Shares of Abiomed (NSDQ:ABMD) rebounded nearly 8% today after the medical device company sought to reassure investors about proposed changes to Medicare reimbursement for its flagship Impella heart pump.
An analysts’ speculation on the effect of proposed new descriptions for Medicare reimbursement codes, slated to take effect in October 2014, sent share prices down nearly 19% last week.
After a meeting of a Centers for Medicare & Medicaid Services committee last week, Northland Capital Markets’ Suraj Kalia surmised that the planned updating of the definitions for reimbursement codes would cut the rate for treatment with the Impella device.
Danvers, Mass.-based Abiomed said yesterday that the CMS proposal for the new descriptions doesn’t mean any changes to the codes assigned to treatment with Impella, noting that the change to so-called ICD-10 coding system isn’t scheduled to take effect for more than a year.
"Based upon initial discussions with CMS, the proposed code changes are 1 element of the CMS process for the transition to ICD-10, which is designed to increase the specificity and accuracy of coding language (and is not unique to Impella). Furthermore, CMS has communicated that the transition to ICD-10 codes is not intended to result in DRG mapping changes or payment. Standard procedure for DRG assignment involves extensive analysis of cost data, not a change in description," Abiomed said in a regulatory filing.
In the wake of the Northland report, ABMD shares fell 18.6% from a $23.19 close Sept. 18 to an $18.88 finish yesterday.
But the stock opened up 2.1% today, at $19.20 apiece, and had climbed 9.5% to $20.68 by just after noon today – more than double Kalia’s $9 price target.