Inspire Medical Systems (INSP) investor relations material

Strategic priorities and operational focus

• Emphasis on cost discipline and prioritization of spending to navigate top-line challenges while continuing to invest in revenue growth and product development.

• Focus on patient outcomes and product effectiveness, with new data supporting long-term cardiovascular health benefits.

• Positive persistence and adaptability are highlighted as key values, especially in response to external challenges such as coding changes and reimbursement issues.

• Expansion of the market access team and proactive education of centers to ensure proper coding and billing practices.

• Strategic reduction in DTC advertising spend and increased investment in field education to support long-term profitability.

Financial guidance and outlook

• Guidance was lowered due to a decline in prior authorization submissions, with Q2 expected to be the low point for the year and a 9%-11% top-line decline.

• Sequential revenue improvement is anticipated in Q3 and Q4, though year-over-year declines will persist.

• Recovery in revenue is expected, but not a return to double-digit growth rates in 2027; growth will build off a lower base as industry experience improves.

• Operating margin targets were reduced in line with revenue guidance, but Q1 bottom-line performance exceeded expectations.

Coding, reimbursement, and regulatory environment

• Coding changes, particularly the transition from CPT code 64568 to 64582 and the use of modifiers, have created confusion and slowed prior authorizations.

• Variability in coding requirements across MACs and states has led to inconsistent billing practices and a need for center-by-center education.

• A new CPT code for Inspire V has been submitted and discussed, with potential implementation as early as January 2028 if approved in the current cycle.

• The RUC committee will determine the valuation if the code is accepted, with a large pool of experienced surgeons supporting the process.