The Service Line

iRhythm closed its $287.5 million purchase of VitalConnect on October 5, putting the Zio heart-rhythm patch and a 30-day, multi-vital-sign wearable under one roof. iRhythm Holdings, which makes the Zio patch used for ambulatory electrocardiogram (ECG) monitoring, paid $237.5 million in cash plus up to 423,334 shares of its stock, and advanced VitalConnect $10 million in working capital between signing on August 5 and closing. VitalConnect brings mobile cardiac telemetry (MCT), the continuous, real-time-alerting tier of outpatient monitoring, plus a wearable that tracks up to 11 physiological parameters for up to 30 days. iRhythm says it will fold VitalConnect into its 2026 guidance on its November 5 earnings call and still targets a 15 percent adjusted earnings margin for 2027. For practices and independent diagnostic testing facilities billing the long-term ECG and MCT code families (93241 to 93248 and 93228 and 93229), this is a monitoring-vendor consolidation: fewer, larger suppliers means more leverage on per-study pricing and on which device your referral workflow defaults to. Confidence: High on the terms; Medium on any pricing effect, because neither company has disclosed customer overlap. iRhythm closing press release (SEC Form 8-K)

Reimbursement

The final heart-failure Ambulatory Specialty Model roster has 2,215 cardiologists, 395 fewer than February’s draft, but the American College of Cardiology says the wrong specialties are still on it. The Centers for Medicare and Medicaid Services (CMS) published the final participant list for the mandatory Ambulatory Specialty Model (ASM), which starts January 1, 2027 and runs through 2031, covering more than 5,550 clinicians across its heart-failure and low-back-pain tracks, with 2,215 in the heart-failure cohort and no additions beyond the preliminary list. The American College of Cardiology (ACC) says electrophysiologists, interventional cardiologists, and advanced heart-failure and transplant specialists, none of whom the model is meant to include, remain listed. CMS has proposed an exception process for wrongly listed specialties in the 2027 physician fee schedule proposed rule, but it is not final, and ACC says it will publish instructions once it is. Correction: our September 1 issue cited a roster of 2,600; that matches the February preliminary list, not the final one. Participants face Part B payment swings of up to 9 percent either way once scoring starts, so check your group’s names against the list now. Confidence: High on the counts; Medium on how fast the exception process finishes. ACC summary of the final ASM list · CMS Ambulatory Specialty Model page

The fiscal 2027 hospital inpatient rule took effect October 1 with new add-on payments for heart devices, and repeals the fast track that produced most of them. Of 11 cardiovascular applications under the New Technology Add-on Payment (NTAP) Alternative Pathway, which covers devices with the Food and Drug Administration’s Breakthrough designation, CMS approved seven, denied one (the CARA System), and three were withdrawn. CMS also repealed that Alternative Pathway for applications starting in 2028, over ACC objections, and moved the WiSE cardiac resynchronization therapy (CRT) implant from the standard pacemaker payment group to the leadless pacemaker group. Overall inpatient payment rises 2.3 percent. Hospital-owned cath lab and structural programs should rebase device-margin models now, because the add-on payment cushion for new technologies gets harder to win after this cycle. Confidence: High on the approval counts (ACC summary of the final rule); Medium on the margin effect for any single program. ACC summary of the FY2027 IPPS final rule

Enforcement

No new cardiology-specific Department of Justice or Office of Inspector General action surfaced this window. Searches of the Justice Department and HHS Office of Inspector General (OIG) found no new cardiology settlement, indictment, or audit report dated this week. The open threads from prior issues stand: OIG’s audit of Medicare Part B remote patient monitoring billing (OAS-25-05-008) still has no published results, and the monitoring code families in today’s lede are the ones that audit’s logic would reach. We will flag the report the day it posts.

Who’s Buying

Today’s deal is the lede: the monitoring vendor consolidation above is the only cardiology transaction we could confirm against a primary filing this week. No private-equity practice acquisition or payer cardiology partnership dated this window could be confirmed against a primary source. The earlier second-bite recapitalization thread (Cardiovascular Logistics, Cardiovascular Associates of America, US Heart and Vascular) continues without a new announced close.

Clinical Policy

Two new trials say sirolimus-coated balloons beat plain angioplasty for leg artery disease, which matters because CMS is proposing a 19.5 percent cut to drug-coated balloon angioplasty. At the VIVA 2026 meeting in Las Vegas on October 5, SELUTION4SFA (300 patients, Cordis’s Selution SLR balloon) reported 78.6 percent of patients free of repeat treatment and restenosis at one year versus 65.2 percent with an uncoated balloon, and 94.6 percent versus 85.3 percent free of target lesion revascularization. A SirPAD secondary analysis of 421 patients without tissue loss (Concept Medical’s MagicTouch balloon, also published in JACC) found one-year repeat revascularization of 17.0 percent versus 27.1 percent. Both trials were industry-funded, and the TCTMD report does not state either device’s US regulatory status. For vascular labs, the policy question is whether a payment cut lands just as sirolimus balloons gain evidence for a wider patient base. Confidence: High on the trial numbers; Low on US launch timing. TCTMD report on the VIVA 2026 sirolimus balloon studies

The Operator Metric

Model a 1.68 percent cut to the Medicare base rate: the proposed 2027 conversion factor is $32.84 for most cardiologists, down from $33.40. CMS’s proposed 2027 physician fee schedule sets the conversion factor, the dollar multiplier applied to every relative value unit, at $32.84 for clinicians outside qualifying alternative payment models and $33.17 for those inside them, down 1.68 percent and 1.19 percent from the current $33.40 and $33.57. ACC projects overall cardiology payment up about 1 percent on typical service mix, so the net depends on your mix of imaging, procedures, and visits. Last year’s final rule came out October 31, so this number could lock within weeks, just before the Transcatheter Cardiovascular Therapeutics meeting in San Diego (October 31 to November 3). Confidence: High on the proposed figures; Medium on the final. CMS fact sheet on the CY2027 physician fee schedule proposed rule