What happened

Shares of Silk Road Medical (SILK) were down more than 33% as of 12:30 p.m. on Wednesday after the Centers for Medicare & Medicaid Services (CMS) announced a proposed change that could affect Silk's revenue. The healthcare stock is down more than 58% this year.

So what

Silk Medical is a medical device maker that specializes in neurovascular diseases. The CMS said Tuesday it is is proposing to change coverage for a stroke treatment for carotid artery disease (CAD). Silk has a CAD therapy called transcarotid artery revascularization (TCAR). The CMS said it may put a competing CAD therapy, percutaneous transluminal angioplasty, which is done alongside stenting, on the same level as TCAR in regards to reimbursement.

By boosting a competitive method, the CMS move could hurt Silk's own sales. CAD is known as the silent killer because often the first symptom for a patient at risk of a stroke is a stroke or mini-stroke, called a transient ischemic attack.

Now what

The decision by the CMS was not completely unexpected, but it will likely be a drag on Silk's shares for a while.

Much of Silk's recent revenue growth is due to TCAR. In the first quarter, the company reported revenue of $40.1 million, up 43% year over year. It had an earnings per share (EPS) loss of $0.43, compared to an EPS loss of $0.48 in the same period last year.

The rule change is part of the CMS' proposed National Coverage Determination. J.P. Morgan analyst Robert Marcus downgraded Silk Road to neutral from overweight after the decision. Silk is still in a good position considering that one report by Research Nester puts the compound annual growth rate for the cardiovascular devices market at 7% through 2033 -- rising from a $55 billion market to a $90 billion market over the next decade, due to the increasing prevalence of cardiovascular diseases.