The Centers for Medicare & Medicaid Services established new reimbursement codes for 3D breast tomosynthesis, slated to go into effect next year, providing a boon to Hologic (NSDQ:HOLX) and GE Healthcare (NYSE:GE), the other medtech maker with a 3D mammography system on the U.S. market.
The new CMS codes, released after the market’s close Oct. 31, sent HOLX shares up 1.5% to $26.58 apiece as of about 10 a.m. Eastern today.
The codes are add-ons to existing 2D mammography codes. The new rate for 3D screening mammography is $192, including the base $135 rate for a 2D mammogram plus a $57 add-on for 3D mammography. The codes also add $57 to the 2D unilateral and bilateral mammogram codes, making the 3D unilateral mammogram rate $187 and the 3D bilateral mammography rate $222.
"The availability of reimbursement for 3D mammography is yet another validation of the importance of this game-changing technology in the screening and detection of breast cancer," Hologic breast & skeletal health solutions president Peter Valenti III said in prepared remarks. "With the extensive body of published studies, including the landmark JAMA study, Hologic continues to lead the way in introducing superior 3D mammography worldwide."
"Hologic’s 3D mammography is currently the only FDA-approved system clinically proven to improve upon the accuracy of traditional mammography by significantly increasing the detection of invasive cancers, the cancers doctors worry about, while simultaneously reducing unnecessary callbacks," Valenti added. "As a result, we are seeing increasing demand from physicians and patients seeking the best option for screening and detection. Ultimately, we believe this reimbursement will benefit women and healthcare systems throughout the U.S. and we hope that the new Medicare payment rates will allow more women access to this potentially life-saving exam."
Leerink Partners analyst Richard Newitter said the news out of CMS is "an important first step toward securing reimbursement" in a note to investors this morning, noting that doctors polled as part of Leerink’s MedaCorp program indicated that a $20-$50 boost "would likely be considered sufficient to incentivize more economically sensitive radiologists/centers to adopt."
"[T]hus we think the $57 will be met with enthusiasm by the breast imaging community. So too should the fact that 3D tomo rates are incremental to existing 2D rates, as we believe the expectation was that 2D rates could get lowered (i.e., resulting in ‘zero sum’) with the establishment of a 3D rate," Newitter wrote. "This add-on payment value for 3D tomo in both the screening and diagnostic setting – without a corresponding decrease to 2D rates – may help drive prospective (and existing) tomo customers to more rapidly adopt/embrace the technology."
Hologic is slated to report its fiscal 4th-quarter results Nov. 5.
GE Healthcare won FDA approval for its SenoClaire 3D breast tomosynthesis imaging system last September.*