ADJUSTMENTS TO CMS FINAL RULE BRIGHTEN PROSPECTS FOR DEVICE FIRMS, EXPERTS SAY
The device industry, which feared a Centers for Medicare & Medicaid Services (CMS) proposal to cut reimbursement rates under Medicare's inpatient prospective payment system (IPPS), can breathe a sigh of relief.
The CMS Aug. 1 issued its final IPPS rule, which included far less drastic cuts than the agency's original April proposal. The adjustments CMS made to the IPPS final rule have allowed devicemakers to imagine a brighter future, said Merrill Lynch analyst Katherine Martinelli in a research note.
The CMS' original proposal included cuts for services to treat abnormal heart rhythms and heart failure of 22 to 24 percent and cuts for stent procedures of 24 to 33 percent, but the final cuts are 2 to 5 percent and 1 to 3 percent, respectively, she noted.
Medtronic said implantable cardioverter-defibrillator reimbursement rates will be cut by around 2.7 percent under the new rule, compared with the April proposal to cut them by more than 20 percent.
"We view the revised cardio reimbursement cuts as highly manageable and consistent with the pricing assumptions in our industry models," said Martinelli, adding that Medtronic, St. Jude and Boston Scientific stocks were all trading up in the wake of the rule.