Orthovita, Inc. (NASDAQ: VITA), an orthobiologics and biosurgery company, notes that on May 5, 2011, Noridian® Administrative Services, LLC (Noridian) published a Part B Future Local Coverage Determination (LCD) covering percutaneous vertebroplasty and percutaneous vertebral augmentation when medical record documentation supports that the procedure is conducted in accordance with the clinical and procedural criteria established in the literature produced in recent years. The revision is effective June 20, 2011 and provides for continued reimbursement of physician fees for vertebroplasty and vertebral augmentation procedures related to vertebral compression fractures. Cortoss? Bone Augmentation Material, Orthovita's novel biomaterial approved and launched in the U.S. in 2009, is indicated for use in vertebroplasty and vertebral augmentation.

Noridian is the Centers for Medicare & Medicaid Services' Part B Medicare Administrative Contractor in jurisdiction 3, covering Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming, and is the Part B carrier in Alaska, Oregon and Washington. After The New England Journal of Medicine published two articles in August 2009 that questioned the effectiveness of vertebroplasty for painful osteoporotic compression fractures, Noridian announced Part A and Part B Future Draft LCDs in May 2010 that considered not covering vertebral augmentation procedures, including kyphoplasty, and invited comments from affected and interested parties. The Part A LCD covers reimbursement for the hospital or facility, and the Part B LCD covers reimbursement of physician fees. After reviewing the literature and over 100 comments, the Part B Future LCD was published last week and outlined the indications and limitations of coverage and medical necessity, including medical record documentation support necessary for coverage. The review period for the Part A Draft LCD, which is identical to the Part B Final LCD, expires June 20, 2011.

Key points in the Part B Future LCD include:

  • No clear evidence demonstrates that one procedure (vertebroplasty or vertebral augmentation, including kyphoplasty) is different from another in terms of short- or long-term efficacy, complications, mortality, or any other parameter useful in differentiating coverage.
  • Coverage is limited to no more than three vertebral levels on any date of service.
  • The pain must be significant, interfere with activities of daily living, and be unresponsive to appropriate doses of an appropriate analgesic for a reasonable amount of time.
  • The healthcare provider's detailed medical assessment of the patient must be appropriately documented.
  • The presence of one or more vertebral compression fractures, confirmed by such means as x-rays or MRIs, and that the patient's pain is predominantly, if not solely, related to the demonstrated fractures, must be appropriately documented.
  • The medical record must document that reasonable follow-up for the patient is arranged for by the operating provider for at least one year. The medical record must contain evidence of follow-up assessment of the patient at one month postoperatively and on an at least every-three-month basis for the first year following treatment and must contain patient comfort/activity/pain scores for each of those visits.
  • Coverage under the Future LCD will be maintained for a maximum three-year period. If relevant clinical outcomes data collected during this period warrants expansion or narrowing of coverage, Noridian may modify the LCD at the end of the three-year period.

The full Part B Future LCD is available at: http://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=24383&ContrNum=03102. The Part A Draft LCD is available at: http://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=32021&ver=3.

"Vertebroplasty and vertebral augmentation procedures will continue to be covered by Noridian for patients with significant, proven fracture-related pain who have failed appropriate analgesia for at least a few days. There is no prescribed period of time for conservative therapy prior to a procedure, which ensures that affected patients who do not respond will not have to suffer unnecessarily. The decisions leading up to the procedure, the procedure itself, as well as the patient follow-up results, need to be well documented. In my opinion, this guidance is balanced and fair and reflects good medical care," said Dr. Maarten Persenaire, Chief Medical Officer of Orthovita. "It also is our understanding," Dr. Persenaire added, "that many specialists have already adopted these practices."

"This decision removes some of the uncertainty surrounding this market since the publication of the NEJM articles in August 2009, which coincided with the U.S. launch of our Cortoss? product," Antony Koblish, President and CEO of Orthovita commented. "We anticipate that the Final Part A LCD will be published shortly after the end of the comment period and be identical to the Final Part B LCD just published. We also believe that the new rules announced by Noridian will stimulate future research in both new and improved materials and techniques, and in identifying those patients who are most likely to benefit from the procedures. In this regard, Cortoss? is the first FDA-cleared alternative to polymethylmethacrylate (PMMA) and has been shown to improve clinical outcomes in a direct comparison. Other local Medicare contractors and private payers may offer their own assessments over time. Assuming that their reimbursement decisions will follow the positive precedent set by Noridian, we anticipate that the vertebral compression fracture market will become more receptive to our Cortoss? product over time as market dynamics and conditions improve."

About the Company

Orthovita, Inc. is a specialty spine and orthopedic company with a portfolio of orthobiologic and biosurgery products. Our products are based on novel and unique proprietary biomaterials that have innovative mechanisms of action in the body. Our orthobiologic platform offers products for the fusion, regeneration and fixation of human bone. Our biosurgery platform offers products for controlling intra-operative bleeding, also known as hemostasis. Our current fusion and regeneration products are based on our proprietary VitossTM Bone Graft Substitute technology and address the non-structural bone graft market with synthetic, bioactive alternatives to patient- and cadaver-derived bone tissue. CortossTM Bone Augmentation Material, an injectable, polymer composite that mimics the mechanical properties of weight-bearing human cortical bone, provides the basis for our fixation portfolio. Our hemostasis portfolio includes VitagelTM Surgical Hemostat, a proprietary, collagen-based matrix that controls bleeding and facilitates healing, and Vitasure? Absorbable Hemostat, a plant-based product that can be deployed quickly throughout surgery.

Disclosure Notice

This press release contains forward-looking statements regarding Orthovita's current expectations of future events that involve risks and uncertainties, including, without limitation, demand and market acceptance of Cortoss and our other products, future reimbursement coverage decisions relating to procedures in which our Cortoss product is indicated for use, the ability of our sales force to market Cortoss, and other aspects of our business. Such statements are based on management's current expectations and are subject to a number of substantial risks and uncertainties that could cause actual results or timeliness to differ materially from those addressed in the forward-looking statements. Factors that may cause such a difference are listed from time to time in reports filed by the Company with the U.S. Securities and Exchange Commission (SEC), including but not limited to risks described in our most recently filed Form 10-K under the caption "Risk Factors," as well as other matters such as our ability to manufacture sufficient quantities of Cortoss to meet demand for the product. Further information about these and other relevant risks and uncertainties may be found in Orthovita's filings with the SEC, all of which are available from the SEC as well as other sources. Orthovita undertakes no obligation to publicly update any forward-looking statements.

Orthovita, Inc.
Nancy C. Broadbent
Senior Vice President and Chief Financial Officer
610-640-1775 or 800-676-8482