AI History You Can Use: CMS Challenged to Capture Novel Technology in RVUs (Case Studies 2010, 2020)

When Medicare Meets Novel Hardware: 

CardioNet, iRhythm, and the Recurring Problem of Pricing Proprietary Inputs

Executive Summary:

CardioNet 2010 and iRhythm 2020 show a recurring Medicare pricing problem: breakthrough monitoring technologies often rely on proprietary, vertically integrated components that do not have clear market-clearing prices. 

In both cases, CMS hesitated to set national RVU-based payment when the key direct practice-expense input was hard to validate—first a telemetry monitor and later the SD339 Zio patch. The result was delayed national pricing, reliance on (unstable!) contractor rates, and prolonged disputes over invoices and the obscure corners of CMS PE methodology. The broader lesson is that Medicare’s standardized fee schedule fits commoditized inputs but crashes against one-off, service-embedded technologies.

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CardioNet vintage 2007-2008 remains one of the best examples of how a seemingly booming medtech story can run headlong into the internal logic of Medicare pricing. On the surface, the company looked almost ideal. It had an FDA-cleared product, rising sales, growing physician adoption, Medicare coverage, and eventually dedicated Category I CPT codes for mobile cardiovascular telemetry. Its patient-worn sensor and handheld monitor sent ECG data to a remote monitoring center, and its business ramp looked impressive: revenue rose from $73.0 million in 2007 to $120.5 million in 2008, with MCOT revenue of $100.2 million, or 83.2% of total revenue. Its 2008 IPO raised about $81 million.[1]

That is what made the reimbursement shock so dramatic. For the technical component, CPT 93229, Medicare did not initially set a uniform national Part B rate. Instead, the code was carrier-priced, and Highmark Medicare Services posted a rate of $1,123 in early 2009.[2] 

But carrier local pricing may be unstable.  Next the floor dropped. Highmark cut the payment to $754, effective September 1, 2009, and CardioNet described the change as roughly a 33% reduction with material adverse effects on the business.[3] Because commercial payors were already looking to Medicare as a benchmark, the Medicare cut threatened to spread beyond Medicare itself.

Bruce Quinn has a recollection that helps explain why the new number became so sticky. Highmark’s local medical director had apparently noted that CMS had already cross-walked the service in the hospital outpatient setting to an ambulatory payment amount of about $753; once that number existed elsewhere inside Medicare, it became easy to defend the local carrier rate as “Medicare-like,” even if it was only a rough analogy (B. Quinn, pers. comm.). That captures something important. These pricing crises do not always begin with an explicit policy manifesto. Sometimes they begin because a contractor spots a nearby number elsewhere in Medicare’s own machinery and decides it is good enough.

CardioNet’s core problem was that national CPT recognition did not automatically produce a favorable national fee schedule price. CMS did not establish a national payment amount for 93229 for 2010, leaving the code on contractor pricing for another year.[4] 

When CMS finally addressed the code in the 2011 physician fee schedule process, the real dispute came into view. Commenters wanted CMS to treat a broader centralized monitoring infrastructure as direct practice expense, but CMS refused. CMS said that, for 93229, the only equipment item appropriately treated as a direct PE input was the cardiac telemetry monitoring device worn by the patient; the software and hardware, workstation, webserver, and call-recording system were treated as indirect costs instead.[5]

That leads to the deeper lesson in the CardioNet story. The valuation problem was not just that the service was new. The problem was that its most important physical input was a proprietary device inside a vertically integrated business model. As Bruce Quinn has noted, CMS had reason to be skeptical if the “price” of the telemetry monitor was really an internal company transfer value rather than an open-market price (B. Quinn, pers. comm.). That is where the Medicare PE system becomes uncomfortable. It handles standardized, externally priced inputs reasonably well: an MRI scanner, a microscope, a reagent, a surgical supply with a visible invoice trail. It is much less comfortable when the crucial input is a one-off novel device used inside a service company that largely makes, ships, processes, and interprets the product itself. In that setting, CMS is being asked to trust a price that may look more like an internal accounting construct than a market-clearing price.  (In this case, the invoice price exceeded $20,000).

Not surprisingly, the result was that CMS finally set a national price for 93229 in 2011 at only about $739, close to the prevailing contractor price rather than a return to the earlier economics.[3][5] In other words, CardioNet got national pricing, but only after the premium economics had already been broken:

In the final price-setting, CMS granted about $23,000 as the invoice device price, with a 3-year life, and allotted about $1118 per use (nominal dollars before budget neutrality discounts).

Same Problem, Ten Years Later

What makes this story especially interesting is that the same basic problem reappeared more than a decade later with iRhythm Zio. The code was different, the form factor was different, but the institutional problem was strikingly similar. For CPT 93247, the key direct PE driver was not a capital monitor but a disposable supply, SD339, the extended external ECG patch. CMS explained in the 2023 final rule that it had struggled for multiple years to determine an acceptable national price for SD339. At first CMS rejected certain invoices from the clinical-study marketplace because it “typically require[s] an invoice representative of commercial market pricing” to establish a national price for a new supply or equipment item.[8] CMS initially used a proxy supply price, then in the CY 2021 final rule left 93241, 93243, 93245, and 93247 on contractor pricing because of conflicting information and the need for more pricing data.[8]

That did not end the matter. In the CY 2022 cycle, CMS received ten invoices and finalized an updated SD339 price of $200.15, with invoice values ranging from $179.80 to $241.99, but still declined to establish national pricing for the code family for 2022.[8] CMS said it wanted broader feedback before nationalizing payment.[8] 

Then, for CY 2023, CMS received additional invoices and settled on $315 as a price for SD339, altough the net payment was around $250 after budget neutrality adjustments.[8]

CMS’s path is revealing because it sounds so much like the old CardioNet problem. Commenters argued that the independent diagnostic testing facility model did not fit comfortably within the traditional physician-office PE methodology, and pointed to costs tied to R&D, AI, and software-as-a-service. CMS’s response was measured but unmistakable: yes, more comprehensive PE data might be useful, but the current methodology is the current methodology, and pricing still turns on the sort of invoice-based evidence CMS can use within that framework.[8] What CardioNet had illustrated in 2010, iRhythm replayed in 2021–2022: when the code depends on a novel, proprietary, vertically integrated input, Medicare hesitates.

Putting the Puzzle Together

That is why the iRhythm episode should be read not as an isolated dispute, but as a mirror of the CardioNet experience. The physical object changed. In CardioNet, the troublesome PE input was the telemetry monitor and its surrounding infrastructure. In iRhythm, it was the disposable patch, SD339. But the logic was the same. CMS was being asked to assign national RVUs to a service whose key input did not look like a standard, commoditized, transparently priced medical article. Instead, it looked like a novel component embedded in an integrated service company. The agency’s reflex in both cases was similar: ask for invoices, reject weak proxies or nonrepresentative evidence, strip out indirect and enterprise-level cost arguments, and delay national pricing until the direct PE input had a price it trusted.

This is more than a coding curiosity. It reflects a recurring collision in Medicare policy between innovative technologies and standardized pricing systems. Medicare’s PE methodology was built to handle routine, decomposable, office-based economics. It works best when the service relies on inputs with relatively visible market prices. It works less elegantly when innovation comes packaged as a vertically integrated service platform with one-off physical components, proprietary software, and internalized logistics. That is why a Medtronic device sold into a distributed market may fit the system more readily than a CardioNet or iRhythm service, where manufacturing, monitoring, processing, and interpretation may all sit under one corporate roof.

Seen that way, CardioNet and iRhythm are not just two remote-cardiology episodes separated by a decade. They are variations on the same Medicare puzzle. Both involved highly innovative monitoring technologies. Both involved direct PE inputs that looked unusually expensive or hard to verify. Both forced CMS to decide whether a novel physical component had a real market price or only an asserted one. And in both cases CMS moved slowly, cautiously, and skeptically. The lesson is not that Medicare opposes innovation. It is that the most innovative products often fit worst into fee schedules designed around standardized, openly priced inputs. CardioNet showed that in 2010. iRhythm showed, all over again, that the lesson still applied in 2021–2022.

References

[1] SEC registration statement for CardioNet, showing 2007–2008 revenue growth and IPO context.
https://www.sec.gov/Archives/edgar/data/1113784/000104746908002538/a2179762zs-1a.htm

[2] CardioNet announcement regarding posted Highmark reimbursement rate for CPT 93229.
https://www.biospace.com/cardionet-inc-announces-that-b-highmark-medicare-services-b-posts-reimbursement-rate-for-cpt-code-93229-mobile-cardiovascular-telemetry-services

[3] CardioNet Form 10-K discussing the reduction of 93229 reimbursement from $1,123.07 to $754 and later national pricing at $739.
https://www.sec.gov/Archives/edgar/data/1113784/000104746912001348/a2207476z10-k.htm

[4] CardioNet update on CMS not establishing a national reimbursement rate for 2010 for mobile cardiovascular telemetry.
https://www.dicardiology.com/content/cardionet-provides-update-mobile-cardiovascular-telemetry-reimbursement

[5] CY 2011 Physician Fee Schedule final rule, discussing CPT 93229 and direct versus indirect practice expense inputs.
https://www.federalregister.gov/documents/2010/11/29/2010-27969/medicare-program-payment-policies-under-the-physician-fee-schedule-and-other-revisions-to-part-b-for

[6] Philadelphia Inquirer article on the market shock around CardioNet reimbursement concerns.
https://www.inquirer.com/philly/blogs/inq-phillydeals/Was_analyst_forced_out_for_being_right_about_CardioNet.html

[7] Philips announcement of the BioTelemetry acquisition, valuing the company at about $2.8 billion.
https://www.philips.com/a-w/about/news/archive/standard/news/press/2020/20201218-philips-to-become-a-global-leader-in-patient-care-management-solutions-for-the-hospital-and-the-home-through-the-acquisition-of-biotelemetry-inc.html

[8] CY 2023 Physician Fee Schedule final rule, discussing SD339 invoice evidence, contractor pricing in 2021–2022, and final national pricing in 2023 for 93241/93243/93245/93247.
https://www.federalregister.gov/documents/2022/11/18/2022-23873/medicare-and-medicaid-programs-cy-2023-payment-policies-under-the-physician-fee-schedule-and-other

AI History You Can Use: The Strange RVU Deflation of Practice Expense

 Abstract (75 words). Medicare physician payment looks straightforward: work RVUs, malpractice RVUs, and practice expense RVUs. But practice expense contains a quiet and consequential twist. CMS begins with visible direct inputs—clinical labor, supplies, and equipment—and then adds indirect overhead, yet the final PE RVU often ends up materially lower than those listed costs suggest. The reason is a set of internal scaling and budget-neutrality adjustments. This essay explains that hidden shrinkage and why it affects nearly every CPT code.

The Hidden Shrinkage Inside Medicare Practice Expense RVUs

Everyone in Medicare policy eventually learns the basic catechism of the physician fee schedule. A payment rate is built from work RVUs, practice expense RVUs, and malpractice RVUs. Work is intuitive enough: it reflects physician time, effort, skill, and stress. Malpractice is the smallest and most straightforward component. Practice expense, by contrast, looks simple at first and then becomes strangely elusive. It appears to rest on three visible building blocks—clinical labor, supplies, and equipment—and yet, when you trace many codes from those listed inputs to the final practice expense RVU, the answer often comes out materially lower than a naïve dollar-for-dollar calculation would suggest. That is not a mistake. It is a feature of the system. (1)(2)

CMS and MedPAC both describe the fee schedule as a relative value system, not a literal cost reimbursement system. MedPAC summarizes the three RVU components and notes that practice expense reflects the costs of maintaining a practice, including supplies, equipment, and nonphysician staff. CMS’s practice expense methodology report is even more explicit: direct PE for each procedure is built from clinical staff, equipment, and supplies, and those direct inputs are then run through a multi-step allocation method. (1)(2)

That is where the mystery begins. Suppose a service has accepted direct inputs of $20 clinical labor, $20 supplies, and $20 equipment, for a visible total of $60. If one assumes, just for convenience, a conversion factor of $30, the simple expectation would be 2.0 RVUs. But that is not how Medicare practice expense works. CMS does not simply total the direct inputs and divide by the conversion factor. Instead, it first creates a direct PE pool for the entire fee schedule, then rescales the direct inputs across all services so that the aggregate direct practice expense fits that pool. In CMS’s own step-by-step description, Step 4 is to calculate a “direct PE scaling adjustment” and apply it to each service’s direct costs. (2)

That scaling step is easy to miss, but it is fundamental. CMS says the direct inputs are scaled so that aggregate direct PE RVUs equal the direct PE RVU pool, while preserving the relative relationship between services. In other words, Medicare is not promising that a service with $60 of listed direct inputs will emerge with PE RVUs equivalent to $60. It is promising only that the service will keep its relative position within a nationally budgeted practice expense system. (2)

Then comes indirect practice expense, which makes the story even less transparent. CMS allocates indirect PE using specialty survey data and service-level allocators based on direct PE RVUs, clinical labor PE RVUs, and work RVUs. For most services, the indirect allocator formula includes both direct PE and work RVUs. For some technical or low-work services, clinical labor can substitute for work when it is greater. CMS also applies an indirect PE adjustment so that aggregate indirect allocations do not exceed the available indirect PE pool. So the visible trio of labor, supplies, and equipment is only the beginning. The code is also being marked up for overhead through a separate indirect-expense methodology. (2)

And yet—this is the fascinating part—even after that indirect-expense upweighting, the final PE RVU can still be lower than the visible direct-input total would suggest. CMS’s final step is bluntly labeled: “Add the direct PE RVUs… to the indirect PE RVUs… and apply the final PE budget neutrality (BN) adjustment.” CMS says this final PE budget-neutrality adjustment is calculated by comparing the sum of direct and indirect PE RVUs to proposed aggregate work RVUs scaled by the current PE-to-work ratio. That final step is the quiet shrinkage mechanism. It is not usually described in plain English as a “deflator,” but that is how it behaves. (2)

So return to the toy example. A code has $60 in direct practice expense inputs. One might expect that to become 2.0 PE RVUs at a $30 conversion factor. In reality, Medicare first rescales the direct inputs, then allocates indirect overhead, then applies a final PE budget-neutrality adjustment. The result might be something like 1.5 PE RVUs, equivalent to $45, even though that $45 already includes some share of indirect expense. That is the paradox that makes the policy so hard to see: the code is first marked up for overhead and then, at the system level, compressed back down. (2)

This happens because practice expense is governed by pools, not by isolated code-level arithmetic. CMS calculates aggregate direct and indirect PE pools and makes the code-level values fit those pools. The agency is preserving internal relativity across the fee schedule, not reimbursing each service’s nominal listed inputs dollar for dollar. Put differently, PE RVUs are relative values constrained by a national budget framework, not a pass-through invoice for labor, tubing, gauze, and amortized equipment. (2)

One reason this topic is so confusing is that there are actually two different kinds of budget neutrality in the physician fee schedule. MedPAC explains that when work RVUs change enough to trigger the statutory threshold, CMS generally makes those changes budget neutral through the conversion factor. But changes in practice expense RVUs do not generally change the conversion factor; instead, they are made budget neutral by adjusting PE RVUs up or down for other services. That is the distinction many people miss. The global conversion-factor controversy and the internal PE compression are related ideas, but they are not the same mechanism. (3)

CMS’s own public documentation can actually deepen the confusion. On the fee-schedule documentation page, CMS still shows a visible “Budget Neutrality Adjustor” for 2007 and 2008, but lists it as N/A for 2009–2025 in the payment formula display. Read casually, that looks as if budget neutrality disappeared. It did not. What changed is that, under MIPPA, CMS stopped applying that older separate work-RVU budget-neutrality adjustor in the same way and instead applied it through the conversion factor. CMS said so explicitly in 2008: MIPPA required that a prior separate budget-neutrality adjustment to work RVUs be applied instead to the conversion factor. That historical change helps explain why policy people can search the CMS files and come away thinking the adjustor vanished, when in fact PE still has its own internal scaling and budget-neutrality machinery. (4)

There is another wrinkle. The PE methodology still depends heavily on old empirical infrastructure. In the 2026 proposed physician fee schedule, CMS said that PE methodology continues to rely primarily on the AMA’s 2008 Physician Practice Information survey, and that updated survey efforts submitted in 2025 were not being adopted for 2026 because of concerns about sample size, response rates, representativeness, and data quality. That means PE values are not only scaled and redistributed; they are also built on an aging empirical foundation. This adds to the sense, familiar to many policy wonks, that practice expense is partly cost-based and partly a highly managed artifact of pool mechanics. (5)

So what should one call the hidden shrinkage? CMS does not give it one tidy popular label. Instead, the effect is spread across the phrases direct PE scaling adjustment, indirect PE adjustment, and final PE budget neutrality adjustment. But in plain English, the phenomenon is simple enough: the listed practice expense inputs for a code are not the final payment value of the technical component. They are raw ingredients that are scaled, allocated, and then normalized to fit the overall PE structure of the physician fee schedule. That is why a service with visible practice expense inputs of $60 can end up with PE RVUs worth only $45. And that is why this seemingly nerdy topic is actually rather interesting: it reveals that Medicare’s technical component is not a direct cost-accounting exercise at all, but a national relativity system hiding behind the reassuring vocabulary of minutes, supplies, and equipment. (2)

Endnotes

(1) MedPAC, Physician and Other Health Professional Services Payment System 2025.
https://www.medpac.gov/wp-content/uploads/2024/10/MedPAC_Payment_Basics_25_Physician_FINAL_SEC.pdf

(2) CMS / RAND, Practice Expense Methodology and Data Collection Research and Analysis: Interim Phase II Report.
https://www.cms.gov/files/document/cy-2021-pfs-practice-expense-methodology-and-data-collection-research-and-analysis-report.pdf

(3) MedPAC, Report to the Congress: Medicare and the Health Care Delivery System, June 2025, Chapter 1.
https://www.medpac.gov/wp-content/uploads/2025/06/Jun25_Ch1_MedPAC_Report_To_Congress_SEC.pdf

(4) CMS, Physician Fee Schedule Search: Documentation and Files.
https://www.cms.gov/medicare/physician-fee-schedule/search/documentation

(5) CMS, Calendar Year 2026 Medicare Physician Fee Schedule Proposed Rule (CMS-1832-P) Fact Sheet.
https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-pfs-proposed-rule-cms-1832-p

 

AI History You Can Use: Pricing Novel Technologies in RVUs - Case Studies 2010, 2020

CardioNet is one of those odd but revealing Medicare stories that sounds a little nerdy at first and then becomes genuinely suspenseful. On paper, it looked like a model growth company. It had an FDA-cleared product, strong sales, broad physician adoption, Medicare coverage, and the prestige boost of dedicated Category I CPT codes for mobile cardiovascular telemetry, effective January 1, 2009. Its patient-worn sensor and handheld wireless monitor let ECG data move continuously to a remote monitoring center, and the company’s finances looked like a classic medtech ramp: revenue rose from $73.0 million in 2007 to $120.5 million in 2008, with MCOT revenue of $100.2 million, or 83.2% of total revenue. Its March 2008 IPO raised about $81 million.[1] (SEC)

That is why the reimbursement crisis hit with such force. For the technical component, CPT 93229, Medicare did not initially set a national Part B price. Instead, the code was carrier-priced, with Highmark Medicare Services setting the amount on CMS’s behalf. In 2009, Highmark posted a rate of $1,123.07, which gave the company and investors every reason to think the Medicare economics would support continued growth. CardioNet itself presented that amount as the current technical reimbursement rate and linked it to its growth prospects.[2] (SEC)

Then came the first big break in the story. In 2009, Highmark reduced the Medicare reimbursement rate for MCOT to $754, effective September 1, 2009. CardioNet repeatedly described this as roughly a 33% reduction, and said the cut would have material adverse effects on the business. The company also made clear why this was not merely a Medicare bookkeeping problem: commercial payors had already begun pulling their own prices toward Medicare benchmarks, first toward the earlier $1,123.07 level and then, potentially, lower still. In 2009, CardioNet’s total revenue still rose to $140.6 million, but the old margin structure was broken.[3] (SEC)

One detail helps make the famous $754 number more intelligible. As Bruce Quinn has recalled, Highmark’s local medical director had noticed that CMS had already cross-walked the service on the hospital outpatient side to an ambulatory payment amount of about $753; once that number existed in another part of Medicare’s machinery, it became an easy local carrier benchmark to defend, even if it was analytically crude (B. Quinn, pers. comm.). That anecdote fits the broader documentary record very well. CMS later noted that the contractor’s price for CPT 93229 had “recently been reduced” in the area where most billings occurred, and the agency’s eventual national payment came in “close to the current typical contractor’s price.”[4] (Federal Register)

The market shock was severe because the company had looked so promising only months earlier. Local reporting from the Philadelphia Inquirer captured the drama: analyst Brian Kennedy warned in spring 2009 that Medicare reimbursement was likely to fall, management pushed back, and then the feared reduction arrived. The company that had seemed like a premium wireless-cardiology growth story suddenly looked like a reimbursement-dependent company with a cracked business model. That tone matches the company’s own disclosures in 2010, which emphasize restructuring, cost reductions, and operational stress after the rate cut.[5] (SEC)

The next twist was that CardioNet did get its national CPT code status, but not the quick national price reset it wanted. In late 2009, CMS did not establish a national reimbursement rate for 2010, leaving CPT 93229 still carrier-priced by Highmark. CardioNet publicly expressed disappointment, pointing out that the service had already been used in hundreds of thousands of patients nationwide. So after the 2009 reimbursement blow, the company did not get immediate rescue from the national physician fee schedule. The locally reduced price remained the operative benchmark for another year.[6] (Federal Register)

When CMS finally turned to national pricing for 2011, the problem became even more interesting. In the 2011 physician fee schedule final rule, CMS walked through the dispute over the practice expense inputs for CPT 93229. Commenters wanted CMS to treat a larger centralized monitoring infrastructure as direct practice expense. CMS refused. It said that, for CPT 93229, the only equipment item appropriately treated as a direct PE input was the cardiac telemetry monitoring device worn by the patient. The other items—software and hardware, workstation, webserver, call-recording system—were treated as indirect practice costs instead. CMS also said it would not depart from its standard PE methodology to build a special valuation for this code.[4] (Federal Register)

That technical fight points to the second Bruce Quinn insight, which is likely central to why the process dragged. The patient telemetry monitor appears to have had no easy, open-market clearing price; instead, the company could point mainly to its own internal transfer or cost-of-goods figures, perhaps in the range of $1,000 to $2,000, while CMS could reasonably wonder whether the true manufacturing cost might be far lower (B. Quinn, pers. comm.). That matters because the RVU practice-expense method is much more comfortable with inputs that look like ordinary public prices—an MRI scanner, a microscope, a reagent—than with a proprietary device whose “price” is mostly an internal accounting construct. CMS’s own description of PE methodology emphasizes this bottom-up framework of direct costs based on standardized equipment, supplies, and labor inputs, which makes CardioNet’s vertically integrated device a poor fit.[4] (Federal Register)

The outcome was predictable once seen in that light. In November 2010, CMS established a national rate of $739 per service for MCOT, effective January 1, 2011—close to the current contractor price, not a restoration of the old premium economics. CardioNet later said its 2012 geographic rate would be about $734. This was national pricing, yes, but it was national pricing that largely ratified the lower reimbursement world rather than reversing it.[3][7] (SEC)

Meanwhile, the financial damage accumulated. CardioNet’s 2009 revenue increase masked the fact that reimbursement pressure was eating away at margins. The company restructured, consolidated facilities, shifted manufacturing, and kept looking for operational savings. Then came another layer of crisis: in 2011 the company received a Civil Investigative Demand from DOJ regarding Medicare billing practices, and it later recorded a $45.999 million goodwill impairment tied to deterioration in the patient-services business.[7] (SEC)

The eventual outcome was not extinction, but mutation. CardioNet diversified away from the pure MCOT reimbursement thesis, acquired adjacent businesses, and reorganized into BioTelemetry. Over time, that broader platform proved much more resilient than the original one-product growth story. By 2019, BioTelemetry had sales of $439 million, and in December 2020 Philips agreed to acquire it in a deal with an implied enterprise value of about $2.8 billion. Philips completed the acquisition in February 2021.[8] (Philips)

In retrospect, the puzzle is engaging precisely because it is so Medicare-specific. CardioNet did not collapse because its technology stopped working. It had FDA, sales, adoption, and code status. What changed was the meaning of the service inside Medicare payment logic. First, its local contractor moved the price from $1,123.07 to $754, apparently aided by the comfort of an outpatient benchmark around $753 (B. Quinn, pers. comm.). Then CMS, facing a proprietary device without a clean market-clearing price and unwilling to capitalize most of the centralized infrastructure as direct practice expense, nationalized the code at $739 rather than restoring the old premium. That is a weird history, but also a revealing one: sometimes a booming medtech story turns not on FDA, or sales, or even clinical utility, but on whether Medicare believes the crucial inputs have the right kind of price.[3][4][7] (SEC)

References

[1] SEC S-1/A, CardioNet, Inc.
https://www.sec.gov/Archives/edgar/data/1113784/000104746908002538/a2179762zs-1a.htm

[2] CardioNet press release on posted reimbursement rate for CPT 93229.
https://www.biospace.com/cardionet-inc-announces-that-b-highmark-medicare-services-b-posts-reimbursement-rate-for-cpt-code-93229-mobile-cardiovascular-telemetry-services

[3] CardioNet 2011 Form 10-K, discussing reduction to $754 and later $739 national rate.
https://www.sec.gov/Archives/edgar/data/1113784/000104746912001348/a2207476z10-k.htm

[4] Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011, Federal Register.
https://www.federalregister.gov/documents/2010/11/29/2010-27969/medicare-program-payment-policies-under-the-physician-fee-schedule-and-other-revisions-to-part-b-for

[5] Philadelphia Inquirer, “Was analyst forced out for being right about CardioNet?”
https://www.inquirer.com/philly/blogs/inq-phillydeals/Was_analyst_forced_out_for_being_right_about_CardioNet.html

[6] Diagnostic and Interventional Cardiology, “CardioNet Provides Update on Mobile Cardiovascular Telemetry Reimbursement.”
https://www.dicardiology.com/content/cardionet-provides-update-mobile-cardiovascular-telemetry-reimbursement

[7] SEC filing discussing CMS national rate and 2011 business impact.
https://content.edgar-online.com/ExternalLink/EDGAR/0001047469-11-001414.html?dest=A2202163ZEX-10_38_HTM&hash=a332e0f64207f6cc607f0a6991c063a61458e69b2009fefea8d69a82d68f7077

[8] Philips announcement of acquisition of BioTelemetry.
https://www.philips.com/a-w/about/news/archive/standard/news/press/2020/20201218-philips-to-become-a-global-leader-in-patient-care-management-solutions-for-the-hospital-and-the-home-through-the-acquisition-of-biotelemetry-inc.html

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SIDEBAR

Both Cardionet and iRhythm saw new codes that lagged several years in RVU pricing of PE.

For my records, Cardionet 93229 $759 represents a telemetry device EQ340, life 3 years, and capital cost $23,494.  Used 28880 minutes valued at $1118 per use.  (This is more than the total code price of $759 due to practice expense deflation factors that all pE pricing faces.)   Turning to iRhythm, 93247 $253.   The main valuation is supply (disposable) sD339 at $315.  note again the PE cost is higher than the total PE final value of $253.  By the way, 93247 is allowed a $1300 computer used 123 minutes for  paltry amortized 65 cents.   i can imagine why CMS was doubtful the Cardionet transmitter could cost $23494 and the little irhym patch for one lead ekg could cost $253.   

Yes — that comparison is very revealing, and it sharpens the parallel nicely.

What your records show is that both disputes turned on PE inputs that looked implausible or at least vulnerable to skepticism when viewed from CMS’s side.

For CardioNet 93229, the striking feature is that the key direct PE item was not some ordinary office supply but a telemetry device, EQ340, assigned a 3-year life and a capital cost of $23,494, with 28,880 minutes of use and a resulting assigned cost of about $1,118 per use. As you note, that is already well above the final code payment of $759, because PE values are later compressed by the usual PE allocators and deflators. But before one even gets to those deflators, a CMS analyst is staring at a very expensive proprietary device and asking the obvious question: is this really a market-clearing equipment cost, or is it an internal accounting construct?

For iRhythm 93247, the structure is different but the skepticism point is similar. The main PE driver is not capital equipment but a disposable supply, SD339, priced at about $315, even though the final PE-derived code value is only about $253. Again, CMS is being asked to accept that the central physical input to the service costs more than the eventual PE-derived code amount. And, as you note, the code also includes a computer priced around $1,300 used for 123 minutes, contributing only about $0.65 on an amortized basis — essentially trivial. So the real valuation hinge is SD339. That makes the dispute even more concentrated: if CMS doubts SD339, it doubts the whole pricing architecture.

Put bluntly, one can easily imagine the CMS reaction in both eras:

CardioNet: “You are telling us this little telemetry monitor effectively carries a $23,494 equipment cost?”  iRhythm: “You are telling us this one-lead adhesive patch effectively carries a $315 disposable cost?”

NOTE THAT - Those are not absurd on their face, but they are exactly the kind of inputs that trigger Medicare skepticism and delays when the pricing basis is proprietary, vertically integrated, or not clearly anchored in an open commercial market.

That is why your comparison is so good. The two cases differ in accounting category:

CardioNet: the contested PE driver is a capital equipment item.

iRhythm: the contested PE driver is a disposable supply item.

But economically, the disputes rhyme almost perfectly. In each case, the service’s RVU valuation depends heavily on a single proprietary physical input whose assigned price looks high relative to its apparent form factor and relative to ordinary medical-office intuitions. Once that happens, CMS’s instinct is to hesitate, ask for invoices, and avoid locking in a national price too quickly.

A crisp formulation for your records or blog would be:

CardioNet and iRhythm ran into the same Medicare nerve ending. In CardioNet, the problematic PE input was a telemetry device carried at $23,494 capital cost; in iRhythm, it was a disposable patch supply priced at $315. Different accounting buckets, same practical problem: CMS was asked to accept a high proprietary price for the key physical input to the service, and in both cases that invited skepticism and delay.

And an even punchier one:

CardioNet asked CMS to believe an expensive box. iRhythm asked CMS to believe an expensive sticker. In both cases, CMS blinked.

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Chat GPT reviews the November 2022 final PFS rulewhich set 93247 pricing at about $250 based on an SD339 $315 patich.

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Note how November 2022 rulemaking for CY2023 - on the several year delayed pricing of 93247 based on a $300 patch - note how this supports lessons learned in the earlier 2010 era Cardionet pricing. See PDF

Yes — this November 2022 / CY 2023 rulemaking strongly reinforces the lesson from the earlier CardioNet era.

What CMS says here is almost a case study in the same institutional reflex. For the iRhythm-related extended ECG codes, CMS explains that it did not receive a traditional invoice for SD339 at the outset, rejected higher-priced evidence such as clinical-study-marketplace invoices, and initially had only indirect or “top down” pricing approaches that yielded numbers in the $417–$440 range. 

Because of the conflicting information, CMS left the key codes, including 93247, on local contractor pricing in 2021. It then kept soliciting more invoice data, set SD339 at $200.15 in the CY 2022 final rule based on ten invoices, but still did not nationalize pricing for 2022.

Only in the CY 2023 rule did it propose and finalize national pricing after accumulating more invoice support, ultimately finalizing SD339 at $260.35.

That is very revealing, because it shows CMS behaving exactly as one would infer from the older CardioNet episode. The problem was not simply whether the technology worked. The problem was whether CMS had a market-anchored direct PE input price it trusted enough to nationalize the RVUs.

In the CardioNet period, the sticking point was a proprietary telemetry monitor and related infrastructure that did not fit comfortably into a standard physician-office PE framework. Here, the disputed item is not a capital monitor but a disposable patch, SD339. But the pattern is the same: CMS is skeptical of top-down cost analyses, resistant to including delivery, software, processing, overhead, or R&D in direct PE, and insists on invoice-based evidence tied to the specific physical input. CMS says that the commenters’ broader cost studies “do not fit easily within the framework of how our PE methodology operates,” because those analyses include indirect expenses and R&D, which CMS does not treat as direct PE.

In that sense, the iRhythm record is almost a lessons learned sequel to CardioNet. CardioNet taught that CMS gets uneasy when a code’s valuation depends on a proprietary input whose price is hard to verify in an open market. iRhythm shows that, more than a decade later, CMS still responds the same way: delay national pricing, force the parties back toward invoice-based evidence, strip out indirect and R&D costs, and only then settle on a national amount. The nouns changed — EQ340 then, SD339 now — but the grammar stayed the same. A proprietary key input with a debatable price will slow or stall PE-based national valuation.

Some links

https://investors.irhythmtech.com/news/news-details/2022/iRhythm-Technologies-Comments-on-the-Announcement-of-the-Medicare-Physician-Fee-Schedule-Final-Rule-Released-by-the-Centers-for-Medicare-and-Medicaid-Services-for-Calendar-Year-2023/default.aspx 

https://thecapitolforum.com/irhythm-cms-declines-new-pricing-for-ecg-monitoring-maintains-status-quo-pricing/

https://www.discoveriesinhealthpolicy.com/2020/08/cms-new-rules-rvu-system-facing-digital.html?m=1

https://www.discoveriesinhealthpolicy.com/2021/11/very-brief-blog-cms-publishes-final.html

A concise way to put it for your notes would be:

The CY 2023 iRhythm rulemaking confirms the old CardioNet lesson: when PE valuation turns on a proprietary physical input without a clean market price, CMS does not move quickly. It asks for invoices, rejects top-down enterprise cost models, strips out software and R&D, and may leave the code locally contractor-priced for years before nationalizing it.

AI History: Early History of Staining and of Medical Chemistry

In a paragraph or so each, describe some of the major events in the early history of medical histology, such as the invention of the H&E stain, the invention of the gram stain, the invention of the acid fast stain.
Then, also in about a paragraph each, describe the discovery of three early important chemical analysis in medical pathology, one of which will be the efficient way to measure glucose. Each of the events use specific years.

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[39 sec]

H&E 1870s

A major turning point in medical histology was the emergence of the hematoxylin and eosin stain (H&E) in the 1870s. Hematoxylin had begun entering microscopic work earlier: Wilhelm von Waldeyer described its use on animal tissue in 1863, and Franz Böhmer improved it in 1865 by combining it with a mordant, which made nuclear staining much more reliable. The second half of the pair came when Ernst Fischer described eosin as a histologic stain in 1876. In that same period, Wissowzky is generally credited with establishing the combined H&E method in 1876, creating the classic blue-purple nuclei and pink cytoplasm contrast that still anchors routine surgical pathology today. The importance of H&E was not just aesthetic: it made tissue architecture legible in a standardized way and helped turn microscopy into a dependable diagnostic discipline. (Hektoen International)

Gram 1880s

The Gram stain was another foundational invention, this time for microbiology and tissue pathology. Hans Christian Gram developed the method in 1882 while studying lung tissue from patients who had died of pneumonia, and he published the technique in 1884. Its power was that it did not merely color bacteria; it divided them into two broad biological groups, later called Gram-positive and Gram-negative, based on how their cell walls handled the stain and decolorization steps. That simple distinction rapidly became one of the first-line tools of diagnostic bacteriology and remains so today, because it gives an immediate and clinically useful first classification of organisms before culture or more advanced testing is available. (NCBI)

Acid Fast 1880s

The acid-fast stain, later known as the Ziehl-Neelsen stain, emerged directly from the early fight against tuberculosis. Paul Ehrlich described an early acid-fast method in 1882 after Robert Koch’s identification of the tubercle bacillus. The technique was then modified by Franz Ziehl and Friedrich Neelsen in the 1880s—sources commonly place the key refinements in 1883—producing the classic heated carbol-fuchsin method that allowed mycobacteria to remain brightly stained despite acid-alcohol decolorization. This was a major advance because ordinary stains often failed with these waxy organisms. In practice, the acid-fast stain became one of the earliest highly practical links between bacteriology and pathology, especially in tuberculosis diagnosis. (ScienceDirect)

Bence Jones Protein 1840s

In chemical pathology, one early landmark was the recognition of Bence Jones protein in urine. In 1847, Henry Bence Jones investigated an unusual urinary protein from a patient with what would later be recognized as multiple myeloma; he published the work in 1848. The striking behavior of the protein—precipitating on heating and then redissolving with further heating—made it a memorable and clinically useful test. This mattered historically because it was one of the earliest examples of a disease-associated chemical marker detected in body fluids, showing that laboratory chemistry could reveal the presence of a hidden internal disease rather than merely describe a gross symptom. (PMC)

Creatinine (Jaffe) 1880s

Another classic early chemical analysis was the Jaffé reaction for creatinine in 1886. Max Jaffé observed that creatinine reacted with alkaline picrate to form a red-orange color, and that observation became the basis for measuring creatinine in blood and urine. In the early 20th century, Otto Folin adapted the chemistry into a practical clinical laboratory method. Its importance is hard to overstate: creatinine measurement became central to estimating kidney function, and the Jaffé principle, despite known interferences, survived for well over a century because it was cheap, rapid, and easy to automate. It is a good example of a nineteenth-century bench observation becoming a twentieth-century routine pathology assay. (PMC)

Glucose 1919

For glucose, the key early efficient laboratory method was the Folin-Wu blood glucose method of 1919. Earlier urine sugar tests existed, but Folin and Hsien Wu developed a practical system for blood analysis that made glucose measurement more systematic and suitable for clinical laboratories. That was a major step toward modern chemical pathology because diabetes care required something more precise and scalable than bedside guesswork or crude urine testing alone. The Folin-Wu approach was later superseded by more specific enzymatic methods, and much later by the glucose oxidase era and the first Dextrostix strip in 1965, but 1919 is the key date for the early efficient blood-glucose method that helped make glucose a routine analyte in pathology laboratories. (Cambridge University Press & Assessment)

If you’d like, I can turn this into a chronological timeline table with year, person, method, and why it mattered.

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Here is a cleaner classroom-style timeline with the main items only.

Year	Person(s)	Method / discovery	Why it mattered
1863	Wilhelm von Waldeyer	Early histologic use of hematoxylin	Helped establish hematoxylin as a practical nuclear stain and laid groundwork for later routine tissue staining.
1875–1876	Ernst Fischer; Wissowzky	Introduction of eosin and early combined H&E stain	Created the classic contrast of dark nuclei and pink cytoplasm that became the standard stain of surgical pathology.
1882–1884	Hans Christian Gram	Gram stain	Gave medicine a fast way to separate bacteria into major groups, making early bacteriologic diagnosis far more practical.
1882–1883	Paul Ehrlich; Franz Ziehl; Friedrich Neelsen	Acid-fast stain / Ziehl-Neelsen stain	Made tuberculosis bacilli and related organisms visible despite their waxy cell walls, a major step in TB diagnosis.
1847–1848	Henry Bence Jones	Detection of Bence Jones protein in urine	One of the earliest important examples of a disease-specific chemical marker in laboratory medicine.
1886	Max Jaffé	Jaffé reaction for creatinine	Opened the way to routine chemical assessment of kidney function in blood and urine.
1919	Otto Folin and Hsien Wu	Efficient blood glucose assay	Made blood glucose measurement practical for routine clinical laboratories and later diabetes management.
1921–1922	Banting, Best, Macleod, Collip	Discovery and purification of insulin, guided by blood glucose testing	Glucose assays were crucial not only for treating diabetes after insulin arrived, but for proving that pancreatic extracts worked and for standardizing insulin itself.

##

Here is a polished prose handout version, with one paragraph for each major event:

In 1863, Wilhelm von Waldeyer helped establish the early use of hematoxylin in tissue microscopy. This was an important step because hematoxylin proved especially useful for staining cell nuclei, making the internal structure of tissues easier to study under the microscope. In the decades before standardized modern pathology, that was a major advance: it helped move histology from a rather crude visual art toward a more systematic laboratory science.

In 1875–1876, the addition of eosin and the development of the combined hematoxylin and eosin stain (H&E) created the most important routine stain in anatomic pathology. Hematoxylin stained nuclei a blue-purple color, while eosin stained cytoplasm and connective tissue pink. That contrast made tissue architecture far easier to interpret. Even today, H&E remains the basic stain of surgical pathology because it gives a rapid and highly informative overview of tissue structure.

In 1882, and then in publication in 1884, Hans Christian Gram introduced the Gram stain. This method was revolutionary because it did not simply color bacteria; it separated them into two major groups based on their staining behavior, later called Gram-positive and Gram-negative organisms. That distinction quickly became one of the most useful first steps in bacteriology, guiding diagnosis and treatment long before cultures or molecular tests were complete.

In 1882–1883, Paul Ehrlich, followed by Franz Ziehl and Friedrich Neelsen, developed the acid-fast stain, later known as the Ziehl-Neelsen stain. This stain was especially important for detecting tuberculosis bacilli, whose waxy cell walls made them difficult to visualize with ordinary stains. The acid-fast method therefore became one of the great early links between pathology and infectious disease diagnosis, especially in the era when tuberculosis was one of the world’s deadliest diseases.

In 1847–1848, Henry Bence Jones described an unusual urinary protein that later came to bear his name, the Bence Jones protein. This was one of the earliest important achievements in chemical pathology, because it showed that laboratory analysis of body fluids could reveal a specific disease process inside the body. In retrospect, it became a classic marker of plasma cell disorders such as multiple myeloma, but historically its importance was even broader: it showed that chemistry could become a diagnostic arm of medicine.

In 1886, Max Jaffé described the Jaffé reaction for creatinine, in which creatinine reacted with alkaline picrate to produce a colored compound. This became one of the foundational methods of chemical pathology because it made it possible to estimate creatinine in blood and urine, helping physicians assess kidney function. Although improved methods came later, the Jaffé approach remained influential for more than a century because it was practical, inexpensive, and adaptable to routine laboratory work.

In 1919, Otto Folin and Hsien Wu developed a practical blood glucose assay that made glucose measurement efficient enough for regular clinical laboratory use. This mattered enormously because diabetes could now be followed more accurately by blood chemistry rather than by crude bedside estimates or urine sugar alone. The glucose assay soon became one of the central tools of clinical pathology and remains one of the most important laboratory tests in all of medicine.

In 1921–1922, Banting, Best, Macleod, and Collip used blood glucose testing during the discovery and purification of insulin. This is a crucial historical point: glucose testing was not only important after insulin became a treatment, but was essential to proving that pancreatic extracts actually lowered blood sugar and therefore contained the active antidiabetic substance. In that sense, the blood glucose assay helped make one of the greatest therapeutic breakthroughs in modern medicine possible.

##

THE BACKLIST (Parody)

What follows is a parody of The Blacklist, the long-running James Spader  Netflix thriller in which a cultivated, dangerous, oddly charming mastermind presents the FBI with a secret list of criminals and insists on working through one young woman in particular. The series ran for a decade and became known for its mixture of murder mystery, conspiracy plotting, high-flown menace, and Spader’s unmistakably chilly performance style. Here the parody transfers the ominous machine from blood-spattered international crime to a better home for Spader - the absurdly overcivilized world of book publishing.

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THE BACKLIST

One-Page Series Treatment

Logline
When a polished, mysterious figure from the hidden world of publishing abruptly surrenders to authorities, he offers to expose an entire network of literary fraud, corruption, and career manipulation using a secret roster of names known as the Backlist. He will cooperate on one condition: he speaks only to a young editorial assistant no one expected to matter.

Premise
For generations, publishing has disguised itself as a civilized profession built on discernment, taste, and modest cardigans. But beneath that surface lies a far less innocent world: forged manuscripts, ghostwritten memoirs, estate warfare, reputational blackmail, and old grievances preserved with acid-free care.

At the center of the story is Sebastian Blackwell, an elegant and unnervingly self-possessed literary operator whose reputation hovers somewhere between kingmaker, fixer, and curated menace. Blackwell has spent decades shaping careers, reviving forgotten authors, suppressing dangerous papers, and understanding where the bodies are buried—sometimes literally in archives, more often figuratively in acknowledgments.

One day he turns himself in to a shadowy Interpol unit concerned with fraud and intellectual crimes and announces that he is ready to help. He possesses a list of names—editors, memoirists, agents, estate managers, biographers, scholars, dealers, and prize insiders—each connected to a hidden scandal in the respectable world of letters.

But Blackwell insists on dealing with only one person: Emma Vale, a bright, under-credited editorial assistant whose greatest professional gift is noticing what everyone above her has somehow agreed not to notice. Why he has chosen her is unknown. 

Tone and Style
The Backlist is a prestige thriller that treats publishing scandals with the gravity of international espionage. The world is one of old bookshops, rare manuscripts, discreet auction rooms, literary townhouses, inherited correspondence, and conversations so polite they barely conceal blackmail. The series plays its absurd premise completely straight, which is precisely what makes it funny.

Series Engine
Each episode centers on one name from the Backlist: a memoirist whose past has been assembled from other people’s notes, a revered editor who built a career on coercion, a literary executor weaponizing an archive, a prize committee quietly steered for years by one implacable figure. Blackwell guides Emma through this hidden machinery of prestige and deceit while revealing only fragments of his own agenda.

At the same time, a larger mystery unfolds: why did Blackwell surrender, why Emma, and is the Backlist truly a list of criminals—or simply a list of people Blackwell believes should be revised out of cultural history?

Why It Works
The series combines the narrative engine of a conspiracy drama with the exquisitely overfurnished world of literary culture. It offers intelligence, suspense, style, and the spectacle of people speaking about paperback rights and suppressed correspondence as though civilization itself hangs in the balance.

In short, what if the publishing industry were run exactly like an organized criminal network, but with better lighting and more tote bags?

Pilot

In the pilot, Blackwell walks into a federal office carrying a cloth bookstore bag and announces that he is prepared to discuss “the criminal afterlife of publishing.” He offers the first name on the Backlist: a beloved memoirist whose career rests on borrowed notebooks, stolen research, and a moving childhood that seems never to have happened.

Emma is brought in after Blackwell refuses to speak to anyone else. By episode’s end, one literary titan has fallen, Emma has been unwillingly promoted into danger, and Blackwell has revealed that the list is far stranger than anyone imagined.

“This,” he says, sliding across another page of names, “is only the trade edition.”

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To: Dana
From: Kyle, Development
Re: THE BACKLIST — summary for Wednesday acquisitions
Subject: I have now read it, and therefore you do not have to

Dana,

Per your request, below is a summary of the project currently known as THE BACKLIST, which the writer appears to regard as an entirely original premium dramatic concept and not, in any sense, a title-adjacent hallucination circling some other long-running network property like a hawk over a valet stand.

The premise, as submitted with complete conviction, concerns a mysterious, hyper-literate man named Sebastian Blackwell who abruptly surrenders himself to a vaguely federal publishing-related task force and offers to expose a hidden underworld of corruption, fraud, coercion, forgery, and reputation-laundering within the book industry. He claims to possess “a backlist,” meaning a secret roster of dangerous targets drawn from the worlds of trade publishing, literary estates, memoir fraud, weaponized blurbs, and out-of-print titles with explosive legal implications. He will cooperate only with one young woman, specifically an under-credentialed but intuitively gifted editorial assistant named Emma Vale, for reasons that are initially mysterious and later, even more mysterious.

So yes: structurally, tonally, and in the cadence of its central relationship, it is uncannily familiar, except that instead of international criminals we have embittered biographers, forged first editions, corrupted prize committees, copyrights scandals at Frankfurt, and a man who can apparently destroy careers by correctly identifying the provenance of an inscription on a 1963 galley copy. The script is written in a style I can only describe as “velvet panic.” Every line is delivered as though the fate of Western civilization depends on subsidiary rights in paperback reissue territories. There are long monologues about literary envy. Book jacket copy is edited with the tension of hostage negotiations. There is, and I am not exaggerating, a reveal framed with the gravity of a political assassination, except the underlying offense is prestige memoir embellishment.

And yet—and this is the difficult part—I regret to report that it is not completely insane. Or rather, it is insane in a disciplined way. The writer has committed so completely to the bit that the project begins to generate its own absurd legitimacy. One can, against one’s better judgment, imagine an audience for a show that treats publishing scandals as organized crime, particularly if cast with enough seriousness and photographed like a European conspiracy thriller. The central character is written as catnip for a certain kind of actor: omniscient, mannered, faintly amused, emotionally inaccessible, devastating with a pause. Emma, meanwhile, is less flamboyant but usefully grounded, which gives the piece a possible engine beyond the baroque speeches about first printings and moral rot in the galley process.

The problem, as I am sure will arise approximately four minutes into Wednesday’s meeting, is that the project’s “originality” exists in a state best described as aggressively deniable. Nobody in the material seems aware that an audience may notice the resemblance between “a notorious, cultivated mastermind with a secret list, who surrenders and insists on speaking only to a young female professional” and, well, something they may already have passively absorbed over ten seasons while folding laundry. 

The title does not help. In fact the title appears to stride into legal exposure with a smile and a scarf.

But perhaps this is less a plagiarism problem than a highly specific delusion in presentation. The material reads as though the writer discovered suspense television and the London Review of Books on the same weekend and concluded that no one had ever before combined charismatic menace with administrative paperwork.

My practical recommendation is: do not buy this as presented, but also do not dismiss it too quickly, because buried under the obvious issue is a possibly viable half-hour satire or limited series about the criminal psychology of prestige publishing. If someone could detach it from its current dead-serious mythology and lean into the absurdity, there may be something here.

I will present this professionally on Wednesday, although I need the record to reflect that there are some assignments in this job for which USC did not prepare me.

Best,
Kyle

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The Economist Humorous Guide to the Email Opening

 https://www.economist.com/business/2026/03/05/a-short-guide-to-email-opening-lines

A short guide to email opening lines

“I hope you are well” and other classics

Mar 5th 2026|3 min  THE ECONOMIST

If an alien were shown the typical first sentences of work emails, what might it conclude? Since so many messages start with the hope that the recipient is well, an extraterrestrial might at first assume that most humans are either recovering from illness or about to take to their sickbeds. But even if it were to realise that this was largely a matter of etiquette, it would miss the nuances of each opening gambit. Until now.

I hope you are well

Ostensible meaning: I hope you are well.
Actual meaning: None. It’s just throat-clearing. Do not write back and give the other person a bulletin on your health.

I hope this email finds you well.

Ostensible meaning: I hope you are well.
Actual meaning: I have not been in touch for a while and am not even sure you are in the same job. Plus I have a vague idea that this formulation makes me sound professional. Either way, I’m still totally uninterested in your health.

Hope all well.

Ostensible meaning: I hope you are well.
Actual meaning: We both know this sentence is totally formulaic, so I’m cutting it down to the bare minimum. If time is really pushed, I might say “Hope all OK”, and save myself two characters.

Nice to e-meet you.

Ostensible meaning: We’ve just been introduced by a third party and I’m pleased to make your acquaintance. 
Actual meaning: No email can substitute for an in-person encounter. Only when we have shaken hands and stared into the whites of each other’s eyes and taken the full measure of each other will we have properly met. I also send e-cards and shop on e-commerce sites and still think of Amazon as an e-tailer. I have clear memories of the 1980s.

Nice to “meet” you.

Ostensible meaning: We’ve just been introduced by a third party and I’m pleased to make your acquaintance.
Actual meaning: I’m an appalling pedant. I have clear memories of the 1970s.

I hope you had a good weekend.

Ostensible meaning: We’re both well-rounded individuals with fulfilling lives outside work. 
Actual meaning: It’s Monday morning and I cannot be bothered to write “I hope you are well” for the billionth time.

I hope your week is off to a good start.

See above, but it’s Monday afternoon.

I hope your week is going well.

It’s now Tuesday, Wednesday or Thursday.

I hope you have had a great week.

Guess what? It’s Friday.

I hope you’re having a great weekend.

See above, but I have no sense of work-life boundaries.

I hope this email isn’t interrupting anything urgent.

Ostensible meaning: I am respectful of your time.
Actual meaning: I have no idea how email works.

Apologies for sending you an out-of-the-blue email.

Ostensible meaning: This may look an awful lot like spam but is actually a message from a real person who appreciates how busy you are.
Actual meaning: This may look an awful lot like a message from a real person who values your time but it’s still spam.

I’m going to spare you the preamble and cut to the chase.

Ostensible meaning: You’re busy, I’m busy. Let’s behave like the professionals we are and get right down to business.  
Actual meaning: The expectations of a meaningless first sentence are so deeply embedded that I am going to spend as much time skipping the pleasantries as the pleasantries would have taken.    


Some emails do genuinely avoid the throat-clearing, and plunge straight in. There are several explanations for this. One is that the correspondents involved are in close contact: they know that the other person is well. Another is that the sender has worked out that the typical first sentence really is unnecessary. Another is that the writer dislikes the recipient but knows that putting “I hope you are unwell” would be taking things too far. Which is it? Even humans struggle to work that one out. ■