KCI Announces It Will Not Participate in Round One of CMS Competitive Bidding Program
Kinetic Concepts, Inc. (NYSE: KCI), a global medical technology company with leadership positions in advanced wound care and therapeutic support systems, today announced that it will not be a contracted negative pressure wound therapy (NPWT) supplier in phase one of the competitive bidding program administered by the Centers for Medicare and Medicaid Services (CMS). The program covers Medicare home placements in 10 designated metropolitan areas and is scheduled to take effect in July 2008.
“We continue to believe that NPWT has been improperly included in competitive bidding due to a demonstrable lack of comparable or effective alternatives to KCI’s V.A.C.® Therapy system,” said Catherine M. Burzik, President and Chief Executive Officer of KCI. “We believe that the CMS bidding and contracting process does not ensure access to effective NPWT in the home, and Medicare beneficiaries are likely to be harmed as a result.”
The Medicare Modernization Act of 2003 established the competitive bidding program with the express condition that patients should retain access to quality medical devices in the home. Notwithstanding this mandate, CMS has proceeded with NPWT competitive bidding which will result in the loss of access to KCI’s life and limb-saving technologies for those Medicare patients.
To date, approximately 3 million patients have been treated with this technology and there is currently no clinically-proven equivalent to the proprietary foam-based V.A.C. Therapy system. Multiple studies have shown the superior clinical and economic benefits of V.A.C. Therapy, with results of 15 randomized controlled clinical trials published in peer-reviewed scientific journals. Moreover, V.A.C. Therapy is the only NPWT product that has received unique FDA clearances for mechanisms of action, the treatment of specific wound types, and use in the homecare setting.
The Company estimates the revenue impact of the first phase of NPWT competitive bidding in the 10 designated metropolitan areas to be less than 0.5% of KCI’s total estimated revenue for 2008.
About KCI
Kinetic Concepts, Inc. is a global medical technology company with leadership positions in advanced wound care and therapeutic support systems. We design, manufacture, market and service a wide range of proprietary products that can improve clinical outcomes while helping to reduce the overall cost of patient care. Our advanced wound care systems incorporate our proprietary V.A.C.® Therapy technology, which has been clinically demonstrated to help promote wound healing and can help reduce the cost of treating patients with serious wounds. Our therapeutic surfaces, including specialty hospital beds, mattress replacement systems and overlays, are designed to address pulmonary complications associated with immobility and to prevent skin breakdown. We have an infrastructure designed to meet the specific needs of medical professionals and patients across all health care settings including acute care hospitals, extended care facilities and patients’ homes both in the United States and abroad.
Forward-Looking Statements
This press release contains forward-looking statements, including management’s expectations for the impact of the CMS competitive bidding on KCI’s business. The forward-looking statements contained herein are based on our current expectations and are subject to a number of uncertainties. All information set forth in this release is as of May 15, 2008. We undertake no duty to update this information. More information about the company is described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, which are on file with the SEC and available at the SEC’s Web site at www.sec.gov.