Becker's Spine Review

Becker's September 2020 Spine Review

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21 DEVICES & IMPLANTS Aetna, Conformis battle over implant coverage in patient's lawsuit By Angie Stewart A etna is alleging that Conformis joined a patient's denial-of-ben- efits lawsuit to compel coverage of its customized knee implants, which the insurer has deemed "experimental and investigational." Aetna levied allegations of impropriety against Conformis in a July 23 motion to dismiss several counts outlined in a complaint by John Michael Schaub and Conformis. e allegations against Aetna are: • Product disparagement/trade libel • Tortious interference with contractual/business relationship • Unfair trade practices/unfair competition • Failure to pay claim for Employee Retirement and Income Security Act benefits • Violation of fiduciary duties of loyalty and due care • Denial of full and fair review in violation of ERISA Mr. Schaub, a physical therapist assistant diagnosed with osteoarthritis, was scheduled to have a total knee replacement Feb. 18 at the recommen- dation of Boulder (Colo.) Bone and Joint's Michael Wertz, MD. Mr. Schaub and Dr. Wertz chose to move forward with a Conformis implant. Aetna contracts with EviCore Healthcare to handle claims under the plan sponsored by Genesis HCC, Mr. Schaub's employer. Although Louisville, Colo.-based Avista Adventist Hospital, where Mr. Schaub's procedure was scheduled to take place, was believed to be in contact with both Aetna and EviCore in the weeks leading up to his surgery, neither gave any indication "that there was any issue with his choice of knee" until Feb. 10. At that time, Dr. Wertz was notified that Aetna reversed authorization for Mr. Schaub's surgery due to policy No. 0660. is same policy covered Conformis' customized total knee implants for more than seven years be- fore it was revised in September 2018 to deem those implants "experimen- tal and investigational." Aer exhausting "all avenues of appeal" to receive coverage for his knee replacement, Mr. Schaub had the procedure March 19, using the Conform- is implant, Conformis said. He assigned Conformis the right to recover ERISA benefits from Aetna. Additionally, Conformis alleged that Aetna's policy No. 0660 contains "false statements and assertions," making the implant-maker entitled to relief. Aetna, however, claims Conformis has no right to sue under the fed- eral ERISA. "is action is really an attempt by Conformis, a Massachusetts-based medical device manufacturer, to co-opt Mr. Schaub's ERISA denial of ben- efits claim and turn it into a quasi-class action to force Aetna to cover the Conformis custom total knee replacement device on a nationwide basis," Aetna said in its motion to dismiss. "ERISA is a federal statute with the express purpose of creating uniform rules for employee benefit plans; it is not a vehicle by which well-heeled medical device manufacturers can force insurers and ERISA-covered plans to pay for their products." n RTI Surgical sells OEM business for $480M, names new CEO By Alan Condon I n July, RTI Surgical completed the sale of its origi- nal equipment manufacturer business to a private equity firm in a $480 million cash deal. Montagu Private Equity acquired the OEM business, which develops biologic, metal and synthetic im- plants. The OEM business now operates as a stand- alone company and retained the RTI Surgical name. RTI Surgical has rebranded as Surgalign Holdings and President and CEO Camille Farhat retired from the company. It plans to use the capital from the sale to bolster its spine portfolio. Terry Rich, former president of global spine at RTI Surgical, assumed the role as head of the company. Stuart Simpson was installed as chairman of the board of directors as Curtis Selquist stepped down after the transaction closed. n Wishbone Medical acquires 2 spine device companies By Alan Condon O rthopedic implant manufacturer Wishbone Medical has strengthened its portfolio with the acquisition of two spine device compa- nies — Back 2 Basics Direct and Orbbö Surgical in August. The two companies focus on research, develop- ment and commercialization of sterile packaged implants and surgical tools for spinal fusion. Back 2 Basics Direct and Orbbö Surgical represent Wishbone Medical's fifth and sixth acquisitions in the past 18 months. The acquisitions add nine FDA-cleared spinal fusion products to Wishbone Medical's portfolio, which is expected to bring more than $12 million in year one revenue for the company. Twenty spine-focused employees joined Wishbone Medical's global team of 165. n

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