Cardio Diagnostics Holdings, Inc. (CDIO) received final CMS gapfill payment rates for its two AI‑powered cardiovascular tests, Epi+Gen CHD™ and PrecisionCHD™, on December 3 2025. The new national rate of $854 per test, effective January 1 2026, represents a more than 140% increase over the preliminary rates of $350 and $684.76, respectively, and will apply to all Medicare claims filed after the effective date.
The jump in reimbursement is significant for a company that has struggled with negative margins and a market capitalization of just $5.3 million. While the higher rate could lift revenue for Medicare beneficiaries, the company’s financial challenges—evidenced by a 90% year‑to‑date decline in its stock and a high beta of 6.03—mean that the impact will depend on the volume of tests performed and the company’s ability to manage costs. The new rate also signals CMS’s confidence in the clinical utility of the tests, potentially easing adoption by providers and payers.
Cardio Diagnostics’ tests entered the CMS payment system through the gapfill process, which is used when no comparable existing test exists for cross‑walking. Medicare Administrative Contractors developed local payment amounts for the tests, and CMS set the national rate based on the median of those amounts. The tests were assigned proprietary CPT Laboratory Analysis (PLA) codes 0439U and 0440U on April 1 2024, a prerequisite for billing and reimbursement. The gapfill process underscores the novelty of the AI diagnostics and the regulatory milestone achieved.
Despite the positive reimbursement news, the company remains in a precarious financial position. Its market cap of $5.3 million and a 90% decline in share price reflect investor concerns about its negative margins and high volatility. The new payment rate offers a potential revenue boost, but the company must still navigate significant operating costs and scale its test deployment to realize meaningful financial improvement.
CEO Meesha Dogan emphasized the strategic importance of the CMS decision: “Obtaining the final rate is a significant step in our efforts to expand access to our advanced cardiovascular tests for Medicare beneficiaries.” The announcement positions Cardio Diagnostics to better serve a population in which cardiovascular disease remains the leading cause of death, with over 700,000 U.S. deaths in 2022 and more than 370,000 attributed to coronary heart disease. However, the company faces competition from other AI‑driven diagnostic providers and must continue to demonstrate clinical value to maintain and grow its market share.
The final payment rate also aligns with broader healthcare trends toward value‑based care and the integration of AI in diagnostics. By securing a higher reimbursement, Cardio Diagnostics strengthens its case for broader payer coverage and positions itself to capture a larger share of the Medicare market, provided it can scale its operations and manage the financial headwinds that currently challenge the company.
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