Q3 2021 iRhythm Technologies Inc Earnings Call
Good day and thank you for standing by welcome to the Eye Rhythm Technologies, Inc. Q3, 2021 earnings Conference call.
This time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand the conference over.
To your speaker today Leigh Salvo. Please go ahead.
Thank you all for participating in today's call.
Earlier today I rhythm released financial results for the third quarter ended September 32021, a.
A copy of the press release is available on the company's website.
Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Any statements contained in this call that are not statements of historical fact should be deemed to be forward looking statements.
All forward looking statements, including without limitation those statements related to the impact of COVID-19 on our business expectations for recovery and processing critical backlog market opportunity product performance market expansion and penetration productivity improvements reimbursement release of clinical data.
The operating trends and our future financial expectations, including revenue gross margins profitability and operating expenses are based upon our current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
Accordingly, you should not place undue reliance on these statements. In addition, we will refer to adjusted EBITDA, which is defined as EBITDA, excluding stock based compensation expense.
Adjusted EBITDA is a non-GAAP measure that is used to help investors understand I live in ongoing business performance for.
For a list and description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our most recent annual and quarterly reports on form.
Q, respectively with the SEC.
This conference call contains time sensitive information and is accurate only as of the live broadcast today November 4th 2021.
I really am disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise and with that I'll turn the call over to Quentin Blackford I was president and CEO.
Thanks Leigh good afternoon, and thank you all for joining us I'm excited to join you on my first earnings call as <unk>, President and CEO, Doug Devine, Our Chief Financial Officer, and Dan Wilson, Our EVP of corporate strategy are on the call with me as well.
Paired remarks today I will discuss what attracted me to hybrid my early observations and focus areas summarize our views of the current market environment provide an update on reimbursement and then Doug will cover a detailed review of our Q3 financial results and expectations for the remainder of the year.
As a reminder, I officially joined the company in early October.
First of all the things that I really am team for the warm welcome and assistance as I transition into the company.
I've been incredibly impressed with the passion of the organization the knowledge of the team and most importantly, the commitment and dedication to serving our patients and physician customers.
<unk> to be supported by a team that shares these common values my.
In my first few weeks for the team has validated my reasons for joining as I speak to you today I am even more excited about the opportunities ahead of us than it was four weeks ago and I would like to spend a few minutes discussing the things that attracted me to I rhythm.
First and foremost I'm personally motivated by the opportunity to change People's lives and have a positive impact on the individuals' health and wellbeing I've spent my entire career in healthcare and with companies that have patients at the center of everything they do.
It was clear to me in my diligence I went under corporate values start with a patient and it is deeply ingrained in the DNA of the company.
Second I see a highly valuable and highly differentiated technology platform and service that delivers real clinical and economic value to patients providers and the health care system. The.
The technology platform is built upon best in class sensing technology truly unique artificial intelligence and deep learning capabilities and a unique data set together creates a platform from which we can operate and expand from.
Related to that I see the potential to deliver sustainable differentiated growth for years to come.
Only approximately 20% penetrated in our core market today and have the opportunity to continue to capture more share and grow the overall market and expand our addressable market.
Our expansion into the silent AF market is a meaningful opportunity for the company and aligned with where I see the future of healthcare delivery.
Also excited about the international expansion and believe that we can improve the standard of care in international markets in the same way, we have done and continue to do so in the U S.
Longer term I believe there are many other possibilities to leverage our platform and expand into other markets and adjacencies.
And finally I was attracted by where I rhythm is in its lifecycle I admire what the company has done in its history. The innovation has brought to the market and the benchmark growth. The company has delivered over the last several years the opportunity for sustained growth is there and delivering on that will require that we transform our infrastructure and it's still an operational discipline throughout the organization.
I am confident that my experience at new basis, and at <unk> Com will be particularly relevant here is I see a lot of similarities to iridium in terms of the stages of growth the technology platform and the operational transformation, but those companies undertook.
Already see several areas of opportunity that we will begin to address share data with them to better position us to scale efficiently into the future.
Similar to prior companies I expect that as an organization, we will build a world class commercial and innovation capability, while being operationally excellent and how we run the company.
Yeah.
As I've come into the organization met with the teams and continue to learn the business I'm, even more confident in our future.
Done a deep dive in nearly every function reviewed our key strategies evaluate our operational focus areas and spend time on the ground with our operations teams in the field with some key accounts I've taken from that several observations that I will share with you.
First physicians and patients love the product and service that we deliver there has been a continual theme that our clinical differentiation is recognized in our dealer service is seen as a best in class.
Second there is a real opportunity to expand the service upstream and care pathways and into new specialties and use cases, we are seeing a real benefit in having a service utilized earlier in the patient's journey, which can lead to improved efficiencies for our cardiology and EP positions as well as where the patient and the health care system. Overall, there are also a number of us.
Specialties that have use cases for cardiac monitoring where we are seeing early success. This type of expansion will allow us to take more broadly around what we can do with our platform with a single call point.
Next I believe our competitive differentiation remains very strong with a continued focus on clinical evidence generation and educating our customers on our value proposition I believe we can continue to take share in the market for many years.
Our data platform and deep learning capability positioned to be on the leading edge of World class research and innovation with respect to predictive analytics and outcomes, allowing us the potential to meaningfully transform the health care landscape into the future, while reducing the cost of care.
And finally, the team has done a nice job of building out the ability to integrate within existing EHR systems of customer accounts, which is proving to be a differentiator for the company.
The ability to streamline workflow and create efficiencies within physician offices is one more differentiator that becomes a gateway to bring other offerings into these healthcare systems over time.
I am incredibly excited about the strength of the platform our service capabilities and the many opportunities of leverage I'm looking forward to sharing more of my observations and focus areas in the coming months.
Next I wanted to provide a summary of our third quarter business results and highlights.
Revenue during the third quarter was $85 $4 million, reflecting year over year growth of 19%.
Revenue growth was driven by continued penetration of <unk> in the U S <unk> and the UK continue to outpace overall company growth Volte.
Volume growth for <unk> remains very strong and importantly, we have shown the ability to grow revenue in spite of the Medicare pricing headwinds we have faced this year.
Doug will share more details on the financial results momentarily.
I'd also like to highlight a few important product and operational related milestones that occurred since our Q2 call. We recently surpassed two significant service delivery milestones, including serving 4 million patients in our history been amassing over 1 billion hours of curated ECG data.
This is a significant achievement and we are delighted to have the ability to positively impact these lives.
In October we announced the publication of in stops clinical outcomes data in the journal cost one.
The data, which was previously presented at the American Heart Association meeting in November 2020, with three year follow up data intended to assess whether screening asymptomatic individuals for atrial fibrillation and other arrhythmias can improve clinical outcomes.
The data demonstrated that active monitoring with zero and at risk populations can lead to positive patient health outcomes.
The company, we intend to lead the market in commercializing solutions that deliver proactive prevention earlier diagnosis and improved outcomes.
Within the U K, we continue to execute on the AI Award that we received a year ago and continue to make progress in building out our operational infrastructure there.
One year into the pilot program, we believe <unk> is demonstrating the value that it can bring to the NHS and the positive impact it can have on reducing wait times and hospital backlog.
And finally, turning to our product development efforts, we recently submitted our five 10-K application under our collaboration with Verily and now await feedback from the FDA.
Following clearance, we will be entering a limited market evaluation phase, which we expect to commence in late 2022 and continue into 2023.
As noted on our last call. This market evaluation phase will be focused on generating clinical evidence testing the service and technology and world World settings, and exploring the optimal business model.
We remain excited about the potential for bringing this new solution to market and we will take a thoughtful and measured approach to clinical evidence generation in order to inform optimal clinical practice.
As we close out 2021 and looked at 2022 I wanted to spend a minute sharing our views of the current market conditions and the demand for zero.
During the third quarter, we saw an uptick in COVID-19 driven by the Delta variant.
On its own this was not a major factor on our results in the quarter. However, we have seen a significant increase in staffing issues with our customers, which is having a negative impact on patient volumes and presenting patient scheduling challenges.
This is leading to capacity constraints at accounts and in the system and in some cases limiting our ability to open new accounts or expand within existing accounts, how and when these issues get resolved is difficult to predict but we believe the impact on our business will persist throughout the end of the year before potentially normalizing.
As an update on our extended turnaround times in the third quarter, we made tremendous progress working through our clinical backlog and working our turnaround times back to normal levels.
We remain at normalized turnaround times and believe we have the systems the people and the processes in place to meet demand it.
It is clear that in some situations the extended turnaround times created additional challenges for our customers on top of the staffing challenges they were facing.
Beginning in June and continuing through the third quarter, we were intentional about slowing. The addition of new accounts as we prioritize serving our existing customers, while we manage through our extended turnaround times.
We have now resumed full selling activities, we expect to see more measured growth in registration volumes in Q4, given the lower number of new accounts opened in Q3 and the staffing issues that our customers are facing Doug will provide more details with our guidance for the remainder of the year.
Now turning to reimbursement earlier this week CMS released the calendar year 2022, Medicare physician fee schedule final rule and accompanying agenda as it relates to the category one CPT codes for extended external ECG monitoring in the relevant codes for <unk> CMS did not issue national pricing and elected to continue.
With carrier pricing for the calendar year 2022.
While we are disappointed that national pricing was not included in the 2022 physician fee schedule. We're appreciative that CMS continues to engage with industry and other stakeholders to further their understanding of the cost components of AI based solutions, such as IRA them service National pricing remains the best option for all stakeholders given the categories now operating under permanent CPT cat.
Laurie one codes, we believe the final rule was a positive development towards national pricing, but also recognize there remains work to be done we will continue to engage with CMS through the rulemaking process next year for calendar year 2023 pricing.
As you are all aware I rhythm has been pursuing parallel path to support parents stable Medicare pricing for these category one CPT codes I rhythm remains engaged with the Max regarding an alternative costing model and has continued to work with industry participants to submit additional cost data for consideration.
We along with our industry coalition have made meaningful progress against this milestone. We are also evaluating the new information included in the final rule and its potential implications on our discussions with the Max out of respect for the process and to allow the Mac contractor medical directors to complete their own review processes. We will provide further updates when appropriate while we can.
Not provide certainty at this time on the potential outcome of the discussions with the Max on the timing of any action to be taken we continue to focus on supporting the Max to make fair and appropriate rate updates for calendar year 2022.
In closing, although we are disappointed that CMS did not issue national rates for long term ECG monitoring we've been actively planning for a scenario in which CMS decision, making continues into 2022. Thus we remain actively engaged with CMS and committed to ongoing discussions not only with CMS, but also with the Max and other coalition partners in pursuit of fair and approach.
Preet pricing I look forward to sharing more information regarding our efforts as updates become available I will now turn the call over to Doug to cover our detailed financial results before I provide my closing remarks.
Thanks Clinton.
Total revenue in the third quarter was $85 4 million, reflecting year over year growth of 19% and a sequential increase of five 1% over the second quarter.
Gross margins were 65, 7%.
Around eight 9% year on year, and two 3% quarter on quarter.
Adjusted EBITDA defined as EBITDA less stock based compensation expense was negative $8 7 million, a decrease of $23 $5 million year on year, and $4 1 million quarter on quarter.
Cash and short term investments were $256 8 million at quarter end up $1 1 million from Q2 'twenty one.
Taking a more detailed look at third quarter financial results revenues grew sequentially with quarter on quarter growth of five 1% and continued year on year growth of 18, 7%.
Reduction of the clinical processing backlog drove the majority of revenue growth in the third quarter.
As we were able to fully return to normal processing times by the end of the third quarter as compared to a backlog to normal processing time of approximately one week as of the end of the second quarter.
On a product level <unk> XT in the U S drove the majority majority of our volume related growth in the third quarter, while <unk> in the U S and <unk> in the UK outpaced overall company growth on a percentage basis.
New account onboarding decreased compared to the second quarter of 2021, as we deliberately delayed new account launches in the third quarter due to the extended turnaround times, we were experiencing.
Looking at new store same store mix, new store defined as accounts that have been open for less than 12 months accounted for 55% of year over year growth.
Up from 25% in the second quarter of 2021.
XT home enrollment was approximately 21% in the third quarter of 2021 flat from the second quarter of 2021.
Turning our attention to the rest of the P&L gross margin for the third quarter was 65, 7% a two 3% decrease compared to gross margin of 68% in Q2 of 2021.
The decrease was due to higher clinical costs associated with managing and reducing the clinical processing backlog and one time revenue benefits in the second quarter not reoccurring in the third quarter.
Operating expenses for the third quarter of 2021 were $79 4 million up nine 9% from Q2 of 'twenty one.
And up 35, 9% year over year.
The sequential increase in operating expenses was due to compensation and bad debt.
Second quarter bad debt expense and stock based compensation included one time reversals that were not representative of ongoing costs.
Comparing year on year, Opex Q3, 2021, Opex was up 35, 9% due primarily to hiring in legal spending offset by a decrease in stock based compensation.
Quarterly adjusted EBITDA of negative $8 7 million in Q3, 2021 was down $4 1 million.
Versus Q2, 2021, adjusted EBITDA of negative $4 6 million.
Cash and short term investments increased $1 1 million from second quarter of 2021 to $256 $8 million with improvements in working capital, partially offset by capital spending and repayment of long term debt.
Accounts receivable decreased by $10 6 million from $63 4 million in Q2, 2021 to $52 8 million in Q3 2021 as health claims returned to normal levels as of the end of Q3 dollars 21.
Accounts receivable is expected to continue to decline in Q4 as previously held claims are processed through the reimbursement cycle.
Finally, the net loss for the third quarter of 2021 was negative $23 7 million or a loss of <unk> 81 per share.
Compared with a loss of negative $4 7 million or <unk> 17 per share in the same period of the prior year.
Now turning to guidance.
For the full year 2021, we expect revenue to range from $317 million to $319 million representing year over year growth of approximately 20%.
We expect revenue in the fourth quarter 2021 to be sequentially down in the range of $76 million to $78 million due.
Due to customer staffing shortages as well as delays in new account onboarding and existing account expansions.
Due to the clinical operations backlog in the second and third quarters.
In addition, as previously noted.
We incurred a revenue benefit in the third quarter from the reduction of the clinical backlog that was present at the as of the end of the second quarter, which will not reoccur in the fourth quarter rent.
Registration growth remains solid and is expected to increase by a mid single digit percent in the fourth quarter as compared to the third quarter.
Gross margin in the fourth quarter of 2021 is expected to decline approximately 3% compared to Q3 2021.
Due to higher costs related to clinical operations backlog, and some excess clinical and manufacturing capacity.
Opex is expected to increase by approximately $6 million in Q4 2021 as compared to Q3 2021 due to the achievement of the $3 million verily milestone in October and growth in bad debt hiring and investment.
And with that I'd like to turn the call back to Quintin for closing remarks.
Thanks, Doug in closing I want to thank I rhythm family for the warm welcome to the company. Our teams have realized some amazing accomplishments over the years and bringing the company to this stage the superior technology platform speaks for itself through the numerous peer reviewed publications as well as the rewards and recognition that <unk> has received.
It's a testament to the sort of talent that is present within the walls of VI rhythm and I couldnt be more excited about the opportunity to be joining the company at this time.
I see a very dynamic and exciting future in front of my rhythm one that will be full of significant growth, but also one that will require transformation to realize our full potential. We are a platform technology that is unique and differentiated from our hardware software and AI perspective, as well as the service. We provide I believe strongly that we must continue to innovate and iterate off of.
This platform and continue to be the innovation leader in the market.
We must also transform the way, we operate and run the business to be able to scale the company as efficiently as possible as.
As we position ourselves to serve millions of more patients I am committed to ensuring operations are structured both effectively and efficiently to meet the ever growing demand in front of us have already identified several opportunities to improve the way, we do business that will allow us to operate more efficiently.
Looking forward to sharing more details on these opportunities in the coming months.
And lastly, I am honored to be leading I rhythm and working every day with our team of over 600 individuals to deliver a service that has an important impact on patients providers and systems alike.
<unk>, we are changing the standard of care in cardiac care and I am excited about the possibilities to make an even bigger impact in the future.
We will now open the call up for questions operator.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Withdraw your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from the line of Margaret Kaczor from William Blair. Your line is now open.
Hi, everyone. This is Brandon on for Margaret Thanks for taking my question.
If I could first focus maybe a little bit near term in terms of guidance.
Appreciate that Theres, some COVID-19 headwinds and maybe some staffing shortages, we've certainly heard that from a lot of other medical device names.
A little surprised that the severity of the impact that maybe the way that I'll try to.
Quantify it as if we look at if you did a more normal historical high single digit sequential growth in Q4, I'm calculating something like 13 or $14 million difference to what that would be versus the guide is that a way to think about to kind of quantify COVID-19 headwinds the next quarter.
Well first let me go into the math, just a little bit.
So.
As you look at Q3, and this was built into our guidance.
We told you before we had about a week of extra patch Q clinical Q.
As of the end of the second quarter should we work that back down. So so the first thing you do is you get back about a week off of.
Q3s about a week's worth of revenue off of Q3 to get to a more steady state.
And then as we discussed in.
My prepared remarks.
We are seeing a mid single digit growth in registrations from Q3 to Q4.
So the businesses.
You are correct in that in prior years, we've often seen a higher.
Mid single digit growth rate and we do attribute that to the combination.
<unk>.
The COVID-19 related staffing reductions and the.
And the fact that we slowed down some new account opening and account expansions in the third quarter due to the clinical Q, but I do definitely want to emphasize to you that we are still seeing a healthy.
Mid single digit growth rate in registrations from Q3 to Q4 and the underlying business.
Okay.
And then in terms of reimbursement.
Interesting comments that we saw from CMS.
I appreciate you probably won't want to comment on how this.
Could you use in your specific case, but we did finalize in their words the supply cost of $200 for extended D. C. G codes.
Our understanding is you cant bill for supply cost I think that's part of the global code. So is that correct and then is there if that was the correct supply costs us.
The CPT code would you add.
The labor and supplies on top of that just trying to understand how meaningful or what that $200 code that CMS published could mean for you all.
Sure I'll grab that one as well so.
So the first comment is that.
What CMS is done at the carrier pricing for next year.
We will we are continuing to work with the Macs.
Okay. Thank you.
Thank you. Our next question comes from the lineup phacelia for a long for Morgan Stanley. Your line is now open.
Thanks for taking my question Oh. This is Calvin on for sewage two quick ones for me. The first one I just wanted to revisit the reimbursement dynamics. So with the final rule documented calling out kind of 200 dollar price tag for the key supply item and and understanding the limited visibility into kind of whether this makes it into the proposed or final rules for the twenty-three cycle.
Could you just talk about how the sets you up for negotiations potentially with your commercial payer cohorts as you head into 2022 does this perhaps add a good data point for that process and also relative to the low single digit pricing headwind I think you've spoken to in the past from just contracts coming.
Updo with that sort of magnitude continue incandesce datapoint help essentially moderate that going into 22 at a quick follow up.
Yeah. This is Clinton here.
Hopping around calls here uhm, but but just I guess on the the <unk> commercial reimbursement front.
You know can you comment I guess, whether or not one there was any impact from from any commercial rate changes within the quarter and then I guess as we think about uhm moving into 2022, I guess are you feeling you know more comfortable with the potential for commercial payers to have a lower impact or not necessarily have an impact to their rates in 2022, and then from a tiny.
Perspective, I mean, when do you get a sense for around where commercial payers may change their rates I mean, if there's something that they're going to have the right already stopped by December or by January or it could we see some types of brain changes throughout the year just given that there's you know multi kind of your contract and then different contract groups within the commercial payer segment.
Sure. So I'll I'll take that and then dug feel free to jump it if you'd like to.
No significant impacts from occur commercial right perspective within the quarter itself, we haven't seen anything along those lines and I think encouragingly. The majority of our commercial contracts you know what our position now where we would have been notified had they intended to renegotiate rates for 2022, So I feel good about the fact that.
We have an engaged in those sort of discussions and they haven't made us aware that they want to want to renegotiate for 22, I I think again back from a commercial perspective from my experience and then these discussions they tend to understand the value of the technology and the ability to reduce cost over the continuum of caring for a patient and uhm we know.
That our technology or product physicians ourselves very well to be able to better diagnose upfront you know the different sort of conditions that would allow them to treat those proactively and reduce costs over time. So I'm encouraged by what we're seeing but nothing nothing from a commercial perspective that gives me any concern at this point in time.
I will say that we do have contract that come up for renegotiation over the course of the year. They are not all tied to the beginning of of a calendar year, but the vast majority of those contracts. We would have been notified by this point in time, so I'm encouraged by that.
Okay. That's that's helpful. And then I guess just still on the segment within within some of the the wording within the the final world that came out of I guess, you know they had talked about others I think 10 invoices or so that were part of this computation to get to this 200 dollar right I mean, <unk> and your understanding is this.
The 10th emissions, a somewhat significant number or or payers or CMS go into one C. 100, a thousand 5000 types of of of of submissions within voices to be able to have some kind of rate change.
Which was retroactive to January one.
And im sure im not including like VA or other in that public versus private I'm, just giving you the CMS fee for service Medicare fee for service.
Okay and can you give us an update on how youre ramping in the U K and at what stage do you start breaking out international revenue for us.
Yes, John This is Quinn look we're still in the early stages of really opening up that market and we want to be very thoughtful around how we do that to ensure that one we really demonstrate the value of the technology with which the team has done incredibly well, but we also.
Establish long term reimbursement scenarios that will set us up for sustainable growth and opportunity to really address the majority of that market over time. So we're in the early stages. There. The progress has been terrific in terms of the adoption of the technology, but to get into how quickly we're going to break that out and report on it.
That's not something we're prepared to do today and I think quite honestly.
It's going to take a while as we step into it I do think you hit on a very interesting point, though which is that international business.
There is real opportunity there to go far beyond even the U K and I think thats something youre going to see us continue to get more focused on here is really defining that reimbursement strategy market by market and begin.
To work from a market access perspective to open that up in a way that it can contribute meaningfully to the overall scope of the business into the future I think having the support of nice.
Behind the technology and understanding what it can deliver as something that if done right can be leveraged in a meaningful way as we open up the rest of international So I think the UK is exciting, but theres certainly a lot more opportunity behind that.
That's helpful. Thank you.
Thank you. Our next question comes from the line of Allen Gong from Jpmorgan. Your line is now open.
Hey, guys. So I feel like a lot of the questions have been answered already so I'll just.
One and a quick follow up this is kind of I would say the first time you guys have really highlighted that international business of X gene AUC really outpacing the market.
And I know you haven't been at the firm for that long question, but just in terms of your strategy ultimately for leveraging the.
The award that you received and your plans to expand more broadly there how should we think about the trajectory of your international business and whether or not that will be relatively a bigger piece of the story going forward.
Well I, certainly think youre going to hear us talk about it it's going to be something that we are intentional about building out and having it contribute in a meaningful way to the overall contribution of the company, but I think importantly, it needs to be done the right way.
We're simply after quick revenue wins, that's a very different approach than trying to establish it for long term sustainable growth to where it's really contributing.
To 30%, 40% of the overall revenue contribution over time, which I think is quite common in these global companies. So that's what we're after is setting this up in a way that can contribute.
To that degree what that means is being very deliberate around what that reimbursement pathway is and the strategy is on a country by country basis. So as I as I look at the opportunities in front of US today, certainly the U K market is one that we're focused on and we're going to continue to focus on and invest into and prioritize when you think about markets like.
Germany, which is a significant market.
From our perspective, we're looking at every opportunity to open up that asymptomatic as possible.
The verily collaboration is one of those we're excited about an opening that up but I think there are other ways to play in that space as well and the organization is focused on those things.
I have no question that that silent afib market is going to open up and be a real contributor to us.
Compare it back to some of the prior opportunities that had been a part of in prior roles.
The whole type two non intensive diabetes segment for example, working with the payers to understand that the ability to diagnose and find these.
Find these opportunities and the patients before the onset of the disease or the condition has tremendous ability to reduce downstream cost and I think the payors are intently focused on opening up those sort of opportunities and the <unk> platform is perfectly positioned to be able to do that so I am excited what the what the form <unk>.
It looks like between a wearable between the patch I think theres different ways to play in that but I definitely think that's going to be something that will open up and contribute to us in time exactly what that timeframe. It looks like just yet I think it's too early to try to speculate on what that would be but that market is significant it's real and.
In time it will contribute so we're excited about.
Let me see comb enrollment has a place to help address this and we are seeing that as part of the opportunity. Although home enrollment is not to the same rate that we saw back into the midst of the significant COVID-19 impacts you know this is really driven around shorting shortages of staffing you know that are driving the.
Overall impact on the volumes.
I think the issue is just getting patients through the clinic through the physician offices and coming onto the therapy is certainly one of the issues with respect to growing the existing accounts that are already using the technology and certainly from a new account perspective, just the fact that when we pulled back on that back in Q3 with respect to some of the.
And challenges, we didn't want to introduce new accounts to a service level that that we weren't proud up from an irhythm perspective, and so we were a bit tempered on that you're seeing that start to come back in the fourth quarter. I mean, if you look at the the weekly sequential trends in the business coming through the back part of September into October we're very encouraged by what we're seeing is just it's muted.
A bit relative historic seasonality so.
And again I attribute that.
The staffing challenges in terms of just seeing more more patients coming through the clinician offices. So the trends are moving in the right direction I do think optically and Doug talked to this you have to be able to adjust that Q3 for the the impact of working through the queue. If you do that you do see Q3 stepping up into Q4 and certainly registrations.
Coming onto the product or are up as well, we've talked about being in the mid single digits compared to what historically might've been a little bit stronger, but I think you can attribute that to the to the staffing challenges.
Okay accurately how <unk> I appreciate it my follow up here, it's just sort of technicality on the CNS final rule first language in there that sort of fragging, a big decline to finalize the proposal because of the potential impact appointment for on their services under the final.
Do you have any read on that R. O M. E. R consultants have can shed some light on that we were a little Scott by some of that language in the exact reason for not finalized.
The proposal thank you.
Yeah, I can't provide any particular redone it we'd be speculating if that were the case, but that's not something that we're gonna do so no I don't I don't have any agreed on that.
Okay helpful. Thank you.
Next year, we're going to continue to work with them over the course of the year to ensure that they're educated in a way that they need to be that theyre getting the information they need to have to be able to make a decision, but we've been encouraged by by the involvement that we have seen with them to date.
And I believe that those stores will remain open the information will continue to flow and we'll do our best to provide them, what we can and certainly partner with the rest of industry to position them to be able to make a final decision.
Great. Thanks for that and then if I could just any.
Comments on either competitive dynamics <unk>, just internal sales force turnover over the last I don't know call. It since the beginning of the year. Thanks, That's all I had thanks for taking my questions.
Sure as I've looked at the turnover in attrition in the commercial force, we haven't seen anything outside of kind of the normal rates that we generally would see in.
In the business. So I don't think theres anything there to be concerned around from a competitive perspective over the course of the third quarter and I've had the opportunity to be out in the field I don't see anything meaningful from a competitive perspective.
Account churn or attrition that falls outside what we've always.
Experienced here historically, so I would say there is nothing unusual in those trends built to.
The comment on <unk>.
Continue to be.
Bullish on how this will continue to step up and rebound in the fourth quarter and sets us up for 2022.
Thank you at this time I am showing no further questions I would like to turn the call back over to Quintin Blackboard for closing remarks.
Well, thanks, I'd like to thank each of you for joining US today, we're at an exciting time in our company's lifecycle with a game changing technology that I believe has tremendous potential in front of it both in the core markets that we serve and I've talked about today, but also in the many many adjacent markets and opportunities that sit in front of us.
I look forward to the opportunity of partnering with our algorithm employees as we've positioned the company to realize the full potential in front of us and look forward to being back with you to discuss our full year 'twenty. One results in further plans for the future. After the turn of the year, thanks, everyone and have a great day.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
[music].
[music].
[music].