Business Context and Reporting Period
This Form 8-K is filed by Second Sight Medical Products, Inc. (not Vivani Medical, Inc.) on July 25, 2018. The report addresses Item 8.01 Other Events regarding the Centers for Medicare & Medicaid Services (CMS) proposed rule for Calendar Year (CY) 2019 payment rates for the company's Argus II retinal prosthesis system.
Key Financial Metrics and Proposed Rates
The filing details proposed national average payment rates for CY 2019 under the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment system:
- Argus II Device and Implantation (Hospital Outpatient): Proposed rate of $137,501 (CPT code 0100T assigned to APC 1906).
- Argus II Device and Implantation (ASC): Proposed rate of approximately $134,225.
- Initial Programming Services (CPT 0472T): Proposed hospital outpatient rate of $280.
- Reprogramming Services (CPT 0473T): Proposed hospital outpatient rate of $115.
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the company.
Material Changes Versus Prior Period
The proposed CY 2019 rates for both hospital outpatient and ASC settings represent an increase compared to the current CY 2018 payment rates. The proposed rates encompass both the Argus II device (HCPCS code C1841) and the surgical implantation procedure.
Guidance, Outlook, and Risks
Management Commentary and Next Steps: Second Sight intends to provide comments on the proposed rule to CMS in the coming months, alongside other stakeholders. The final rule and CY 2019 rates are expected to be released in November 2018 based on public comments and potential new 2017 data.
Risks and Contingencies:
- Proposed Status: This is a proposed rule published for public comment; no assurance can be made that the final rule will not differ substantially from the proposal.
- Scope Limitation: The rule affects Medicare payment to hospital outpatient departments and ASCs. It does not directly alter payments from Medicare Advantage, private U.S. health insurance, or non-U.S. business.
Investor Verification Checklist
- Verify the final CY 2019 payment rates upon the expected November 2018 release to confirm if they match the proposed increases.
- Assess the impact of the rate increase on the company's revenue mix, given that the rule does not cover private insurance or Medicare Advantage.
- Review the company's subsequent filings for any formal comments submitted to CMS regarding the proposed rule.
- Confirm the exact CY 2018 baseline rates to quantify the precise percentage increase in the proposed CY 2019 rates.