NuVasive held a conference call on Monday to address some of the reimbursement questions the company has faced over the past few weeks, concerns that apparently sparked the hammering the company has taken in the public markets. NuVasive's stock has declined 13% over the past month and closed at $31.62 on Tuesday, down 30% from its 52-week high of $45.06.
The sell-off seems to be related to Aetna and United Healthcare deeming the XLIF procedure "experimental" in October and September, respectively, while Cigna released such a decision in 2008. However, management pointed out on the call that similar decisions have been in play since 2007, and the company has consistently worked successfully to help surgeons get reimbursed for XLIF procedures.
The company emphasized a few additional points:
- Surgeons can and should continue coding XLIF as an ALIF; this coding is supported by NASS
- Surgeons are not reporting significant problems getting reimbursed for XLIF
- NUVA is taking steps to clear up questions with payers and address non-coverage decisions
- NUVA is not changing guidance based on this issue
Still, there are some indications that the call may have done little to assuage concerns about reimbursement. The stock failed to rebound following the call, and Tuesday morning JMP Securities downgraded NUVA to Market Perform from Market Outperform. JMP noted that reimbursement may represent a long-term overhang on the stock if additional payers reach non-coverage decisions or require new data to determine or revise payment policies. For a clearer picture into the impact of payer concerns, investors may be waiting for Q409 earnings reports.
