Becker's ASC Review

31 ORTHOPEDICS A new $1B spine company: Inside the Orthofix, SeaSpine merger By Carly Behm S eaSpine and Orthofix entered an agreement to merge, with the deal expected to close in early 2023. Both companies boast emerging technologies in spine and orthopedics, and together they plan to rake in $1 billion in their early years. Six details to know: 1. Orthofix CEO Jon Serbousek said on an Oct. 11 investor call that the merger could put them in "amongst the top tier" of spine and orthopedic devicemakers. In its first three years, the merged entity expects to hit $1 billion in revenue, he said. By 2025, he said he expects gross margins to exceed 70 percent and adjusted EBITDA margins to be in the midteens. 2. Both companies boast strong product portfolios. SeaSpine has the radiation-free Flash imaging system from its $110 million acquisition of 7D Surgical. Orthofix's M6-C artificial cervical disc replacement device will add to SeaSpine's NorthStar posterior cervical fixation system, SeaSpine CEO Keith Valentine said on the investor call. 3. e merged company has ambitions to form one of the industry's broadest biologics portfolio, Orthofix said in an Oct. 11 news release. e combined technologies include CervicalStim bone gra therapy device, the Virtuos Lyogra and the OsteoStrand Plus and OsteoSurge demineralized bone matrix products. 4. A key asset Orthofix brings to the table is its international infrastructure, Mr. Valentine said. Although SeaSpine conducts business primarily in the U.S., Orthofix sees 20 percent of its revenue from international channels. 5. Long before the merger was announced, SeaSpine had grown its foothold in the market, making it well positioned to support Orthofix's portfolio. SeaSpine rebounded from COVID-19 and saw continued year-over-year quarterly growth. In 2020, full- year revenue was $154.3 million, a 3 percent dip. e company recovered from that mild decline quickly in 2021 as it continually beat its year-over-year quarterly revenues. In the first half of 2022, SeaSpine has already surpassed its revenues compared to the same period in 2021. 6. e company will be based in Lewisville, Texas, with additional offices in Carlsbad, Calif., and Verona, Italy, Mr. Serbousek said. n ASC leaders ask CMS to pay separately for different levels of spine procedures By Patsy Newitt O n Sept. 13, the Ambulatory Surgery Center Association submitted comments to CMS on the Medicare 2023 proposed payment rule, including asking that CMS pay separately for different levels of spine procedures. The packaging of different levels for spine codes, the letter reads, impedes Medicare beneficiaries' access to ASCs for procedures with significant device costs. Anterior cervical discectomy and fusion and lumbar spine fusion procedures, for example, involve multiple levels. However, add- on CPT codes — such as implants, hardware and grafts — for these procedures are packaged with no additional payment. Here are the impacted codes: • Allograft CPT codes: 20390, 20931 • Autograft CPT codes: 20936-20938 • Each additional interspace (cervical fusion): 22552, 22585 • Each additional vertebral space (lumbar fusion): 22614 • Instrumentation: 22840, 22842, 22845 • Application of cage: 22853, 22845, 22859 n Orthopedic surgeons at SSM Health resign, plan to start independent group By Carly Behm S everal orthopedic surgeons at SSM Health Dean Medical Group in Madison, Wis. are resigning, saying they want to start an independent practice, the Wisconsin State Journal reported Oct. 25. Most of the resigning surgeons turned in 90-day notices in September, the report said. The Journal didn't specify how many surgeons planned to resign. SSM Health spokesperson Kim Sveum told the publication the resignations were "a fluid situation" and that the health system has the coverage needed for patient care. SSM Health is also recruiting more orthopedic surgeons. Still, some surgeons are remaining with SSM Health. The Journal was unable to reach SSM's orthopedic chair and other orthopedic surgeons. SSM Health acquired Dean Clinic in 2013, the report said. It has locations in Fort Atkinson, Stoughton, Sun Prairie and Waunakee, Wis. n

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