage timelines — so the team could weigh the opportunity with clear eyes.

Reimbursement risk in diagnostics is easy to underestimate and expensive to get wrong. By isolating it as a discrete, rigorously analyzed workstream, we helped the client move forward with a grounded understanding of the single variable most likely to make or break the investment thesis.