The Centers for Medicare & Medicaid Services is proposing to cut the reimbursement rate for treatment with the Impella heart pump made by Abiomed (NSDQ:ABMD) but is adding coverage for use of the pump in both chambers of the heart, the company said today in a regulatory filing.
The federal health insurer last week released draft hospital payment levels for fiscal year 2018 slated to begin in October. The proposal, for treatment using the Impella pump under various scenarios, would cut 3 of the 4 categories, 1 by nearly -34%.*
But CMS also proposed to cover biventricular implantation of the Impella device, CEO Michael Minogue told MassDevice.com today.
“If you blend it all in, [the biventricular implant coverage] is all new, so that is significantly higher than anything we had,” Minogue explained during a telephone interview. “The net effect is the overall coverage of Impella went up.”
The proposed rule is open for public comment until June 13 and is due to be released in August.
“Abiomed is reviewing the detailed data within the tables and will be discussing the appropriate [diagnostic related group] rates with CMS during the open comment period to confirm it accurately reflects the hospital resources required to treat these very ill patients,” the company said in the filing.
To us, Minogue stressed that the CMS proposal does not take into account any of Abiomed’s Impella data.
Here’s a look at the proposed changes for all hospitals in the Medicare & Medicaid systems:
|Proposed FY ’18 rate||% change|
|Impella assistance in catheterization lab only||$57,460||$57,622||0.4%|
|Impella implant with care after catheterization lab||$95,971||$63,487||-33.9%|
|ICU care and removal of Impella, after transfer from outlying hospital||$37,564||$39,474||5.1%|
Abiomed said its model for the effect of the proposed changes, based on 100 sites that use the Impella device, shows that the rate for Impella with after-care would be cut by -34.8%:
|Procedure||Current rate (100 Impella sites)||Proposed FY ’18 rate||% change|
|Impella assistance in catheterization lab only||$70,299||$69,455||-1.2%|
|Impella implant with care after catheterization lab||$117,413||$76,525||-34.8%|
|ICU care and removal of Impella, after transfer from outlying hospital||$45,957||$47,580||3.5%|
Leerink Partners analyst Danielle Antalffy, writing in a note to investors today, said that the news is not as dire as it’s likely to be perceived on Wall Street.
“This rate cut may ultimately be less bad than feared, as it does not reflect any Impella claims, thus likely reflecting a lower cost run-rate than that post-October 2016,” Antalffy wrote. “To us, a proposed rate cut does not change the fundamental growth story for ABMD, which is a monopoly addressing a highly underpenetrated market opportunity with a critical unmet need.”
Antalffy also cited the biventricular pacing coverage as a positive for the company, adding that the proposal’s coverage of transfer from an outlying hospital valdiate’s Abiomed’s “hub-and-spoke” model, “better motivating hospitals to send critical patients to an Impella center.”
ABMD shares closed down -0.7% at $124.61 apiece April 14; the stock was trading at $119.82 per share in mid-morning activity today, down -3.8%.
* This article originally mis-calculated the percentage changes for the covered procedures. ↩