UPDATE 2-CardioNet shares fall on CMS reimbursement concerns

* CMS proposes reimbursement rate to remain carrier-priced * Shares down as much as 20 pct (Adds analyst comment, updates stock movement)

June 28 (Reuters) - CardioNet Inc (BEAT.O), which is trying to obtain a national reimbursement rate for its services, said it was disappointed after the U.S. agency for healthcare reimbursement recommended that payment amounts for the company's services would continue to be decided by local contractors in 2011.

The company said the Centers for Medicare and Medicaid Services proposed to keep pricing for CardioNet's mobile-cardiovascular telemetry services at their carrier-level for 2011.

Carrier-priced means the local Medicare contractors will establish payment amounts for the services, in their region.

"In our view MCOT is still too young, and its user base too fragmented, for CMS to establish a national pricing scheme," Brean Murray Carret & Co analyst Jose Haresco said.

The analyst, who has a "buy" rating on the stock, cut his price target on the stock to $10 from $15 and said the CMS decision may maintain a status quo for CardioNet.

Haresco, however, said a national pricing scheme could be appropriate in another year or two.

The proposed rule release is followed by a public comments period that will culminate in CMS' final rule.

The final rule is expected by Nov 1, for implementation on Jan 1, 2011, the company said.

CardioNet -- a maker of technology to diagnose and monitor heart rhythm disorders -- said it plans to request the CMS to change its recommendation.

Shares of CardioNet were trading down 11 percent at $6.37. They had earlier touched a low of $5.76 Monday on Nasdaq. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Jarshad Kakkrakandy)