HOUSTON (CN) - A Texas Medicare administrator is wrongly denying coverage for a procedure to relieve pain from spinal stenosis, a medical device-maker claims in court.
Vertos Medical sued Novitas Solutions in Federal Court.
Vertos, based in Orange County, Calif., calls its invention the mild procedure.
It says it developed the procedure to treat lumbar spinal stenosis, or narrowing of the spinal column, using a proprietary kit of surgical devices, whose sales account for 100 percent of its revenue.
"Lumbar spinal stenosis is a source of low back and leg pain; the condition results from the narrowing of the central lumbar canal," the complaint states. "This canal narrowing causes pain when it squeezes or compresses the nerve roots that run through the canal. Regrettably, the condition is widespread, serious, chronic, and progressive.
"Historically, the treatment options for this condition were limited to invasive surgical procedures; for an example, laminectomy, bilateral laminectomy, and spinal fusion.
"Vertos' mild is a ground-breaking treatment option that is less invasive and less costly than traditional surgeries.
"A physician performs the mild procedure through either one or two, depending on the patient, incisions in the back that are about the size of a baby aspirin.
"Imaging guides this targeted procedure for removing bone that is compressing the nerves with a minimum disruption of muscle and skeletal tissues. It is normally an outpatient procedure, performed under local anesthesia, and the surgical 'wound' can be closed with a band aid.
"FDA cleared the surgical kit for mild in February 2010, finding it safe and effective for the procedure."
Vertos says Texas' current Medicare administrator TrailBlazer Health Enterprises "previously published a Local Coverage Determination ('LCD') that denied Medicare coverage for mild throughout the State of Texas."
But after a Medicare recipient challenged the denial, Vertos says, TrailBlazer revised its rules to include coverage for the procedure, and has been routinely paying for it since May 2012.
But Novitas, which is replacing TrailBlazer as Texas' Medicare administrator, "has announced its intention to issue a non-coverage LCD that is materially identical to the TrailBlazer LCD policy that was challenged and revised," the complaint states.
Vertos says it had to sue in Federal Court because the Medicare system denies it the right to judicial review.
Vertos touts the procedure on its website as minimally invasive surgery that can be performed in less than an hour, allows patients to return home the same day, and return to work in a few days.
It says denying coverage for the procedure will devastate its business.
"The mild devices constitute 100 percent of Vertos' revenue, and the vast majority of mild patients are Medicare beneficiaries," the complaint states. "As a result, wrongful Medicare denials result in a significant loss of revenue to Vertos, potentially exceeding millions of dollars.
"Novitas' non-coverage LCD completely denying Medicare coverage for the state of Texas multiplies this problem by eroding investor confidence.
"Vertos' future is tied to investor confidence. ... The arbitrary and capricious reversion by Novitas to a non-coverage LCD imminently threatens the loss of the more than $46 million dollars current investors have made to successfully develop and commercialize mild.
"The potential combination of Vertos' loss of revenue and loss of investors would cripple Vertos."
Vertos seeks writ of mandamus and injunctive relief requiring Novitas to keep paying for the procedure when medically appropriate.
It is represented by Jack Urquhart with Beirne, Maynard & Parsons in Houston.
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