The Centers for Medicare & Medicaid Services last night released an updated rule for reimbursement of home hemodialysis treatment that wasn’t much of an update at all.
"This likely comes as no surprise to investors, and the status quo is likely already largely reflected in NXTM shares and consensus estimates," Leerink Swann analyst Danielle Antalffy wrote in a note to investors. "Still, we had hoped that CMS might at least make some minor improvements in home hemo reimbursement, potentially through higher training payments and/or more specific criteria as to which patients are deemed medically justifiable for extra treatments per week."
The stagnant decision may decrease investor confidence in meaningful return in the short or medium term, Antalffy noted, but NxStage’s 20% projected growth through 2015 already takes into account a stationary reimbursement environment.
In addition, the comment period on the CMS ruling runs through August, so a change may yet be implemented.
Last month health insurance and technology giant Aetna modified its policy on NxStage’s System One home hemo system, finally dubbing the device “medically necessary” rather than “experimental,” a move that some suggested may body well for future Medicare decisions.
"Longer term, we continue to believe that CMS will eventually implement automatic payment for more frequent home hemodialysis, which would drive upside to our nearly 20% projected 2010-2015 System One sales growth CAGR and could drive an inflection point in home hemo adoption," Antalffy wrote.
NSTM shares jumped 2.9% today, trading at $17.04 as of about 1:00 p.m.
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