Inspire Medical Stock (-19%): Medicare Reimbursement Reversal Jolts Investors

Inspire Medical Systems (INSP) plunged nearly 20% following the reversal of a key Medicare reimbursement code by two administrative contractors. The aggressive sell-off happened on heavy volume, erasing recent gains that were built on positive reimbursement news. But with analysts surprised by the abrupt policy shift, is this a fundamental blow or a temporary administrative hurdle creating a liquidity grab?

The core of the dramatic repricing stems from a sudden and unexpected reversal of a Medicare billing code. This directly impacts the reimbursement rates for Inspire’s sleep apnea device, creating uncertainty around future revenue growth.

• Two Medicare contractors, Noridian and CGS, removed CPT code 64568 for Inspire’s Gen 5 device.
• This reverts billing to the older CPT code 64582, which has a significantly lower reimbursement rate.
• The change negates a previously anticipated 50-60% increase in facility fees for 2026.

Trade Mechanics & Money Flow

Trade Mechanics: What Happened?

The mechanics of the move suggest a liquidation event driven by the negative headline, exacerbated by a notable short interest. The high volume indicates a rush for the exits by institutional holders.

• Trading volume surged to approximately $441.4 million.
• The stock gapped down at the open, indicating significant overnight selling pressure.
• Short interest was elevated at over 12% of the public float prior to the drop.

How Is The Money Flowing?

While the sell-off appears broad-based, the high institutional ownership suggests that the ‘Smart Money’ was caught off guard. The key question is whether this distribution will be followed by accumulation at lower levels.

• Institutional ownership is very high at over 90%.
• Recent filings show a mix of institutional buying and selling in the prior quarter.
• The stock broke below its 50-day and 200-day moving averages, indicating a technical breakdown.

Understanding trade mechanics, money flow, and price behavior can give you and edge. See more.

What Next?

FADE the initial panic. The reimbursement issue is a significant headwind, but analysts seem to view it as a resolvable administrative issue rather than a permanent impairment to the technology’s value proposition. Watch the $90 level. This represents a key psychological support level and a potential area of accumulation if the market begins to price in a favorable resolution to the reimbursement uncertainty. A break below this level could signal further downside.

That’s for now, but so much more goes into evaluating a stock from long-term investment perspective. We make it easy with our Investment Highlights

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