Business Context and Reporting Period
This Form 8-K was filed by Second Sight Medical Products, Inc. on July 14, 2017, reporting an event that occurred on July 13, 2017. The filing addresses the Centers for Medicare & Medicaid Services (CMS) proposed rule for the Calendar Year (CY) 2018 regarding payment rates for the Company's Argus II retinal prosthesis system.
Key Financial Metrics and Proposed Rates
The filing details proposed Medicare payment rates for CY 2018 under the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment systems. These rates cover both the Argus II device and the surgical implantation procedure.
- Proposed CY 2018 Hospital Outpatient Rate: Approximately $122,000.
- Proposed CY 2018 ASC Rate: Approximately $118,381.
- Previous CY 2017 Hospital Outpatient Rate: Approximately $150,000 (under APC 1906).
- Proposed Initial Programming Rate (CPT 0472T): $253.85.
- Proposed Reprogramming Rate (CPT 0473T): $111.72.
The filing text does not provide current revenue, profit, cash flow, margins, debt, or liquidity figures.
Material Changes Versus Prior Period
CMS proposes reassigning CPT code 0100T from Ambulatory Payment Classification (APC) 1906 to APC 1904. This reassignment results in a significant proposed reduction in the Medicare hospital outpatient payment rate from approximately $150,000 in 2017 to approximately $122,000 in 2018. The proposed ASC rate of $118,381 is also lower than the previous hospital outpatient rate.
Guidance, Outlook, and Risks
The Company intends to provide comments on the proposed rules to CMS in the coming months. The final rule is expected to be released around November 2017, contingent on public comments and new data. The filing explicitly states that no assurance can be made that the final rule will not differ substantially from the proposed rule. These proposed rates apply to Medicare hospital outpatient departments and ASCs but do not directly alter payments from Medicare Advantage, private U.S. health insurance, or non-U.S. business.
Investor Verification Checklist
- Verify the final CMS rule release in November 2017 to confirm if the proposed rate reductions become effective.
- Assess the impact of the proposed rate decrease (from ~$150,000 to ~$122,000) on the Company's revenue projections for CY 2018.
- Monitor the Company's official comments submitted to CMS regarding the reassignment of CPT code 0100T.
- Confirm whether the proposed rates for initial and reprogramming services ($253.85 and $111.72) are finalized.