Shares of ambulatory electrocardiogram monitoring device maker iRhythm Technologies (IRTC) - Get Report fell sharply after Medicare contractor Novitas updated reimbursement rates for coding related to iRhythm's ZioXT service.
While the new rates represent an increase from previous rates, iRhythm says it believes they don't appropriately reflect the clinical and economic value that long-term continuous electrocardiogram monitoring offers patients.
The company says that due to the cost of providing the service relative to the updated rates published by Novitas, it won't be able to provide its Zio XT service to the Medicare fee-for-service segment if rates remain the same.
iRhythm shares plunged 37.6% to $49.86 at last check in early morning trading Monday.
iRhythm responded to the changes saying that it is "disappointed" after Novitas published updated reimbursement rates for codes 93243 and 93247 at $103 and $115, respectively. The updated rates are retroactive to Jan. 1 and replace rates initially published on Jan. 29.
"We are extremely disappointed that Novitas did not reflect the appropriate clinical and economic value of long-term continuous ECG monitoring and Zio XT, which is evident to our commercial and direct bill customers who have negotiated pricing consistent with the AMA RUC recommendations," said CEO Mike Coyle.
iRhythm says it is preparing an operating plan to discontinue serving this Medicare segment with its ECG device that it had expected to begin implementing in the second quarter.
"Unfortunately, at these rates we will be unable to offer the Zio XT service to the Medicare fee for service segment,” Coyle said.