NuVasive slides on XLIF reimbursement concerns

NEW YORK_Shares of medical device maker NuVasive Inc. fell Tuesday, but rebounded off session lows, as investors remained concerned that health insurers will not reimburse doctors who use the company's XLIF spinal surgery procedure.The San Diego company held a conference call Monday night addressing reimbursement rates by health insurers. It confirmed that recently three insurers have listed XLIF _ in which surgeons operator on the spine through small incisions in the side rather than through a large incision in the back _ as "experimental."That means the insurers will not reimburse surgeons who perform it. But NuVasive said surgeons are still performing the procedure and it maintained its profit and sales forecasts for 2009, and its expectations for growth in 2010.However, in heavy afternoon trading, NuVasive shares slid 77 cents, or 2.4 percent, to $31.68, after tumbling as much as 8 percent during the morning.NuVasive said surgeons are still able to get reimbursement for XLIF procedures at local and regional levels, and the company is working to reverse the decision. But analysts said other health insurers might adopt the guidelines now being used by Aetna, Cigna and UnitedHealth Group.JMP Securities analyst Steven Lichtman downgraded the stock to "market perform" from "market outperform," saying the changes will pressure NuVasive stock until other private payers take a different view. He said the company might need to conduct new studies to get the "experimental" tag removed.Brean Murray Carret and Co. analyst Jose Haresco downgraded the shares to "hold" from "buy" and removed his target price of $48 per share. He said the insurer recommendations are not new, and are in line with North American Spine Society recommendations from 2006.NuVasive continues to expect an adjusted profit of 27 cents to 30 cents per share for 2009, with revenue of $365 million to $367 million. It said revenue will grow of 30 to 35 percent in 2010.Analysts on average expect a profit of 30 cents per share and $366.8 million in revenue this year, according to Thomson Reuters. They expect NuVasive's revenue to grow 32 percent in 2010.