CMS delays Medicare payment shift for remote patient monitoring

AstraZeneca’s reported offer, NSV’s fund close and Sequoia’s reorganization

The Centers for Medicare and Medicaid Services has delayed a proposed change that would have eliminated Medicare payment for remote-monitoring services delivered by third-party vendors. CMS cited concern about fraud in the industry as the agency considered limiting payment for services outside a medical practice.

Remote monitoring helps physicians keep tabs on patients between visits through connected devices such as blood-pressure cuffs. The industry took off during the pandemic and drew heavy venture investment.

In July, CMS proposed eliminating Medicare payment for remote-monitoring services from third-party vendors. The proposal would have limited reimbursement to cases in which a medical practice’s own staff provided the services.

CMS said Wednesday it would delay the change until Jan. 1, 2029. The postponement gives remote-monitoring companies time to propose to CMS measures that would curb fraud but maintain Medicare reimbursement for third-party services.

The uncertainty is unwelcome to remote-monitoring startups seeking venture capital. The Wall Street Journal reported that investors and acquirers will have the upper hand in negotiations until there is greater clarity about Medicare reimbursement.

Andrew Zengilowski, co-founder and chief executive of remote-care company CoachCare, said the best companies will adapt to any outcome. CoachCare has been acquiring companies in the sector. “If you can deliver clinical outcomes and reductions in total cost of care, there will be a payment model for your business,” he said.

Elsewhere in the same Venture Capital newsletter, AstraZeneca recently made a roughly $10 billion offer to buy Rhythm Pharmaceuticals, according to people familiar with the matter. The people said the U.K. pharmaceutical giant offered $124 a share last month. The deal would expand AstraZeneca’s portfolio of rare disease treatments, while Rhythm specializes in treatments for metabolic conditions and severe obesity.

Singapore-based venture-capital firm NSV announced Monday the first close of its inaugural institutional fund at 70 million Singapore dollars, equivalent to $54.8 million, exceeding its initial target. The fund seeks opportunities in breakthrough therapies and emerging technologies across the U.S. and Asia. Its backers include government-linked entities such as Taiwan’s National Development Fund and Singapore’s EDBI. NSV operates in Singapore, Taiwan and the U.S. and plans to draw on its network of advisers and venture partners to pursue emerging trends.

Sequoia Capital is closing its London office, merging its early-stage and growth investing teams and sunsetting two programs for fledgling startups, according to a social-media post Wednesday. Partner Pat Grady said at the WSJ Tech conference Wednesday that the reorganization was intended to help Sequoia partners move quickly and focus on what was essential. Grady, who was named co-steward last year along with fellow partner Alfred Lin, said the changes were designed to help Sequoia move quickly. “You can’t be agile if you have a million things going on all over the place,” Grady said.