After Noridian, a Medicare administrator, proposed drastically lowering the physician reimbursement rate for Glaukos' (GKOS) iStent implant, Wells Fargo sees the reduction as unjustified and says there is an 80% chance that Glaukos will be able to overturn the ruling. iStent is a treatment for glaucoma.

NEWS: Noridian proposed reducing the physician reimbursement rate for iStent to $200-$300, effective May 10, versus the current average rate of $800-$900, according to Wells Fargo analyst Lawrence Biegelsen. The reduction would only apply to procedures performed in doctors' offices and would not apply to procedures performed in facilities, he wrote. The decision was based on the lower cost of another procedure performed on glaucoma patients, called laser trabeculoplasty, the analyst stated. However, the "comparison is incorrect," given the differences between the procedures, Biegelsen believes.

OUTLOOK: There is an 80% chance that Glaukos will be able to overturn Noridian's ruling, the analyst stated. However, he expects the physician reimbursement rate to "ultimately be closer to $500-$600." RATING: Biegelsen kept an Outperform rating on Glaukos.

PRICE ACTION: In early trading, Glaukos fell 6% to $44.95 per share.