iRhythm Holdings, Inc. Q2 FY2020 Earnings Call

Thank you for standing by, and welcome to the iRhythm Technologies Q2 2020 Earnings Conference Call. I would now like to hand the conference over to your speaker for today, Leigh Salvo, Investor Relations. Please go ahead.

Thank you all for participating in today's call. Joining me are: Kevin King, CEO; Doug Devine, CFO; and Dan Wilson, EVP, Strategy, Corporate Development and Investor Relations. Earlier today, iRhythm released financial results for the second quarter ended June 30, 2020. 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, 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 related to the impact of COVID-19 on our business, expectations for economic recovery, market expansion and penetration, productivity improvements, reimbursement, release of clinical data, operating trends and 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. For a list and description of risks and uncertainties associated with our business, please refer to the Risk Factors section of our most recent annual and quarterly reports on Form 10-K and Form 10-Q, respectively, with the SEC. This conference call contains time-sensitive information and is accurate only as of live broadcast today, August 6, 2020. iRhythm 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 Kevin.

Thanks, Leigh. Good afternoon, and thank you for joining us. On behalf of the iRhythm team, we hope you're remaining safe and healthy. I'd like to start our call by recognizing the iRhythm team. Over the past few months, I've observed our team rallying to meet the challenges, demonstrating incredible resilience and operating at the highest level, all while adapting to a new work environment. Despite the challenges, we have continued to deliver our service without interruption to the physicians and patients that rely on it. We recognize the need for high-quality care has never been greater, and the iRhythm team is intently focused on delivering the care needed in today's environment. I'd also like to welcome Doug Devine to our team. Doug joined us during an exceptionally challenging and unusual time for our business. Despite that, he was able to immediately step in to provide a very smooth transition and has already demonstrated the impact of his leadership on our finance organization and input on our long-term growth objectives. In my prepared remarks today, I'll discuss the key highlights of our second quarter, provide our current views of the market environment, discuss our outlook, and our strategic priorities for this environment. Doug will go into more detail on our financials for the second quarter before we open the call up for questions. As we entered the second quarter, we faced many uncertainties related to the impact of COVID-19 and what that would have on our business. To manage through this uncertainty, we implemented three operating initiatives: first, to protect and support the health and wellbeing of our employees, our communities, and our customers; second, to ensure uninterrupted ZIO Service delivery; and third, to ensure continued financial strength by adjusting our operating plan. Our team delivered on all three objectives, and our financial and operating results for the second quarter demonstrate this. We were encouraged by our second quarter results despite the impact and challenges of COVID-19, which we felt especially early in the quarter. Total revenue for the second quarter of 2020 was $50.9 million, a decrease of 3% compared to the same period in 2019 and a decrease of 20% compared to the first quarter of 2020. We saw steady recovery throughout the quarter, and the pace of recovery exceeded our expectations and revised operating plans. Average daily registration rates grew steadily through the quarter. Compared to the average weekly registration rates prior to COVID, April represented the trough at 65% of pre-COVID levels and June was approximately 90% of pre-COVID levels. While COVID-19 suppressed the overall market in the second quarter, we believe iRhythm increased its share of the market as measured by our success in three areas. First, compared to legacy Holter monitoring services, our clinically superior digital platform was proven to be well-suited to deliver services in a virtual environment. Our single-use ZIO devices are patient-friendly and eliminate the need for cleaning of equipment between uses. Second, our home enrollment service enabled by our digital platform was instrumental in maintaining the registration levels we experienced in the quarter. We expect it will remain an important component of many of our accounts' workflows going forward. As we shared in early May, home enrollment represented over 50% of registrations for the month of April. As hospitals and physicians began resuming in-office patient visits, this percentage leveled out to just below 30% as we exited the quarter. We expect to remain at these levels for the foreseeable future, and believe this will be a key factor in ensuring continuity of patient care in the event of a continued ramp in COVID cases that leads to reduced in-office patient care. As such, we've been actively working on improving the efficiency of our home enrollment service and are prepared to support 100% of our volume if needed. For example, we recently launched version 1.8 of ZioSuite, which now includes a tracking feature that provides us and our physician customers with patient and device visibility from registration through report delivery. ZioSuite is an important component of our service as we continue to scale our operations and home enrollment service. Lastly, ZIO AT demonstrated continued strong traction and meaningful growth over 2020. Our single platform solution continues to resonate with our customers as they put high value in streamlining workflows across their cardiac monitoring needs. The experience that our customers have with ZIO XT and the high confidence of familiarity they have with our service and platform has benefited ZIO AT adoption. Further, ZIO AT has unique advantages over traditional MCT technologies that are being recognized by our physician customers. ZIO AT utilizes the same form factor as ZIO XT, resulting in high patient compliance and wear time and is backed by the same detection algorithms and AI tools we have developed for ZIO XT over the last several years. Less than a year into the full market launch of ZIO AT, we're very pleased with the adoption to date. We are increasingly confident that we can continue to expand into the MCT market and take meaningful share. While we're pleased to see signs of market recovery, the situation remains fluid with the level of recovery varying widely within accounts and within regions. So while we've continued to see slight improvement in July, we believe there are several market factors that may lead to suppressed demand through the rest of 2020. Feedback from our commercial team indicates that a number of accounts have effectively worked through their backlog and are now seeing a steady flow of new patients. While encouraging, we're not yet experiencing this trend consistently as patient willingness to enter the healthcare system remains varied, particularly in regions that have experienced a strong resurgence of COVID-19 and continued uncertainty as numbers escalate. In addition, we're aware that hospitals, especially those in hotspot regions, have limited or even ceased performing procedures deemed deferable or elective. Nearly all healthcare facilities have adopted new, highly stringent protocols and workflows, likely to impact patient volume and throughput while they remain in place. Utilizing telemedicine solutions, including our home enrollment service, will help offset these pressures, but the adoption of virtual care models has also been varied. That said, new account adoption of our ZIO Service continues to be lower than pre-COVID-19 levels. The impact to our third quarter and to the second half of the year remains unpredictable, particularly with the continuing rise in daily new cases of COVID-19, up three times over May levels. We remain cautious on steady rates of volume recovery as we progress into the second half of the year. However, we do expect to return to year-over-year revenue growth in the third quarter. If current trends continue, we expect Q3 to be in line with pre-COVID levels with volumes growing slightly from June levels. Offsetting this is the expected impact of summer seasonality and its effect on physician prescribing patterns. Longer term, we have high confidence in our ability to change the standard of care and continue to gain market share. As I noted earlier, we're focused on the long term and managing our business accordingly with the primary goal of continuity of service for physicians and their patients. Next, I want to spend a minute providing an update on our operations and cost containment measures. Our priority remains on the health and safety of our employees and maintaining stringent safety protocols for all in-office functions and employees. We've continued to maintain full organizational capacity through a combination of work-from-home capabilities wherever possible, daily on-site operations for those groups that must work from the office, and the use of virtual online tools to facilitate group projects and to provide support to our physician customers and their patients. Our field sales activity has remained primarily virtual in most regions through the country. Regarding our cost containment measures, with the noted increase in patient registration levels during the quarter, we have now returned all previously furloughed employees, reinstated salaries to pre-COVID levels, and resumed hiring for key roles. We are maintaining certain other cost containment measures to preserve cash and liquidity but are making the required investments to continue to scale the business to meet the increased demand and pursue long-term growth initiatives. Turning to reimbursement. As you likely know, CMS published the much-anticipated proposed Medicare Physician Fee Schedule Proposed Rule for 2021 earlier this week. The issuance of the proposed rule is now followed by a public comment period that closes on October 5, 2020, and will culminate in CMS's final rule expected on or around December 1 for implementation on January 1, 2021. We covered the details of this proposal and its impact on our business during a conference call this past Tuesday, which is archived and available on our website, so I won't repeat all of that information today. On August 5, CMS published a correction to the relative value units and related information used to determine Medicare payments for the eight new codes associated with external extended ECG monitoring. The correction increases the relative value units for technical codes, and decreases the RVUs for the global codes. The remaining four codes associated with patient hookup activities and final interpretation were revised downward by a small percentage. This correction is incrementally more positive if applied to our 2019 revenues as described earlier in the week. After several years of collaborating with the American Medical Association, the Heart Rhythm Society, the American College of Cardiology, and the CMS staff, we are pleased with the very positive impact the proposed outcome will have on our business and especially to have such a significant milestone successfully behind us. Our long-term strategy remains intact. This includes increasing market penetration with the ZIO platform, increased operating leverage through continued productivity and automation improvements, and expanding the addressable market into new indications and geographies. We expect to continue planned investments to drive long-term growth and profitability for shareholders and are as confident as ever in the durability of our business. While we're cautious on the outlook for the remainder of 2020 and would be hesitant to predict a fast recovery, we believe the future of iRhythm has never been brighter. There is considerable potential for structural changes to how healthcare is delivered, and that will play to the strengths of our digital platform. We're focused on positioning iRhythm to continue to drive the standard of care in how cardiac arrhythmias are diagnosed and managed, and delivering our ZIO Service to millions. With that, I'd like to turn the call over to Doug.

Thank you, Kevin. Before I jump into my comments on the quarter, I'd first like to express how excited I am to join iRhythm and to thank Kevin and the Board for offering me the opportunity to contribute to the future growth of a great company and a great team. The second quarter of 2020 undoubtedly goes down in the record books as one of the most challenging business environments all of us have ever experienced. iRhythm rose to the challenge rapidly and successfully shifting our business model to accommodate our physician customers and their patients. We expanded home enrollments from a single-digit percent to over 50% of volume at peak, maintained traction onboarding new accounts with evolving sales models and executed internally on many aspects of our operation in a remote environment while at the same time reducing expenses, preserving liquidity, and cash. Moving on to the financial highlights for the second quarter of 2020. Revenue declined 3% year-over-year and was sequentially down 20% quarter-on-quarter. Gross margins were 69.6% for the quarter. We experienced continued traction and expansion of ZIO AT. Cash and short-term investments were $114.9 million at quarter end. Taking a more detailed look at the second quarter financial results, revenue recovered throughout the quarter from a low point in April, followed by steady improvement through May and June, exiting the quarter approximately 10% below our pre-COVID run rates. We saw that trend continue and gradually improve through July as well. As we think about individual drivers within revenue, we saw continued strong quarter-on-quarter growth for ZIO AT. The higher ZIO AT mix, combined with improvements in revenue cycle management, led to ASP increases in the second quarter. On an account and regional level, second quarter volumes showed material variances across regions and accounts. Fifty percent of our accounts remained more than 10% off their Q1 run rates, offset by continued onboarding of new accounts and growth of over 10% in run rate over Q1 run rates for 25% of our existing accounts. The large number of accounts, more than 10% of Q1 run rates, indicates many accounts and regions are still well below full recovery. As Kevin mentioned, home enrollment peaked at slightly over 50% of patient registrations early in the quarter before reducing to the end of the quarter at 36% of volume. July home enrollment levels have continued to trend downwards into just below 30%. The iRhythm team has demonstrated flexibility to support home enrollments and is well positioned moving forward to meet evolving conditions. Turning our attention to the rest of the P&L, gross margin for the second quarter of 2020 was 69.6%, a 5.1% decrease compared to the gross margin of 74.7% in Q1 of 2020. Second quarter gross margin was down due to lower volumes for absorption of labor and fixed costs, and some higher costs associated with home enrollment, primarily outbound shipping and logistics costs and labor. Gross margins improved from a low point in April as we moved through the quarter. Non-adjusted operating expenses for the second quarter of 2020 were $55.6 million compared to $56.6 million for the prior quarter, a decrease of 1.9%. Excluding the $3 million milestone payment to Verily, OpEx was $52.6 million or a decrease of 7.2%. Looking at cash OpEx and adjusting out both the Verily milestone and looking at the cash operating expenses, we're down $13.7 million compared to the first quarter or a decrease of 24.6%, evidencing the company's strong actions to preserve cash. A couple of other points to note on OpEx. We partially reinstated stock compensation, resulting in a $9.5 million increase to non-cash OpEx quarter-on-quarter. Also, bad debt expense, a metric that we've been watching very closely in the current environment, improved $3.2 million versus the first quarter as payments trended stronger than forecasted. Finally, the net loss for the second quarter of 2020 was $20.4 million, a loss of $0.75 a share compared to a net loss of $10.7 million or $0.43 a share for the same period in the prior year. Turning to our expectations for the remainder of 2020. While the business stabilized somewhat in June and July compared to the preceding 2.5 months, due to the current environment and heightened level of uncertainty surrounding the COVID-19 pandemic, we remain unable to estimate the magnitude or duration of specific impacts on our business. For that reason, we will not be resuming financial guidance at this time. However, we want to communicate to investors the following activities and steps that we are taking to ensure the long-term sustainability of the business. First, our ability to rapidly transition from in-clinic to home enrollment operations remains key to maintaining meaningful registrations and revenue streams during this challenging period. Second, we took significant steps to decrease our spending run rate and preserve cash in the second quarter. We intend to continue to take appropriate measures going forward to preserve liquidity while balancing growth and investments in the business as volumes return. Finally, with over $114 million in cash and short-term investments on hand, we are in a strong position to weather any near-term challenges. Kevin, Dan, and I would now like to open up the call for questions. Operator?

And our first question comes from Robbie Marcus with JPMorgan.

This is actually Lili on for Robbie. Could you provide a bit of color on the use of ZIO in acute settings in the quarter? I understand you probably don't want to break out specific numbers. But how big of a benefit was the acceleration in adoption here? And are these tailwinds something that we can expect to continue to see in the back half of the year? Or will this kind of slow down as the virus abates?

Lili, this is Kevin. The acute setting, are you referring to ZIO ATs used in the hospital?

Yes, that's right. Sorry about that.

Yes, for inpatients. That level has decreased. The uptick in ZIO AT volume we're talking about is in the traditional ambulatory outpatient cases, where the likelihood or possible threat of a life-critical arrhythmia exists. Many of the patients that were in the COVID environment back in the March, April timeframe, when we gave the May reporting, those numbers too were a little bit on the smaller side. A vast majority here is ambulatory-related traditional market. We're extremely confident in that adoption rate that we're seeing right now. This is the core market that we're growing ourselves into.

Great. And just one quick follow-up. As you guys mentioned, there's clear benefit to ZIO over traditional Holters in this environment, given the single-wear nature of the device. So what have you been hearing from doctors on how this has impacted their adoption? And do you think that this could have lasting impacts longer term post-virus?

Yes. In a similar way to how we're seeing telemedicine become adopted due to the pandemic, we're also finding on the Holter side that COVID is an accelerant to adoption. In many cases, patients are refusing to wear medical devices that have been reused or worn by others. There are staff constraints. And then of course, just the ability to do Holter monitoring via home enrollment with a device that has limited capacity or where a hospital would have a limited number of Holter monitors, when we have a single-use wearable with essentially limitless inventory to provide to accounts for home enrollment, there are major advantages here. Additionally, all of the demonstrated clinical superiority of ZIO is weighing in here as well in a big way.

And our next question comes from David Lewis with Morgan Stanley.

This is Calvin on for David. Just kind of a related question, could you comment on how resurgence has impacted either June or July results in sort of either direction in terms of both the underlying demand from regular way ZIO patients as well as, to your point perhaps in the context of constrained hospital capacity and resurging hotspots, resulting in kind of increased demand for ZIO to assist capacity?

Sure. Calvin, it's Kevin. Look, I think this sustained and rather spiky nature of COVID-19 has created a really, really heterogeneous market with demand levels being varied in geographic locations and in accounts. So within areas that are hotspots, we clearly see a high degree of variability in our daily and week-over-week registrations. I would say, even in recovered regions, there's nonuniformity. It's almost like a lingering effect from COVID-19. As we stated in the prepared remarks, many accounts have not returned to full growth yet. So I think the effect of COVID-19 is really depressing demand within the marketplace overall. That said, where there are opportunities, we do think that we are taking up a larger percentage of the markets through the benefits of our single platform and the wearable biosensor that's clinically superior to other approaches. I mentioned this to Lili. Our ZioSuite information system is having an impact on workflows as it helps accounts, especially those accounts that have reduced staffing levels due to layoffs, and our ability to deploy home enrollment via the ZioSuite application. In the cases where there is demand and patients are getting to the hospital, I think we're getting a disproportionate percentage of those. That said, part of the market seems to be cut off due to the increase in spottiness and spikiness of the nature of the virus. I probably should add one comment there. I do think that accounts are better prepared now than they were in March. Many of them have put in place staff and patient safety protocols. They have limited access to accounts for us, but they have been able to handle this qualitatively. They have been able to deal with this in a better way than they were back in the March-April timeframe. Many, many accounts just completely shut down. I think that we hear less of that; it's probably more about capacity constraints right now.

And our next question comes from Margaret Kaczor with William Blair.

First, I just wanted to see if we could talk a little bit more about the comments on kind of gradual increases or gradual improvements as you went into July. I was wondering if you could quantify that at all, I was trying to understand, I can appreciate you're going to return back to year-over-year growth. But what does that look like kind of on a sequential basis? How much above 90% of pre-COVID levels might we be at?

Doug, do you want to comment on that?

Sure. I mean July was a slight uptick from June. As we have highlighted, given the COVID situation and given that we're seeing great variabilities between our accounts, it’s difficult to predict where September is going to go in this model and where August may go. So I think we've led you directionally that trending slightly up from 90% and that we're viewing Q1 levels as being a reasonable level of expectation. But we're not in a position to be more specific than that at this point in time.

Okay. That's helpful. And then also, I was curious, the adoption of ZioSuite, and that sounds great and it sounds like it's getting a lot of traction. I was curious if there's any difference in utilization or growth rates in accounts that have adopted ZIO, any noticeable trends, either positive or negative, I would guess positive, that you've seen in those accounts.

So we've spoken in the past about our innovation stack. The four or five layers of information system stack were most recently rearchitected and launched as ZioSuite. We now have all of our accounts, or nearly all of our accounts, migrated to ZioSuite. This is the benefit of having a digital information system platform that's cloud-based. All of our customers, or nearly all of our customers, have migrated to ZioSuite, and we're receiving really strong feedback on the benefits of ZioSuite relative to staff productivity. A lot of our accounts have had staff layoffs, and so they're being asked to do more with less. The ZioSuite is helping them when it comes to ordering monitoring devices, tracking where patients are, getting reporting and things of that nature. Plus, it's a significant productivity boost for physicians if they're working from home because of the ability to use your tablet, desktop, or cell phone for ZIO. I would say that it's been a great success, and it's fully deployed and is having an impact compared to what we had called ZIO Reports previously.

Great. And then one last one on my end. Any updates on the high-risk market? I think we were originally thinking that we'd see some mSToPS and SCREEN AF data in 2020. Is that still the case? Or any other updates there?

Brandon, it's Dan. Regarding mSToPS, we still expect the 3-year outcomes data potentially at AHA in November this year, so excited about that. SCREEN AF, if you recall, that was on deck to be presented at a conference earlier this year in the May timeframe, which got postponed, so it's unclear when that data will be presented. I think the investigators are trying to find the right venue or journal to present that data. The third one I'd call out for you is GUARD-AF, which kicked off late last year. That trial was paused in March due to COVID but has since been restarted last month. Like our commercial business, the trial has now adopted our home enrollment service as well as some other virtual features. That one is just getting back up and running after starting late last year, so too early to give any potential timelines around that one. Like mSToPS, GUARD-AF will also have stroke outcomes data, so we're excited about both of those.

And our next question comes from Kaila Krum with Truist.

And welcome, Doug, to the conference call and the team. So you guys mentioned in the press release that you think that lower volumes in the quarter were in part offset by a higher ASP. So can you give us the split between volume and price if it was meaningful in the quarter? What contributed to that price benefit? Is it just standard business mix with XT? Or is that tied to AT? I'm trying to understand if AT is big enough today to be a meaningful contributor at this point.

Yes. I can maybe take up the ASP mix question and maybe Doug can take the second half. Or Doug, if you'd like to take the whole thing, go ahead.

I'll go ahead and take it. First, on the ASP, it was a healthy ASP kind of mid-single-digit type of uptick. As you're aware, AT has a meaningfully higher ASP than XT does. Half of that increase was driven by the change in the mix, where we saw AT units increasing quarter-on-quarter and XT units decreasing quarter-on-quarter, which magnified the impact you were seeing. The second piece of it is that we are seeing some general improvements in our revenue cycle management, which led to the remainder of most of the increase. Taking the second part of your question on the impact of AT, it is growing. It is still well below 10% of our revenue. We expect it to continue growing and anticipate providing steadily greater detail on the breakouts of AT in the future.

Great. Okay. That makes sense. It sounds like you guys have been looking at your long-term growth vision. You mentioned that Doug has already been able to provide some input there. Are there any initiatives that you now feel more confident implementing that you may not have otherwise, just given the reimbursement update and expected rate increase?

Kaila, I think we've always been confident in the reimbursement outlook, even prior to this Tuesday or Monday or Tuesday's announcements. We've not altered our strategy because of the reimbursement, favorable reimbursement or potentially favorable reimbursement here. Our confidence has remained the same, driving new indications, driving geographical expansion, and driving new forms of clinical evidence that can open up new markets, like the silent atrial fibrillation markets. Platform investments, we've essentially modernized or rearchitected three-fifths of our technology platform in the last 18 months. Similar to what I just described about ZIO AT, these initiatives are being invested in, rolled out, and having incremental impact while keeping our platform fresh, current, and highly competitive. We're continuing to do that; we're not taking our foot off the gas here at all nor are we really changing our strategy because of the confidence.

And our next question comes from Cecilia Furlong with Canaccord Genuity.

I wanted to follow up first on mSToPS as well as SCREEN AF. How do you think about the rollout of this and the impact in 2021, specifically your thoughts around how screening in high-risk patients plays into a post-COVID or COVID-altered world and really the ability to shift practice?

Cecilia, it's Dan. As we've looked at what's going on in the healthcare environment today, our conclusion is that there's potentially more asymptomatic or undiagnosed AF in the population than there ever has been. That's the first point; we're even more confident that this is a market that we should be going after and investing against. Regarding mSToPS, that is an important trial, given the outcomes data. It's really the first opportunity to show that targeted detection of asymptomatic AF can potentially lead to improved outcomes, hopefully, a reduction of strokes. That's been our hypothesis all along, and we have had favorable data to this point suggesting we are on the right track. However, this will be the first opportunity to see that data come together. We know that it is important data from a market development standpoint, whether it be with payers, physicians, or even clinical guidelines like the USPSTF prevention screening task force. We're excited for that data later this year. SCREEN AF is important as well, and we expect that data to come out soon. GUARD-AF, like mSToPS, will have stroke outcomes data as well. We believe things are lining up well for us in this initiative. It will take time, as clinical data comes out, and we're looking to change behavior. We're excited about it and believe we're on the right path. It's too early to say we'll see anything from a commercial standpoint next year, but we're absolutely moving in the right direction.

And our next question comes from Suraj Kalia with Oppenheimer.

First question, Kevin, for you or Doug. Doug, forgive me; I did not follow your commentary exactly. So there was a net 5% increase in ASP. ZIO XT price was down quarter-over-quarter, but AT was up quarter-over-quarter. Within the context of the codes currently used, how sustainable are these price increases for ZIO AT? And am I right that the AT price increase was in double digits in the quarter? Maybe I didn't connect the dots.

First, yes, correcting a couple of points. I said it was a mid-single-digit increase. I don't want to be as specific as putting a number to it. ZIO AT prices were very consistent quarter-on-quarter. What changed is that ZIO AT became a larger fraction of our mix. ZIO AT units grew quarter-on-quarter while ZIO XT units declined quarter-on-quarter. That accounts for half of the overall ASP increase on a per-unit basis for the quarter. We believe that the revenue cycle management improvements are also sustainable.

Sure. As I said on the call yesterday, we provided to CMS over 500,000 invoices for our service across contracted, non-contracted, Medicare, self-pay, client bill. They have full access to all various types of payments over an extended period.

And our next question comes from Marie Thibault with BTIG.

I wanted to ask a question about the market share commentary you gave. It's encouraging and it makes a lot of sense. Is there any way to sort of quantify what you're seeing in terms of that share shift? I understand it's very difficult in this environment. Secondly, do you believe some of those underlying factors, which sound like they're part of a larger social trend, are sustainable to help you maintain some of that market share shift?

We have iRhythm company-specific data that we gather from our customers with a good intelligence on prescribers, prescribing patterns, and what is the mix. This data is gathered internally, it’s consistent and reliable. Compared to other companies that have reported in the category, we were down 3% year-over-year. I think other companies reported were closer to 20% to 25% down year-over-year. That implies we have taken a bigger piece of the market.

What are your hiring plans? I think you hoped for 160 or so by the end of the year, whether that's being maintained or if there are any changes there.

We didn’t do much hiring here in the second quarter. We only recently restored hiring of key positions. Nothing meaningful in the second quarter per se and a lot depends on what happens in Q3. I don't have a number off the top of my head, but I guess it's probably going to end up being less than 160 due to the delay in the hiring pipeline.

And our next question comes from Gene Mannheimer with Colliers.

Congrats on the great progress here. I just had a couple of follow-ups on the reimbursement. Kevin, you said that yesterday, CMS published some modifications to the RVUs that go into the payment calculation, where you'll drive a small benefit. I'm just wondering if you can quantify that for us.

On August 5, CMS published a correction. Initially, as reported, the codes should equal a global code value. They did not. When that happens, the technical code went up, and the global code went down by almost the same amount. The remaining codes associated with patient hookup activities and final interpretation were revised downward by a small percentage. We believe the overall impact would be high single digits year-over-year to the positive.

Historically, does the reimbursement tend to change from the proposed rule to the final rule?

I think the big factor is the conversion factor that all of the RVUs get multiplied by to arrive at a price point. The proposed rule indicated a 10.6% decrease in the conversion factor across all categories. That is likely to be heavily debated. In prior years, it's been nowhere near that level. As payment for other codes went up substantially, CMS is required to operate a balanced budget format, so they can't just pile on more expense. My guess is that this will be debated heavily. I hope I'm correct but regarding the code structure side, the process was thorough and complete, so I'm hoping that there's not much to change.

If volumes returned to near-normal pre-COVID levels, where does home enrollment registration plateau in your view?

As we said in our prepared remarks, we think this 30% level, slightly plus/minus a point or two, feels right to us. Many accounts appreciate the ability to order things remotely, particularly patients that have had prior studies or exams. I think that this telemedicine trend is here to stay. We’re able to do 100% or very close, to do 100%, so we would be able to sustain our operations in the event of another COVID spike.

And ladies and gentlemen, this concludes our Q&A portion of today's conference. I'd now like to turn the call back over to Mr. Kevin King for any closing remarks.

Thank you, operator. Thank you, everyone, for joining our call today on our Q2 2020 earnings call updates. We appreciate your continued interest and support of the company and continue to wish you great health and safety throughout this period. I look forward to talking to you later. Thank you. Bye-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.