CMS announced that the U.S. Centers for Medicare & Medicaid Services will reclassify LivaNova’s VNS Therapy for drug‑resistant epilepsy under New Technology Ambulatory Payment Classification (APC) 1580 for new patient implants. The change, effective January 1, 2026, lifts outpatient payments by roughly 48% for new implants and 47% for end‑of‑service procedures compared with 2025 rates, reflecting CMS’s recognition of the therapy’s clinical value and the cost and complexity of the procedure.
The higher reimbursement rate improves the economics for hospitals and outpatient centers that perform VNS Therapy, reducing the gap between Medicare payments and the true cost of the implant. By making the procedure more financially viable, CMS is expected to broaden patient access and encourage wider adoption of the therapy across the U.S. health‑care system.
LivaNova’s Q3 2025 results underscored the positive impact of the regulatory change. The company reported earnings per share of $1.11 versus the consensus estimate of $0.92—a beat of $0.19 or 21%. Total revenue rose to $358 million, up 11% from the $342.7 million forecast, marking the seventh consecutive quarter of double‑digit growth. Management raised its 2024 revenue guidance, signaling confidence in continued momentum.
Stephanie Bolton, LivaNova’s President of Global Epilepsy, said, “We welcome CMS’s reimbursement increases for both new patient implants and end‑of‑service procedures. These actions are a milestone for the underserved drug‑resistant epilepsy community and will better support hospitals in offering VNS Therapy to eligible patients, driving expanded access and broader adoption.”
The neuromodulation segment, which includes VNS Therapy, remains LivaNova’s most profitable business line. The segment’s higher margins and growing market share offset the company’s lower‑margin cardiopulmonary operations, allowing LivaNova to focus resources on its core neuromodulation portfolio. The reimbursement increase further strengthens this strategic focus by enhancing the financial attractiveness of the neuromodulation offering.
The EPS beat was driven by disciplined cost management and operational leverage. Despite modest increases in raw material and labor costs, LivaNova maintained healthy gross margins through pricing power in its neuromodulation products and efficient supply‑chain execution. Revenue growth was largely fueled by strong demand in the neuromodulation segment, with the company capturing additional market share in the drug‑resistant epilepsy space and benefiting from the new reimbursement rates that lower the financial barrier for providers.
The guidance lift for 2024 reflects management’s expectation of sustained demand and the positive impact of the CMS decision. By raising revenue guidance, LivaNova signals confidence that the higher reimbursement will translate into increased utilization and revenue growth, while its focus on cost control and strategic investments positions the company to navigate potential headwinds such as cost inflation and competitive pressure.
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