Business Context and Reporting Period
This Form 8-K was filed by Second Sight Medical Products, Inc. on November 5, 2017, reporting events occurring on November 1, 2017. The filing addresses the Centers for Medicare & Medicaid Services (CMS) final rule regarding payment rates for the Argus II Retinal Prosthesis System for Calendar Year 2018.
Key Financial Metrics and Rates
The filing details specific Medicare payment rates effective January 1, 2018, rather than corporate financial performance metrics like revenue or profit.
- Hospital Outpatient Rate (CY 2018): Approximately $122,500 for the Argus II system and surgical implantation.
- Ambulatory Surgical Center (ASC) Rate (CY 2018): Approximately $117,501 for the Argus II system and surgical implantation.
- Initial Programming Rate (CPT 0472T): $261.87.
- Reprogramming Rate (CPT 0473T): $115.17.
The filing text does not provide clear values for the company's total revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes Versus Prior Period
CMS reassigned CPT code 0100T from Ambulatory Payment Classification (APC) 1906 to APC 1904. This reassignment resulted in a decrease in the Medicare payment rate for the procedure from approximately $150,000 in 2017 to approximately $122,500 in 2018.
Outlook, Risks, and Management Commentary
The final rule affects payments to hospital outpatient departments and ambulatory surgical centers under the OPPS and ASC prospective payment systems for services rendered on or after January 1, 2018. The filing explicitly states that these rates do not directly alter payment from Medicare Advantage, private U.S. health insurance, or non-U.S. business. Management issued a press release regarding these finalized rates, which is attached as Exhibit 99.1.
Investor Verification Checklist
- Verify the impact of the $27,500 reduction in the hospital outpatient rate on projected 2018 revenue.
- Confirm the proportion of total Argus II sales volume attributed to Medicare OPPS and ASC payments versus private payers and international markets.
- Review the attached press release (Exhibit 99.1) for additional management commentary on the rate change.
- Assess whether the new programming and reprogramming rates ($261.87 and $115.17) are sufficient to cover service costs.