rhythm inventory increases by 33% after the CMS sets new replacement codes

Shares of iRhythm Technologies, a maker of cardiac arrhythmia monitors, rose 33% Tuesday after CMS proposed new permanent codes for long-term monitoring and recording of EKGs on its 2021 Medicare promotional fee bill.

• Speaking to analysts Tuesday afternoon to discuss a possible updated payment policy, Kevin King, iRhythm CEO, said the proposal is an appreciation of the significant clinical value of long-term continuous monitoring that results in rates of detection. Irregular heart rhythm in patients with heart disease.

• The creation of a permanent Class I code to replace the temporary codes iRhythm is using to replace Zio technology is expected to increase adoption of heart patches and fuel the company’s growth in 2021 and beyond, customers said Tuesday. William Blair analysts.

Thanks to its leaf biosensor device and AI-assisted data analysis, iRhythm offers a $ 2 billion market opportunity to detect cardiac arrhythmias, the company said in an investor presentation in June. A particular target is a large and growing population of asymptomatic atrial fibrillation patients with an increased risk of stroke if the disease goes undiagnosed.

Last September, iRhythm announced its partnership with Verily, a genetic science conference, to develop a technology that facilitates early detection of atr fibrillation, or AFib, a malignant tumor that affects more than 6 million people. million Americans.

The COVID-19 outbreak has reduced patient enrollment since mid-March, leading to an increase of about $ 2 million in the first 15 minutes, iRhythm said in June. The modest rebound began between late April and early May, but the company warned that demand could remain subdued for the rest of the year.

The effects of the CMS coding changes won’t be felt until 2021. King said Tuesday that the new codes and proposed fees represent an increase over the current Medicare service rate and should improve the willingness of physicians to adopt the technology. overtime.

National prices will also allow the company to renew Medicaid contracts and possibly bill the home registry, King added.

William Blair analysts estimate that the new codes will increase iRhythm’s replacement rate by approximately 6% compared to what the company received with the preliminary Class III code. “We believe that one of the key benefits of implementing Class I code may be the increased adoption and use of long-wear patches that could pose a barrier to growth in 2021 and beyond,” the analysts write.

CMS is expected to release the latest rule on the Medicare physician fee plan no later than December 1, after the public comment period. The rule takes effect on January 1.

San Francisco-based IRytmin will release its second-quarter financial results on Thursday.