MASSDEVICE ON CALL — The Centers for Medicare & Medicaid Services are proposing to raise payments for acute care and some key medical devices including pacemakers and implantable heart pumps.

Medicare said it wants to boost the rates for covering acute care and long-term care, by about 0.8% for acute care and 1.1% for long-term care, The Hill reports.

The new rates would take effect in October, when the federal government’s 2014 fiscal year begins, according to the website.

Medicare also proposed to increase reimbursement for several medical technologies, including implantable cardiac defibrillators, atrial fibrillation ablation and left ventricular-assist devices. For ICDs, the reimbursement rate would increase by about 6.4%, with AF ablation rates rising 2.6% but reimbursement for LVADs falling 0.8%.

"For LVADs, the category has alternated between large increases and decreases over the past few years – +5.7% in ’11, -6.5% in ’12, +11.4% in ’13 – so we don’t view the decrease in ’14 rates as having a major impact on Thoratec (NSDQ:THOR) (OP) or HeartWare International (NSDQ:HTWR) (OP)," wrote Leerink Swann analyst Danielle Antalffy in a note to investors yesterday ."While we view the low- to mid-single-digit y/y reimbursement increases favorably, we expect that medtech companies overall will continue to face pricing pressure for the foreseeable future as providers look to squeeze device manufacturers in their quest to reduce costs. We expect CMS to release final IPPS reimbursement rates for FY2014 in August, but like past years don’t expect any major changes from the proposed rates. However, the ultimate impact to medical device pricing is difficult to ascertain as the correlation between CMS coding updates and overall pricing is not necessarily a 1- to-1 trend."

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