Arthrocare Device Use Draws More Scrutiny
OKLAHOMA CITY -- An escalating FBI probe could pose new threats to embattled Arthrocare (ARTC).
This month, the National Insurance Crime Bureau issued an alert to Florida insurers about a mounting FBI investigation into minor -- but lucrative -- surgeries that often require one of Arthrocare's most popular devices.
Moreover, sources say, a federal grand jury is preparing to examine the matter as well.
Sales of Arthrocare's popular Perc-D SpineWands, which have fueled the company's explosive growth in recent years, could suffer as a result.According to the NICB alert, FBI officials in West Palm Beach, Fla. are seeking information about "percutaneous discectomy" surgeries performed on patients covered by pending legal settlements rather than traditional health insurance. Investigators are focusing on discectomies billed under a special code -- known as CPT 63056 -- that can bring especially generous payments. "Some federal criminal investigations like this can take years," says Gary Roberts, a Florida attorney familiar with this particular case. "However, from every indication I've seen, this one appears to be fast-tracked." Confirmation of the FBI probe comes months after TheStreet.com first began exploring a possible insurance scam involving Arthrocare's popular SpineWands. In those past reports, TheStreet.com examined Arthrocare's brisk sales to Palm Beach Lakes Surgery Center in particular. Palm Beach Lakes performs numerous discectomies on car-wreck victims and often bills for them under the generous 63056 procedure code. Car insurers, faced with huge payment demands from law firms representing the patients, ultimately foot the bill.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV