ArthroCare Announces Review of Insurance Billing Practices; CEO Departure and Management Changes; Investigations by SEC and US Attorney Offices in Flo

AUSTIN, Texas–(BUSINESS WIRE)–ArthroCare Corp. (PINK SHEETS: ARTC – News) announced today that a review being conducted by the Audit Committee has identified certain improper practices in the insurance billing and healthcare compliance practices associated with the Company’s Spine Business Unit.

While the review, which is being conducted with the assistance of outside counsel Latham & Watkins LLP, is not yet complete (as described below), the Audit Committee has reviewed evidence that indicates that the Company’s Spine Business Unit engaged in and may have caused others to engage in improper practices in certain instances by: (1) seeking separate reimbursement from insurers for Company products in connection with procedures which were contractually reimbursed on a global basis; (2) making inaccurate statements in claims submitted to insurers regarding the place where particular procedures were performed; (3) providing physicians and insurers with descriptions of Company technologies which had the effect of circumventing payor policies that did not cover such technologies; and (4) recommending and advocating to physicians the use of a Current Procedural Terminology code to identify its coblation nucleoplasty technology that was not approved by the American Medical Association and may have not properly described the procedure that was performed. The improper practices identified to date by the review may have occurred since at least 2006.