Medicare Rule Reduces Reimbursement Impact

Expect big changes in the way government reimburses for inpatient procedures starting October 1. The move looks to be a better fit with the medical device industry, who had fretted that an earlier proposal was too tough.

According to a MarketWatch story, the change to a cost-based system from a charge-based system would be phased in over three years.

The earlier proposal, issued in April, would have significantly cut reimbursement levels for medical devices like implantable defibrillators and drug-coated stents, and has weighed heavily on stocks in that sector this year. According to comments from CMS, companies and analysts late Tuesday, however, alterations to the final, 1,468-page rule resulted in a far more gentle approach.

The reimbursement changes wouldn’t necessarily bring a direct pricing impact to medical-device manufacturers, according to analysts. But there still has been broad investor concern that a squeeze on hospitals could send shock waves back up the supply chain.