Inspire Medical Systems, Inc. Announces Recommendation by Medicare Panel to Increase Payments for Inspire Therapy to Ambulatory Surgical Centers

Rhea-AI Summary

Inspire Medical Systems (NYSE: INSP) announced a favorable recommendation from a CMS panel to increase reimbursement for its obstructive sleep apnea procedures in Ambulatory Surgical Centers (ASCs). The CMS panel unanimously supported resetting the device offset rate to 85.71%, reversing a proposed reduction to $17,500 from nearly $25,000. This decision contrasts with a hospital reimbursement increase to over $30,000. The final reimbursement rates are anticipated to be published later in 2021 and effective January 1, 2022.

Positive

• Unanimous CMS panel recommendation to increase reimbursement rates for Inspire procedures in ASCs.
• Resetting of the device offset rate to 85.71%, improving financial prospects for the procedure.
• Expected increase in hospital reimbursement to over $30,000, enhancing overall revenue potential.

Negative

• None.

MINNEAPOLIS, Aug. 30, 2021 (GLOBE NEWSWIRE) -- Inspire Medical Systems, Inc. (NYSE: INSP) (“Inspire”), a medical technology company focused on the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea, announced today that a Centers for Medicare and Medicaid Services (CMS) panel has unanimously approved a recommendation to increase the previously proposed reimbursement for Inspire procedure performed in Ambulatory Surgical Centers (ASCs) as indicated on the CMS website as posted today.

Following U.S. Food and Drug Administration approval in 2014, reimbursement for Inspire therapy was determined by the American Medical Association’s (AMA) Current Procedural Technology (CPT) code panel, which concluded in 2016 that the procedure should be conducted under CPT code 64568, the same code utilized for the procedure to implant a vagus nerve stimulator (VNS) to treat epilepsy, with an add-on code (CPT 0466T) for the sensing lead.

Last year, the AMA panel created a new category I CPT code for the Inspire procedure (CPT 645X1), which will go into effect on January 1, 2022. In July 2021, CMS issued proposed rules for the new CPT code which, if implemented, would have significantly reduce the reimbursement for Inspire procedures in an ASC to approximately $17,500, representing a $7,000 reduction from the current code 64568. On the contrary, the hospital reimbursement for the new code proposed a 3% increase to just over $30,000.

In determining the reimbursement rates under the proposed rules, CMS defaulted to a device offset rate of 31%, rather than retain the existing offset rate of 85.71% that was previously applied prior to the CPT code split from VNS. The device offset is generally the device-related portion of the relevant procedure code under the Healthcare Common Procedure Coding System (HCPCS). The result of this proposed change by CMS reduced the payment for the Inspire procedure from nearly $25,000 to approximately $17,500.

On August 23, 2021, CMS convened the advisory panel on hospital outpatient payment to review several considerations, including ambulatory payment classifications for multiple device types. Inspire presented historical patient data for Inspire therapy at the advisory panel meeting.

The panel voted unanimously, with no abstentions, to recommend to CMS that it reset the device offset rate to 85.71%. The panel also unanimously recommended that there be no multiple procedure discounting, or at least that any applied discounting policy be consistent with that applied to other devices.

CMS will review the panel’s recommendations, and the final rules will be published later in 2021. The reimbursement rates are expected to go into effect on January 1, 2022.

About Inspire Medical Systems
Inspire is a medical technology company focused on the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea. Inspire’s proprietary Inspire therapy is the first and only FDA-approved neurostimulation technology that provides a safe and effective treatment for moderate to severe obstructive sleep apnea.

For additional information about Inspire, please visit www.inspiresleep.com.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-looking statements, including without limitation the expected reimbursement rates for Inspire procedures. In some cases, you can identify forward-looking statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expect,’’ ‘‘plan,’’ ‘‘anticipate,’’ ‘‘could,’’ “future,” “outlook,” “guidance,” ‘‘intend,’’ ‘‘target,’’ ‘‘project,’’ ‘‘contemplate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘predict,’’ ‘‘potential,’’ ‘‘continue,’’ or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.

These forward-looking statements are based on management’s current expectations and involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Other important factors that could cause actual results, performance or achievements to differ materially from those contemplated in this press release can be found under the captions “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations“ in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC, and as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investors page of our website at www.inspiresleep.com. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, unless required by applicable law, we disclaim any obligation to do so, even if subsequent events cause our views to change. Thus, one should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor and Media Contact:
Bob Yedid
LifeSci Advisors
bob@lifesciadvisors.com
646-597-6989

FAQ

What did the CMS panel recommend for Inspire Medical Systems' reimbursement rates?

The CMS panel unanimously recommended increasing the reimbursement rates for Inspire procedures in Ambulatory Surgical Centers.

How much was the proposed reimbursement reduction for Inspire procedures?

The proposed reimbursement reduction for Inspire procedures was approximately $7,000, lowering it to $17,500.

When will the new reimbursement rates for Inspire procedures take effect?

The new reimbursement rates for Inspire procedures are expected to go into effect on January 1, 2022.

What is the new CPT code for Inspire procedures?

The new CPT code for Inspire procedures is CPT 645X1, which will be effective starting January 1, 2022.

How does the CMS panel's decision impact Inspire Medical Systems stock?

The CMS panel's decision to reset the device offset rate positively impacts Inspire Medical Systems' potential revenue and stock performance.