Zoll Medical Corp.’s (NSDQ:ZOLL) stock plummeted 27 percent on news that its LifeVest defibrillator might get reduced Medicare reimbursement.
The company posted a booming quarter with a 23 percent bump in sales to $136 million, and a 67 percent jump in earnings to $9.5 million. The boom was driven by the LifeVest system which saw a huge boost, increasing 67 percent and raking in $30 million for the Chelmsford, Mass.-based company.
LifeVest is Zoll’s first reimbursed product, and the company’s recent 10-Q filing reported that a regional carrier of durable medical equipment issued draft revisions for Medicare coverage that recommended limited reimbursement for the LifeVest system.
The revisions are subject to public hearings and comments and the company is optimistic about the outcome of the hearings, but Wall Street wasn’t so sure.
Zoll’s shares dropped hard and fast to $44.58 in midday trading, a 27 percent drop from its close at $60.93 yesterday.