IRTC - iRhythm nears 6-month high as analysts cheer Medicare proposed rule

iRhythm Technologies ( NASDAQ: IRTC ) recorded the second biggest intraday gain for the year on Friday to reach the highest level since January on the release of proposed Medicare reimbursement rates for 2023, prompting favorable views from analysts.

The Medicare Physician Fee Schedule Proposed Rule for 2023 issued yesterday is relevant for iRhythm ( IRTC ) as the maker of electrocardiogram (ECG) monitoring products depends on CPT codes 93247 and 93243 for its Zio XT service.

Citing the proposed rates, Citi analysts led by Joanne Wuensch argued that the national rate for Zio XT stood at $245.69 compared to the $200.15 indicated last year, which, however, was not finalized for 2022.

With various geographic adjustments, the take-home rate for the company is likely even higher than the suggested rate, the analysts argued with a Neutral rating and a $43 per share target on iRhythm ( IRTC ).

Meanwhile, Truist points out that the $229 rate proposed for Zio XT came ahead of its assumption of ~$210. It should help remove a reimbursement overhang, the analysts led by David Rescott noted keeping their Buy rating and $165 per share target on the stock unchanged.

“We think investors in recent weeks were even potentially bracing for a rate lower than ~$230, and thus this rate level should serve as a clearing event,” the team wrote.

CMS is expected to announce its Final Rule by early November following a public comment period. In the 2022 final rule, CMS did not issue national pricing, the prices related to CPT codes 93247 and 93243 were determined regionally by relevant Medicare Administrative Contractors.

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