Medtronic Spine has agreed to pay Medicare $75 million to settle a whistleblower lawsuit that claimed that it encouraged physicians to perform the kyphoplasty procedures it supplied components for in hospital inpatient settings, a more costly alternative than clinically appropriate outpatient settings.

According to the U.S. Department of Justice, the Sunnyvale, Calif.-based division, formerly known as Kyphon and acquired by Medtronic last year, created an "aggressive marketing scheme" that promoted its minimally invasive spine products for treating compression fractures as devices for inpatient surgery. The government also alleges that Kyphon paid physicians and hospitals to use its KyphX instruments and bone fillers for Medicare patients in inpatient procedures. As a result, Medicare reimbursed providers and institutions for more expensive procedures over the past seven years.

Medtronic Spine also entered into an agreement with the Department of Health and Human Services to ensure that the company complies with Medicare regulations in the future. The two former Kyphon employees who filed the whistleblower suit in 2005 will share $14.9 million of the settlement amount.

"There's no surprises associated with this resolution," a Medtronic spokeswoman commented in a published report. The Minneapolis-based manufacturer was aware of the lawsuit and the planned settlement, in which it and Kyphon admitted no wrongdoing, before purchasing Kyphon for $3.9 billion.

Kent Steinriede

The preliminary results of a government survey reveal a nearly 70 percent increase in patient visits to outpatient surgery facilities (including ASCs and hospitals) between 1996 and 2006, with the industry's growth concentrated primarily at freestanding ASCs.

Karen Cullen of the National Center for Health Statistics unveiled the early findings of her center's 2006 National Survey of Ambulatory Surgery at the ASC Association's annual meeting in San Antonio this month. The survey is the first of its kind in a decade. Ms. Cullen told ASCA attendees that the results would help them make side-by-side comparisons between their facilities and hospital-based outpatient surgery departments.

The survey's findings, which Ms. Cullen says are subject to change before final results are publicly released this summer, show the number of patient visits to freestanding ASCs rising more than 300 percent between 1996 and 2006. In comparison, hospital-based facilities saw an increase of about 14 percent during the same time. Although a slim majority of outpatient procedures are still performed in hospital settings, the surge in patient visits has allowed freestanding facilities to obtain a much larger portion than they had in 1996.

The survey shows that colonoscopies are currently the most common procedures performed on an outpatient basis. In 1996, cataract removal topped the list.

The National Center for Health Statistics plans to post the survey's final results, including data on patient characteristics and surgical outcomes, on its Web site in August.

Irene Tsikitas

While more than 80 percent of gynecological surgeries and 70 percent of urological surgeries are performed in hospitals, some procedures are becoming more popular in ASCs and office-based facilities, according to a survey by the Millennium Research Group. The worldwide medical information firm suggests this change may result from the recent changes to Medicare's reimbursement structure.

"The reimbursement shift may encourage physician and patient adoption of in-office gynecology or urology procedures, expanding the number of facilities that perform them," says Nadia Lachowsky, an analyst for MRG. "We're planning to run another survey to measure this, but right now it's mainly expectations."

Some of the codes that are more profitable in ASCs, now and following 2011's fully transitioned rates, are:

Procedure	2007 rate	2008 rate	2011 rate
52612 (Prostatectomy, first stage)	$446	$701.91	$1,493.64
52614 (Prostatectomy, second stage)	$333	$623.16	$1,493.64
52647 (Laser coagulation of prostate)	$1,339	$1,472.13	$1,871.50
52648 (Laser vaporization of prostate)	$1,339	$1,472.13	$1,871.50
53850 (Prostatic microwave thermotex)	n/a	$1,871.50	$1,871.50
53852 (Prostatic radio frequency thermotex)	n/a	$1,871.50	$1,871.50
53853 (Prostatic water thermotherapy)	n/a	$1,025.71	$1,025.71
58353 (Endometrial ablation, thermal, without hysteroscopic guidance)	$995.00	$1,018.84	$1,342.37
58356 (Endometrial cryoablation)	n/a	$1,768.23	$1,768.23
58563 (Hysteroscopy with endometrial ablation)	$1,339.00	$1,358.28	$1,416.11

Nathan Hall