What happened

Shares of Glaukos (GKOS 2.17%) were sinking 14.7% as of 3:28 p.m. EDT on Tuesday. The decline came after Wells Fargo analyst Larry Biegelsen downgraded the stock to an underweight rating from equal weight. Biegelsen also set a $41 price target for Glaukos, nearly 19% below its closing price on Monday.

So what

This isn't the first recent downgrade for Glaukos. Last week, William Blair downgraded the healthcare stock to market perform from market outperform. 

A person wearing a sportscoat giving a thumbs-down.

Image source: Getty Images.

Wall Street's increased pessimism about Glaukos stems from concerns about the proposed physician fee schedule for fiscal year 2022 established by the Centers for Medicare and Medicaid Services (CMS). The proposed changes could drastically cut the amount of reimbursement that the company receives from Medicare for glaucoma surgical procedures using its iStent device. 

Now what

Glaukos still has a sliver of hope that the CMS fee schedule could be changed. There's a public comment period that closes on Sept. 13. CMS is expected to announce its final fee schedule by November with the changes taking effect on Jan. 1, 2022. Look for the company's management to provide an update in its second-quarter conference call scheduled for Aug. 5.