NEW YORK (AP) -- Shares of CardioNet Inc. surged Tuesday after the company said health insurer UnitedHealth will cover its heart monitoring devices.
THE SPARK: CardioNet said all UnitedHealth Group Inc. plans will start covering its products July 1. CardioNet's agreement with UnitedHealth starts on that day, and it applies to all UnitedHealth-affiliated companies, including Medicare and Medicaid plans UnitedHealth manages.
UnitedHealth is the largest U.S. health insurer and CardioNet said the agreement marks a big expansion in the availability of its products.
THE BIG PICTURE: CardioNet, of Conshohocken, Pa., makes wireless devices that allow a patient's heartbeat to be monitored at all times and at any location. That can speed up the treatment of problems such as abnormal heart rhythms.
Many of CardioNet's patients are Medicare beneficiaries, meaning Medicare covers part of the cost of the devices. The company says Medicare reimbursement rates have been declining for several years, and in turn commercial insurers have also sought lower reimbursement rates.
The company said its revenue fell 6 percent to $111.5 million in 2012 as product revenue and average reimbursement payments decreased.
CardioNet said in April that it will change its name to BioTelemetry Inc. and make changes to its corporate structure to increase its flexibility. Shareholders will vote on the changes at the company's annual meeting in July.
SHARE ACTION: CardioNet shares advanced $1.77, or 55.1 percent, to $4.98 in afternoon trading. Earlier the stock rose to $5.30, its highest price since July 2011.