The Centers for Medicare and Medicaid Services has proposed national Medicare rates for extended Holter heart monitoring, potentially ending a years-long saga for iRhythm Technologies and the cardiac monitoring market.
The agency released its proposed 2023 Physician Fee Schedule after the market closed Thursday. In the rule, the CMS set national rates for a list of cardiac monitoring codes.
The national rate for iRhythm’s most commonly used code, applied to the company’s Zio Xt long-term monitor, was proposed at $229, according to multiple analyst reports. The rate is just below the roughly $233 price currently offered by Novitas Solutions, the regional Medicare rate setter that processes the majority of iRhythm’s claims.
However, the proposed price is lower than the $329 rate offered by National Government Services, an Illinois-based Medicare rate setter that recently increased its price. The CMS’s proposed rate is also lower than iRhythm’s historic rate of about $311.
Still, some Wall Street analysts said that the national rate likely will be a boost for the company.
William Blair analysts wrote in a Friday note that the $229 proposed rate is “a positive update since it should be a level where iRhythm can profitably service the CMS market. If finalized later this year, it can provide investors with additional confidence in the long-term durability of both private and public reimbursement.”
The rule still will need to be finalized this fall, leaving plenty of time for changes. In 2020, the CMS proposed permanent codes for cardiac monitoring before ultimately reversing its proposal in the final Physician Fee Schedule.
The move passed rate-setting back to the Medicare Administrative Contractors like Novitas, which slashed rates. Novitas’s 2021 cuts spurred a 83% drop in iRhythm’s stock price in less than seven months, a debacle that it's still recovering from, and created a volatile environment that led to its new CEO resigning after about four months on the job.
iRhythm’s shares gained as much as 21% when the market opened Friday. CEO Quentin Blackford said in a statement that the company will continue to work with the CMS as the rule is finalized.
If finalized, the rates will take effect on Jan. 1, 2023.