The New York Times has joined a chorus of concern over the 510(k) process, suggesting in an article yesterday that 510(k)s are outdated (FDA device laws were passed "when devices played a much smaller role in medicine") and allow new... more
The Wall Street Journal this morning revealed a new variation on medical tourism: patients are traveling for medical procedures, though not overseas. Medical tourism arose from skyrocketing U.S. healthcare costs; a hip replacement can cost $43,000 domestically and a mere... more
Earnings Kensey Nash reported FQ4:08 revenues of $22.0, representing a 29% increase over FQ4:07 and beating estimates by $1.0 million. Biomaterials were up 37% to $13.3 million, which was attributed to strong growth in the orthopedic and cardiovascular product lines.... more
CMS released a list last week of 19 potential topics for National Coverage Decisions. These topics include a number of orthopedic devices: Artificial cervical discs Bone morphogenetic protein Hip resurfacing Vertebroplasty and kyphoplasty Lumbar fusion for degenerative disc disease As... more
Earnings Anika Therapeutics reported 2Q:08 revenue of $8.38 million, representing a 32% increase over 2Q:07 but missing estimates by $0.4 million. The company attributed sales growth to the strength of the Orthovisc line. Net income for 2Q:08 was $0.81 million,... more
CMS proposed a national non-coverage decision for intradiscal electrothermic therapy (IDET), saying there is insufficient evidence that the procedure improves outcomes in the Medicare population. IDET is a minimally-invasive treatment for low back pain where a catheter and a heating... more
Earnings Biomet reported FQ4:08 revenues of $635.6 million, an increase of 16% (10% constant currency) over the year-ago period. Sales increased 10% in the U.S and 24% (11% constant currency) OUS. Recon sales increased 17% worldwide (12% constant currency) to... more
This year's saga of Medicare reimbursement cuts seems to be heading for a happy ending this week, as the Senate voted yesterday to block the scheduled 10.6% cut to payments (reversing a determination from several weeks ago that the cuts... more
Despite threats of a presidential veto, the House resoundingly passed a bill Tuesday blocking a 10% cut in Medicare’s reimbursement payments to physicians. In addition to protection against the cut, which was scheduled to take effect July 1, the bill... more
In Switzerland, more than 135 surgeons are contributing data to a newly-implemented spine registry, reporting cost, efficacy and performance information on cervical and lumbar total disc arthroplasty and kyphoplasty procedures. The Swiss government started the program in December 2007 to... more
Hoping to "align financial incentives" between hospitals and physicians, CMS announced plans for an Acute Care Episode (ACE) demonstration that will feature bundled payments for the treatment of certain orthopedic and cardiac patients. CMS argues that bundling, compared to paying... more
Health Affairs recently reported on health spending projections through 2017, and the next decade is characterized by steady growth and a particular strength in public spending as baby boomers begin to enroll in Medicare. Health spending is reported to have... more
Earnings Biomet reported FQ3:08 net sales of $603.1 million, a 14% increase over the year-ago period. Excluding the impact of foreign currency, net sales increased 10%. U.S. revenue was $351.6 million. Adjusted net income for the third quarter was $25.2... more
On Friday, CMS released its draft 2009 Inpatient Prospective Payment System, and the document indicates significant payment increases for orthopedic procedures. The rate at which the payments are increasing is also up when compared to 2008. Per the proposal: -Spine... more
A new report from the Institute of Medicine (IOM) calls the U.S. healthcare system unprepared for the aging of baby boomers, citing a lack of trained healthcare workers and few economic benefits to treating geriatric patients. Medicare will begin to... more
CMS is currently transitioning to a pay-for-performance system, with payments based on quality and efficiency metrics, according to comments made by CMS Chief Medical Officer Barry Straube and first reported by FDAnews. Straube added that voluntary reporting of quality measures... more
Earnings ArthroCare reported 4Q:07 revenues of $87.5 million, beating estimates by $1.7 million, representing a 25% increase over the year-ago period. Net income was $14.5 million, or $0.50 per diluted share, missing estimates by a penny and representing a 78%... more
Last week ArthroCare announced a $25 million deal to acquire DiscoCare, described in the press release as a "medical billing and reimbursement service provider." Specifically, DiscoCare provides reimbursement assistance to physicians using Arthrocare's plasma disc decompression (PDD) device; though it... more
Last week we among more than 75 attendees at MDMA's 10th Annual Reimbursement Conference, where topics included establishing a comprehensive reimbursement strategy, updates from CMS and advice on complying with fraud and abuse regulations in consultant relationships. One of the... more
The July U.K. edition of JBJS reported results of a study evaluating the impact of the U.K.'s National Institute for Health and Clinical Excellence (NICE) guidelines for hip replacements. NICE publishes guidelines to promote "good health and the prevention and... more
Earnings BioMimetic Therapeutics reported a 2Q:07 net loss of $6.4 million, or $(0.35) per share, beating estimates of $(0.39) per share and improving from a net loss of $3.9 million, or $(0.42) per share, in 2Q:06. 2Q:07 Revenues were $0.5... more
CMS released its final decision on lumbar artificial disc replacement (LADR) procedures yesterday. As we predicted, the final decision does not deviate from the proposed decision, with CMS finding that LADR is not reasonable and necessary for the Medicare population... more
Earnings Large Joint: Exactech announced 2Q:07 revenue of $31.6 million, beating estimates of $29.9 million and up 19% from the comparable quarter. CEO Bill Petty attributed the growth to "acceptance of our new products and continuing success of our products... more
CMS released its final rule for the FY2008 Inpatient Prospective Payment System (IPPS). As we noted when the draft rule was announced in April, ortho payments will mostly increase next year. The rule also confirms that CMS will implement new... more
Earnings Stryker reported revenues of $1.46 billion, beating estimates of $1.44 billion and increasing 16% from $1.26 billion in 2Q:06. 2Q:07 earnings were $269.1 million, or $0.65 per share, beating estimates of $0.61 and up from $0.52 in the comparable... more
On Monday, CMS released a brief Decision Memo on changes to the agency's Clinical Trials Policy. The proposed decision was first announced in April and followed by a public comment period. The memo notes two important changes. One, the final... more
The week prior to the 4th, we attended the Spine Technology Education Group meeting in Los Cabos, Mexico, which addressed numerous topics on innovative techniques in spine surgery. Kudos to Drs. Phillips, Albert and Vaccaro for organizing a meeting that... more
Regulatory CMS released a proposed non-coverage decision for lumbar artificial disc replacements following a review of Synthes' Pro-Disc-L. The agency found that LADR is not reasonable and necessary for Medicare recipients over 60 based on lack of relevant data and... more
At the end of Friday, CMS published a sweeping proposal that denies coverage for all lumbar artificial discs in the age 60-and-over Medicare population. The proposal can be found here on the CMS website. Falling into line with its previous... more
Earnings Stryker announced 1Q:07 earnings on Wednesday. Net income increased to $243.5 million, or $0.59 per share, beating analysts' estimates of $0.58 per share. In the comparable quarter, net income was $147.5 million, or $0.36 per share. Revenues increased 13%... more
Late Friday, the Centers for Medicare and Medicaid Services (CMS) released the proposed 2008 Inpatient Prospective Payment System (IPPS) under which US hospitals are reimbursed under the DRG codes. As with prior years, this release is a draft statement and... more
The Lehman Brothers medical device research team had a fruitful visit to the beltway last week notably with Steve Phurrough, Director of the Coverage and Analysis Group at CMS and Herb Khun, CMS's Deputy Administrator. One of Lehman's findings related... more
This afternoon MDMA held its monthly call, outlining policy changed that are on the horizon for 2007. We've outlined some of their comments below: MDUFMA Negotations for MDUFMA II have been ongoing since February of 2006. The FDA has recently... more
In October we reported that Genzyme, maker of the viscosupplement Synvisc, announced a CMS decision grouping all industry viscosupplementation products into the same reimbursement code in January 2007. The coding change meant that reimbursement for viscosupplementation treatments will be based... more
Yesterday we attended the the Medicare Coverage Advisory Committee (MCAC) meeting on spinal fusion at the Centers for Medicare and Medicaid Services (CMS) in Baltimore, MD. The purpose of the meeting was to determine the type of data needed to... more
The first arm of the Spine Patients Outcome Research Trial ("SPORT") study was released by the Journal of the American Medical Association yesterday. The $13.5 million NIH funded SPORT study has been designed to determine the efficacy of spine surgery... more
Last week we attended the 9th Annual MDMA Coverage Reimbursement and Health Policy Conference in Washington D.C. As we've previously discussed, the MDMA events are a terrific opportunity for small- to medium-sized device companies to network, provide insight on topical... more
Earnings Biologics: Orthovita reported 3Q:06 product sales came in at $11 million, up 32% compared to 3Q:05. Net loss for the quarter was $3.7 million, or a loss of $0.07 per share. The Company beat analysts' EPS estimates by $0.02,... more
In a press release yesterday, Genzyme, maker of Synvisc, announced a CMS decision that would group all viscosupplementation products into the same reimbursement code in January 2007. The company stated that they would fight hard to dispute this decision (through... more
In the wake of demands for increasing clinical volume, decreases in physician income and increasing malpractice costs, it is even more critical to incentivize physicians to perform academic activities that do not directly generate revenue (teaching, research and service) but... more
Fact: GPO-negotiated contacts drive more than $100 billion in device purchases by hospitals. News Item: The DOJ, the Connecticut Attorney General, three U.S. Senators, and the New York Times call for GPO reform. Takeaway: GPO market reform will change your... more
In an email to his staff today, Mark B. McClellan, MD, PhD, Administrator of the Center for Medicare and Medicaid Services (CMS) since March 2004 announced that he will be leaving CMS by early October. Dr. McClellan did not announce... more
This week CMS proposed a 5.1% reduction in payments to physicians for 2007. The proposal will impact the 875,000 doctors who care for the elderly and disabled in the US. The explanation for the cut is that spending on physician... more
Earnings: Biologics: IsoTis OrthoBiologics reported 2Q:06 revenue of $10.8 million, up 43% compared to $7.5 million in 2Q:05. Its U.S. division grew 22%, while international revenues grew 39%. The Company has three distribution channels: U.S. independent agents, international distributors and... more
As we have previously discussed in several posts, since April the Center for Medicare and Medicaid Services (CMS) has planned to release new Inpatient Prospective Payment System (IPPS) regulations for FY 2007. Late Tuesday CMS issued this much-anticipated IPPS rule,... more
As we have previously discussed, the US government for some time has been under pressure to adopt international coding standards that have been used by many other countries for over a decade. Finally, last Thursday Congress passed legislation ensuring that... more
The Centers for Medicare & Medicaid Services (CMS) will make its final ruling on the proposed changes to the Inpatient Prospective Payment System (IPPS) on August 1st, 2006. The proposed changes, to be implemented by FY 2008, are the first... more
The International Classification of Diseases (ICD), which is overseen by the World Health Organization, is the international standard diagnostic classification for all general epidemiological and many health management purposes. ICD-10 was adopted in the US in 1999 for reporting mortality,... more
On June 14th and 15th, we attended the Medical Device Manufacturers Association (MDMA) Annual Meeting. The organization provides medical device entrepreneurs an opportunity to have their voices heard on the hill. Innovation in our industry generally comes from the smaller... more
The Hill, "The Newspaper for and about the U.S. Congress", posted on its website last week a list of 14 top medical device industry lobbyists. Leading this list is Stephen Ubl, who is seen as "a triple-A superweight." Newly appointed... more
Appointment: IsoTis OrthoBiologics appointed Barbara Boyan to its Board of Directors. Ms. Boyan is a co-founder of OsteoBiologics, Inc. (OBI) and a professor in the Wallace H. Coulter Department of Biomedical Engineering at the Georgia Institute of Technology and at... more
Pay for performance (P4P) comes up over and over again in reimbursement discussions. In the May 2006 edition of Orthopedics Today, there is an in-depth review of what hospitals, surgeons and other stakeholders should know about P4P. As a reminder,... more
In a surprising but welcome change of heart, the Centers for Medicare and Medicaid Services revised its proposed National Noncoverage Decision and will reimburse the Charite in specific circumstances. In the February draft of the NCD, CMS proposed national noncoverage... more
The Medicare trust fund will be exhausted in 12 years, according to the trustees' annual report released yesterday. This is two years earlier than the results published a year ago. The cited causes of reduced funding are not unfamiliar-- rising... more
[Editor's note: We welcome regulatory expert Martin Gold as a guest blogger. See his profile here.] The recently published proposed change in inpatient Medicare payment is expected to have a significant financial affect on hospitals that specialize in cardiac and... more
Last week The Centers for Medicare & Medicaid Services (CMS) issued a report on a revised proposed rulemaking of the Inpatient Prospective Payment System (IPPS). The proposed rule highlights changes and updates for Diagnosis Related Groups (DGRs) in orthopedic surgeries:... more
The U.S. International Trade Commission (ITC) issued a press release yesterday announcing the launch of a fact-finding investigation into conditions affecting U.S. trade of medical devices and equipment in principal foreign markets, particularly the Japanese market. The House Ways and... more
Any microeconomics 101 course worth its salt will try to provide examples of market failure. The most potent market failure arguments can tied to real world problems of information economics where one of the more famous examples used is "adverse... more
One of the most informative sessions at AAOS was a section of the Health Policy Update Symposium delivered by William L. Healy, M.D. of the Lahey Clinic. Healy gave real-life examples of the complicated and delicate balance of hospital economics,... more
The Centers for Medicare and Medicaid Services published a Proposed Decision Memo for Lumbar Artificial Disc Replacement. Their conclusion: The Centers for Medicare and Medicaid Services (CMS) is seeking public comment on the proposed determination that the evidence is not... more
Since 2003, there has been a moratorium on new construction of physician-owned specialty hospitals. The ban was continued after its first 18 month term, and now it has been renewed for a second time. In the "Deficit Reduction" bill that... more
The rising cost of health insurance is a significant issue in the United States. Roughly 45 million people are uninsured and Medicare and Medicaid are chronically under funded. Private insurance has become big business and spending has risen faster than... more
Due to last week's Merrill Lynch investor conference (subscription may be required), investors have regained confidence in the orthopedic sector after the industry faced some hurdles within the past few months. In our HealthpointCapital Weekly Valuation Index, P/E (price-to-earnings) jumped... more
Last week, Merrill Lynch hosted its Med Tech Fundamentals Conference. One noteworthy session was the Reconstructive Orthopedics Panel. Participants were an industry "Who's Who": the CEO of Biomet, Chairman of Depuy (J&J), President of Smith and Nephew Orthopaedics, CEO of... more
Last week, we attended the 8th Annual Coverage and Reimbursement Conference in Washington, DC organized by MDMA, the Medical Device Manufacturers Association. Here's what we learned: Mark Miller, PhD., MedPAC Executive Director, talked about MedPAC recommendations to Congress to optimize... more
We wrap up this quarter with aggregated earnings and sales in the public orthopedic sector of $560 million and $5 billion, respectively, as a few more companies reported this week. For 3Q:05, orthopedic sales were up by 13% ($5.0 billion... more
Earlier this morning Kyphon (Nasdaq: KYPH) shouted from the mountaintop: CMS has posted new CPT codes for Kyphoplasty which effectively brings reimbursement to a national level. The codes include percutaneous vertebral augmentation, RVUs for additional thoracic of lumbar vertebral bodies,... more
Ten days ago California's Blue Cross and Blue Shield met and, based on the available evidence, decided they would not cover artificial disc replacements at this time. Some interesting technical discussions are posted here: Blue Cross Blue Shield April 2005... more
One of the leaders in this emerging meniscus repair market is ReGen Biologics. We recently had a chance to do a catch up with Gary Bisbee, CEO of ReGen Biologics who we interviewed last year. Disclosure: Individual members of HealthpointCapital,... more
The fate of specialty hospitals is an important topic for the orthopedic and cardiology industry because so many U.S. specialty hospitals are either orthopedic or cardiology-focused and their economic survival depends upon favorable reimbursement. On September 30th, we participated with... more
By Kelli Hallas Vice President of Field Reimbursement Services Emerson Consultants, Inc. [Editor's note: We welcome consultant Kelli Hallas as a guest blogger. See a profile of Emerson Consultants, Inc. here.] Last month CMS issued a National draft non-coverage decision... more
We participated in a Deutsche Bank-hosted conference call with Edward Rozynski, formerly an international pricing and reimbursement expert with AdvaMed, and currently an independent advisor on international market access for medical device companies. The most interesting part of the discussion... more
As discussed in Barb Peterson's guest blog, the Centers for Medicare and Medicaid Studies (CMS) received a letter from an internist and Professor of Medicine at Washington University, Dr. Richard Deyo, requesting a National Coverage Determination (NCD) of the Charite... more
[Update: We're moving this entry to the top of the blog since it is sparking a lot of interest from our readers.] more
There is no denying that healthcare costs continue to accelerate in the U.S. We would argue most of these costs are justified given the continuing technological advancements made within the entire healthcare arena including medical devices and biotechnology. However, we... more
By Kelli Hallas Vice President of Field Reimbursement Services Emerson Consultants, Inc. [Editor's note: We welcome consultant Kelli Hallas as a guest blogger.] In order for new technologies to receive reimbursement in today's healthcare market, they must show substantial clinical... more
This week we finish off the first half of 2005 reporting season with 17 orthopedic companies* released their financial numbers. In 2Q:05, in an aggregated total, orthopedic revenues increased 16% ($3.8 billion vs. $3.2 billion) and a 25% increased in... more
In an unambiguous statement yesterday, CMS took a hard line and denied add-on payments for J&J's Charite artificial lumbar disc. In this document on pages 309 - 322, CMS balanced numerous comments, studies and outcomes against each other and came... more
Greetings from the SG Cowen and ISI Health Care Policy Conference in Washington D.C. It's been a full day covering Medicare, Medicaid, FDA, Specialty Hospital Policy and Gainsharing. We've heard from Representative Pete Stark (D-CA) and Senator Debbie Stabenow (D-MI),... more
This morning Orthofix announced that Centers for Medicare & Medicaid Services (CMS) approved the Company's request to modify its coding mechanisms to include specific coding for hospital procedures utilizing external fixation devices. As of October of this year, facilities will... more
Reimbursement is one of those issues you might wish would go away. Bureaucratic, jargon-heavy, inefficient, not easy to learn, and mostly boring. For everyone who knows that it can't be ignored -- because 90% of device revenue flows through the... more
Center for Medicare and Medicaid Services (CMS) released its 2005 proposed payments for inpatient procedures on May 18th/2004. CMS is calling for a 2% increase in DRG 209 payments bringing the total payment to $10,034 up from $9,839 the year... more
Osteotech is in the midst of a significant turn-around year with sales expected to reach or exceed $96 million and for cash flow (defined as EBITDA) to clear $23 million. This stands in contrast to last year's $83 million in... more
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