{ "docId": "019dd923-622c-750b-8b9a-40e2965928db", "docSlug": "e5bffbaac707", "documentTitle": "TransMedics (TMDX)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-01-10 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 25, "pageCount": 342, "prevPage": 24, "nextPage": 26, "slideType": "villain_critique", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a 'villain critique' approach to frame the company's business model as a 'government pay scam'.", "elementsJson": [ "paragraph", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-40e2965928db/25", "deckHref": "/decks/019dd923-622c-750b-8b9a-40e2965928db", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-40e2965928db.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-40e2965928db#slide-25", "components": [ { "bbox": { "h": 0.08, "w": 0.85, "x": 0.07, "y": 0.83 }, "kind": "callout", "text": "CEO openly promotes the Medicare loophole\n“Waleed will talk about it all the time. If you listen to any of his investor calls, he will talk about how Medicare pays the cost. What are you guys worried about?..” – Former executive in a key reimbursement role", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "376ce54d-cbfc-4187-a557-e429192b633f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.85, "x": 0.07, "y": 0.62 }, "kind": "callout", "text": "Medicare Cost Report structure explanation - “it’s totally crazy”\n“In the Gosar letter, it talked about overcharging. And going back to what the CEO would want to hide - reimbursement for organ acquisition, which OCS falls squarely into. The way the structure - it’s totally crazy....all of the costs to procure an organ, as long as they are reasonable and necessary, they go on the organ transplant worksheet or organ procurement worksheet on what’s called the Medicare Cost Report, which is an annual filing and every hospital in the country does whether they’re a transplant program or not because that program has a specific worksheet that lists all of the costs of what they incurred to procure the organ. And that is paid at cost plus the overhead rate that varies between 17-25%, depending on the hospital. So, everything they spent—so if they pay for an OCS system on the NOP with the flight, then all of those costs get paid at cost plus back to the hospital…” – Former executive in a key reimbursement role", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a1cfcfd1-bc72-4878-b9fa-a82182491efc", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Perverse incentives are central to understanding TransMedics business model. It exists solely as a creature of a preposterous Medicare reimbursement loophole unique to transplants – which regulators are racing to kill off, unbeknownst to bulls, taking TransMedics down with it.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-5372-7340-8f9a-7628967eccbd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.85, "x": 0.07, "y": 0.31 }, "kind": "paragraph", "text": "Medicare reimburses transplant centers for all reasonable and necessary organ acquisition charges, which are rolled up into each center’s Medicare Cost Report. The rub: organ acquisition charges - which include TransMedics device and NOP fees - have no cap, as “reasonable” is undefined.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0581c9a5-9ed3-425e-adc0-1e2d6b2e7c9a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.85, "x": 0.07, "y": 0.25 }, "kind": "paragraph", "text": "Private payor coverage is almost non-existent, as they’re in on the joke. TransMedics is thus entirely a government pay scam - just like $10K toilet seats.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1d5866f1-26d5-433c-80b9-75481f0f0dbd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.85, "x": 0.07, "y": 0.15 }, "kind": "paragraph", "text": "It exists solely as a creature of a preposterous Medicare reimbursement loophole unique to transplants – which regulators are racing to kill off, unbeknownst to bulls, taking TransMedics down with it.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e0f9eb3b-4c3d-42ca-86f0-f4cb895e1b6a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.85, "x": 0.07, "y": 0.41 }, "kind": "quote", "text": "An ex-TransMedics reimbursement executive detailed the nuances: “the structure - it’s totally crazy...if they for pay for an OCS system on the NOP with the flight, all of these costs get paid at cost plus back to the hospital”; “Waleed will talk about it all the time...his investor calls...he will talk about how Medicare pays the cost...what are you guys worried about?”", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "874f3943-3207-47cd-ac4b-879ebf451e49", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "the structure – it’s totally crazy...if they for pay for an OCS system on the NOP with the flight, all of these costs get paid at cost plus back to the hospital; Waleed will talk about it all the time...his investor calls...he will talk about how Medicare pays the cost...what are you guys worried about? — Former executive in a key reimbursement role", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-5372-7340-8f9a-7944dedf6c6c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.07, "y": 0.95 }, "kind": "source-note", "text": "Source: Scorpion Capital consultation calls with experts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "87f51b96-c9b5-4341-88d6-6f71c94ad218", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.85, "x": 0.07, "y": 0.07 }, "kind": "title", "text": "Perverse incentives are central to understanding TransMedics business model.", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "982adccf-b075-4868-a2f7-0a2d54b07043", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "81ca706a-0a78-4c78-8899-9d9eed426925", "evidence": "The slide frames the business model as a 'government pay scam' and 'loophole' to be exposed.", "confidence": 0.9 } ], "arcBeats": [ { "to": 30, "from": 12, "beatId": "072007ec-5fd3-4416-b852-0e181a364efd", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Exposure of Contradictions", "beatSlug": null, "evidence": "The section highlights contradictions in TransMedics Group Inc.'s statements and actions.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }