COVERAGE FOR SLEEP APNEA DEVICE WILL GIVE BOOST TO RESTORE MEDICAL, ANALYST SAYS

When the Wisconsin Physician Service (WPS) announced last month it will provide reimbursement for the Pillar procedure in an office setting, device firm Restore Medical's prospects got a little brighter, RBC Capital Markets analyst Phil Nalbone said in a recent research note.

The Pillar procedure is used to treat obstructive sleep apnea (OSA). During the procedure, three tiny woven inserts are placed in the soft palate (the back of the roof of the mouth) to help reduce the vibration that causes snoring and help prevent airway obstruction. The inserts are designed to be invisible and not interfere with swallowing or speech.

"The announcement marks the first positive office-based reimbursement decision for the Pillar procedure from a Medicare intermediary," Nalbone said in his Dec. 20, 2006, note. WPS administers Medicare Part B in Illinois, Michigan, Minnesota and Wisconsin, and has approximately 4.5 million beneficiaries, he said.

The Centers for Medicare & Medicaid Services in September 2006 assigned Restore Medical a new technology ambulatory payment classification designation for the Pillar procedure to treat mild-to-moderate OSA in an outpatient hospital setting.