The Centers for Medicare & Medicaid Services released its inpatient reimbursement rates yesterday, sparing hospitals from an $850 million haircut by leaving out a 0.8% cut to Medicare hospital payments.
The Medicare agency boosted the rate for a type of implantable heart pump called left ventricular assist device by 9.5%, a proposal CMS released in April to raise the LVAD reimbursement rate by 7.9%.
The government’s health insurance program boosted rates for a number of important cardiology and orthopedic procedures, including large joint replacements, spine surgery, pacemaker and defibrillator implantation and cardiac stenting.
The new rates are slated to go into effect Oct. 1.
Danielle Antalffy, an analyst at Leerink Swann, predicted that the final rules would affect 9 key medical device markets as follows:
- Prostatectomies: +11.8
- LVADs: +11.1%
- Atrial fibrillation ablation: +7.2%
- Hysterectomies: +5.4%
- Spine surgery: +3.6%
- Pacemaker implantations: +3.5%
- Large joint replacements (knee, hip): +2.8%
- ICD implantations: +2.1%
- Cardiac valves: +0.9%
Pricing pressures on medical device companies are likely to continue, even with the rate increases, Antalffy wrote in a note to investors.
"While we view the low- to mid-single-digit y/y reimbursement increases favorably, we expect that
med-tech 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," she wrote. "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."
American Hospital Assn. CEO Rich Umbdenstock said in prepared remarks that the cut would have been "detrimental for America’s seniors."
"Today’s rule will help hospitals maintain the resources necessary to continue providing services for the patients and communities they serve," Umbdenstock said.