What happened

Shares of iRhythm Technologies (IRTC -1.13%) skyrocketed by 59% in Wednesday trading after the Centers for Medicare and Medicaid Services (CMS) released its Calendar Year 2022 Medicare Physician Fee Schedule (MPFS) Final Rule on Tuesday.

So what

The MPFS details the payment policies and rates for services provided to Medicare beneficiaries. iRhythm had hoped that CMS would establish national pricing as well as continued carrier pricing for several procedure codes related to external electrocardiogram (ECG) monitoring. These codes are used by healthcare providers to submit for payment for the company's Zio XT heart monitoring service.

CMS didn't fulfill iRhythm's wishes. But the healthcare stock surged regardless, because investors viewed the Final Rule as favorable to the company.

ECG heart monitoring chart.

Image source: Getty Images.

iRhythm Technologies President and CEO Quentin Blackford acknowledged the company's disappointment that the 2022 physician fee schedule didn't include national pricing. However, Blackford said that iRhythm is working with Medicare Administrative Contractors (MACs) to establish pricing for the relevant procedure codes. Blackford said that the company "believe[s] the Final Rule is potentially constructive in our conversations with the MACs. We will share updates at the appropriate time."

Now what

Investors will hear more from iRhythm about the CMS fee schedule during the company's third-quarter earnings call, which is scheduled for Thursday after the market close. Wall Street expects iRhythm to report quarterly revenue of $83.5 million and an adjusted loss of $1.10 per share in that update.