Abiomed shares down on proposed CMS reimbursement change

Abiomed (NSDQ:ABMD) shares have fallen slightly today after the Centers for Medicare and Medicaid Services released a proposal covering changes in its reimbursement.

The proposed rule would result in an approximately 24% cut to the reimbursement rates for certain procedures with its Impella heart pump, according to a Leerink Partners report.

“This rate cut may ultimately be less bad than heard, with CMS also proposing a ~35% cut for FY2018 last spring, which ultimately resulted in just a ~19% cut in the final rule,” Leerink Partner Danielle Antalffy wrote in their letter to investors.

CMS also proposed a change to the coding for procedures using the Impella, which would result in simplified logistics, but could also result in a slightly higher reimbursement rate for certain procedures, according to the report.

Despite the changes, Leerink was still bullish on Abiomed.

“To us, a proposed rate cut does not derail the fundamental ABMD growth story, which is a monopoly addressing a highly under penetrated market opportunity with a critical unmet need,” Antalffy wrote.

Antalffy went on to state the they expect that Abiomed to work with CMS to reduce the rate cut to less than the proposed 24%.

“It’s important to note that CMS calculates rates based on actual claims data, with an open comment period meant to flesh out nuances in the procedure costs. ABMD pointed out to us that several times in the document, CMS noted that additional claims data is necessary to make changes to DRG215. We’re inclined to believe — much like last year — that while a cut to 215 is likely, it’ll likely be much less severe than the current proposed ~24% rate,” Antalffy wrote.

So far today, Abiomed has seen a slight drop in share value, down 1.3% at $287.28 as of 10:23 a.m. EDT.

Earlier this month, Abiomed said that it won CE Mark approval in the European Union for its Impella 5.5 heart pump, saying that the first patient in Europe has already been treated with the device.

The post Abiomed shares down on proposed CMS reimbursement change appeared first on MassDevice.

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