law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or
services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy of health
information in certain circumstances, many of which differ from each other in significant ways and often are not preempted
by HIPAA, thus complicating compliance efforts;|
self-referral laws, such as the Stark Anti-Referral Law, which prohibits a physician from making a referral to a provider
of certain health services with which the physician or the physician’s family member has a financial interest;|
and state Sunshine laws, which require manufacturers of certain medical devices to collect and report information on payments
or transfers of value to physicians and teaching hospitals, as well as investment interests held by physicians and their immediate
family members; and|
pertaining to receipt of CE mark for our products marketed outside of the United States and submission to periodic regulatory
audits in order to maintain these regulatory approvals.|
our operations are found to be in violation of any of the laws described above or any other governmental laws or regulations that
apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, loss of reimbursement for
our products under federal or state government health programs such as Medicare and Medicaid and the curtailment or restructuring
of our operations. Any penalties, damages, fines, curtailment, or restructuring of our operations could adversely affect our ability
to operate our business and our financial results. The risk of our being found in violation of these laws is increased by the
fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open
to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it,
could cause us to incur significant legal expense and divert our management’s attention from the operation of our business.
Moreover, to achieve compliance with applicable federal and state privacy, security, and electronic transaction laws, we may be
required to modify our operations with respect to the handling of patient information. Implementing these modifications may prove
costly. At this time, we are not able to determine the full consequences to us, including the total cost of compliance, of these
various federal and state laws.
policy changes, including legislation enacted in 2010 as well as the potential repeal or amendment of such legislation, may have
a material adverse effect on us.
response to perceived increases in health care costs in recent years, there have been and continues to be proposals by the Trump
administration, members of Congress, state governments, regulators and third-party payors to control these costs and, more generally,
to reform the U.S. healthcare system.
March 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA). Among other things, the law
imposed a tax on medical device manufacturers and producers equal to 2.3% of the sales price for all sales beginning January 1,
2013. This excise tax applies to the majority of our products sold within the United States. Although a two-year moratorium on
the excise tax was enacted for 2016 and 2017, and extended for 2018 and 2019, the tax is currently scheduled to resume collection
on January 1, 2020. We expect that the PPACA could have a material adverse effect on our industry generally and our ability to
successfully commercialize our products or could limit or eliminate our spending on certain development projects.
August 2, 2011, President Obama signed into law the Budget Control Act of 2011, which created the Joint Select Committee on Deficit
Reduction to recommend proposals in spending reductions to Congress. The Joint Select Committee was charged with identifying a
reduction of at least $1.2 trillion for the years 2013 through 2021. The Committee did not achieve this target by the imposed
deadline, triggering the legislation’s automatic reduction to several government programs. Included in the automatic reduction
are aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013.
to, or repeal of, the PPACA, which the administration and certain members of Congress have affirmatively indicated that they will
pursue, could materially and adversely affect our business and financial position, and results of operations. Even if the PPACA
is not amended or repealed, the administration could propose changes impacting implementation of the PPACA, which could materially
and adversely affect our financial position or operations. However, we cannot currently predict the content, timing or impact
that any such future legislation will have on our business.
application of state certificate of need regulations and compliance by our customers with federal and state licensing or other
international requirements could substantially limit our ability to sell our products and grow our business.
states require health care providers to obtain a certificate of need or similar regulatory approval prior to the acquisition of
high-cost capital items such as our Niobe ES system, Odyssey Solution, or Vdrive system. In many cases, a
limited number of these certificates are available. As a result of this limited availability, hospitals and other health care
providers may be unable to obtain a certificate of need for the purchase of our systems. Further, our sales and installation cycle
for the Niobe ES system is typically longer in certificate of need states due to the time it takes our customers to obtain
the required approvals. In addition, our customers must meet various federal and state regulatory and/or accreditation requirements
in order to receive payments from government-sponsored health care programs such as Medicare and Medicaid, receive full reimbursement
from third party payors, and maintain their customers. Our international customers may be required to meet similar or other requirements.
Any lapse by our customers in maintaining appropriate licensure, certification or accreditation, or the failure of our customers
to satisfy the other necessary requirements under government-sponsored health care programs or other requirements could cause
our sales to decline.
or physicians may be unable to obtain reimbursement from third-party payors for procedures using the Niobe or Vdrive
systems, or reimbursement for procedures may be insufficient to recoup the costs of purchasing our products.
expect that U.S. hospitals will continue to bill various third-party payors, such as Medicare, Medicaid and other government programs
and private insurance plans, for procedures performed with our products, including the costs of the disposable interventional
devices used in these procedures. If, in the future, our disposable interventional devices do not fall within U.S. reimbursement
categories and our procedures are not reimbursed, or if the reimbursement is insufficient to cover the costs of purchasing our
system and related disposable interventional devices, the adoption of our systems and products would be significantly slowed or
halted, and we may be unable to generate sufficient sales to support our business. Our success in international markets also depends
upon the eligibility of our products for reimbursement through government-sponsored health care payment systems and third-party
payors. In both the U.S. and foreign markets, health care cost-containment efforts are prevalent and are expected to continue.
These efforts could reduce levels of reimbursement available for procedures involving our products and, therefore, reduce overall
demand for our products as well. A failure to generate sufficient sales could have a material adverse impact on our financial
condition, results of operations and cash flow.