Nme Hospitals, Inc

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IN THE MATTER OF NME HOSPITALS, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3397. Complaint, Aug. 24, 1992--Decision, Aug. 24, 1992 This consent order prohibits, among other things, the California-based hospital chain from misrepresenting the comparative efficacy, permanence, or likely complications of any reconstructive surgical procedure, and requires that the respondent base future claims about the efficacy, permanence, or likely complications of any surgical procedure used in the treatment of bowel-related diseases on competent and reliable scientific evidence that substantiates any such representation.

Appearances For the Commission: Michael A. Katz and Matthew Daynard. For the respondent: John A. Meyers, in-house counsel, Santa Monica, CA.

COMPLAINT The Federal Trade Commission, having reason to believe that NME Hospitals, Inc., d/b/a Continent Ostomy Center ("NME Hospitals"), a corporation, hereinafter referred to as respondent or proposed respondent, has violated Section 5(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 45(a), and that an action by it is in the public interest, issues this complaint and alleges that: PARAGRAPH 1. Respondent NME Hospitals is a Delaware corporation with its principal office and place of business located at 2700 Colorado Avenue, Santa Monica, California. NME Hospitals owns and operates numerous hospitals, the following five of which contain individual Continent Ostomy Centers: NME HOSPITALS, INC. 799 798 Complaint 1. Century City Hospital, 2070 Century Park East, Los Angeles, California.

2. RHD Memorial Center, 7 Medical Parkway, Dallas, Texas. 3. Lutheran Medical Center, 2639 Miami Street, St. Louis, Missouri.

4. Palms of Pasadena Hospital, 1501 Pasadena Avenue South, St. Petersburg, Florida.

5. San Ramon Regional Medical Center, 6001 Norris Canyon Road, San Ramon, California.

PAR. 2. Respondent is engaged in offering for sale and the sale of services in connection with the treatment of ulcerative colitis and other bowel-related diseases. The services are made available to the public under the trade name, Continent5 1 4 1 4 7 1353 1402 152 47 96.324150 Ostomy5 1 4 1 4 8 1521 1404 160 36 92.634048 Center. PAR. 3. Since at least 1989, NME Hospitals has placed, or caused to be placed, advertisements in various periodicals that are in general circulation to the public, has mailed promotional materials to potential patients and has provided on site promotional materials regarding services offered by the Continent Ostomy Center. PAR. 4. The acts and practices of respondent alleged in this complaint have been and are in or affecting commerce, as commerce is defined in the FTC Act. PAR. 5. Respondent has disseminated or caused to be disseminated advertisements and promotional materials in the offering for sale of services in connection with the treatment of ulcerative colitis and other bowel-related diseases, including, but not necessarily limited to, the attached Exhibits A through D. These advertisements and promotional materials contain one or more of the following statements:

]. Thes 1 5 1 1 3 745 2394 114 28 96.836433 Barnett5 1 5 1 1 4 870 2395 154 36 96.839348 procedures 1 5 1 1 5 1036 2396 22 27 96.839348 is5 1 5 1 1 6 1071 2396 169 36 96.352829 recognized5 1 5 1 1 7 1252 2406 30 19 96.352829 as5 1 5 1 1 8 1294 2398 46 27 96.912323 thes 1 5 1 1 9 1351 2403 73 23 96.546043 most5 1 5 1 1 10 1436 2399 157 28 94.934669 successful5 1 5 1 1 11 1606 2400 164 28 95.690308 alternatives 1 5 1 1 12 1782 2406 29 22 95.690308 to5 1 5 1 1 13 1823 2401 47 27 96.955757 thea 1 5 1 2 0 535 2442 584 37 -1 5 1 5 1 2 1 535 2442 201 28 96.594574 conventional5 1 5 1 2 2 750 2443 177 36 95.301666 ileostomy. (Exhibit A) 2. [Thes 1 5 2 1 3 771 2499 116 28 96.731178 Barnett5 1 5 2 1 4 898 2499 154 37 96.892242 ileostomy5 1 5 2 1 5 1063 2500 62 34 92.004044 has]5 1 5 2 1 6 1141 2500 62 34 59.375195 [nJo5 1 5 2 1 7 1216 2500 129 38 97.019073 slippage5 1 5 2 1 8 1357 2510 31 20 97.017296 or5 1 5 2 1 9 1399 2502 143 37 91.998154 leakage. (Exhibit B) 3. Generally5 1 5 3 1 3 862 2558 79 34 96.993515 [with5 1 5 3 1 4 956 2566 34 20 93.286179 an5 1 5 3 1 5 1006 2558 122 29 92.952698 ileoanal5 1 5 3 1 6 1143 2560 202 34 96.363564 anastomosis]5 1 5 3 1 7 1361 2560 77 28 96.788490 there5 1 5 3 1 8 1452 2560 23 29 96.788490 is5 1 5 3 1 9 1491 2569 68 20 96.799324 overs 1 5 3 1 10 1581 2570 8 19 96.176758 a5 1 5 3 1 11 1603 2562 70 28 96.176758 50%5 1 5 3 1 12 1688 2563 108 27 96.533966 chances 1 5 3 1 13 1810 2563 58 28 96.533966 that4 1 5 3 2 0 533 2605 825 39 -1 5 1 5 3 2 1 533 2605 120 36 96.811798 patients5 1 5 3 2 2 667 2605 58 29 94.730736 will5 1 5 3 2 3 737 2606 111 36 97.002235 requires 1 5 3 2 4 860 2607 154 28 96.563454 additional5 1 5 3 2 5 1027 2608 141 36 95.287796 surgery. (Exhibit C) 4. Indeed,5 1 5 4 1 3 829 2671 52 19 96.971764 ours 1 5 4 1 4 897 2662 88 29 96.971764 initials 1 5 4 1 5 1003 2663 169 36 96.865677 experiences 1 5 4 1 6 1190 2664 67 28 96.916252 with5 1 5 4 1 7 1275 2665 46 27 96.714333 thes 1 5 4 1 8 1339 2665 82 28 97.020531 Kock5 1 5 4 1 9 1438 2666 94 35 96.375954 pouch5 1 5 4 1 10 1550 2674 59 20 96.375954 was5 1 5 4 1 11 1627 2667 132 28 96.072128 attended5 1 5 4 1 12 1776 2668 38 36 96.674065 by5 1 5 4 1 13 1831 2676 35 19 96.410515 an4 1 5 4 2 0 532 2710 692 36 -1 5 1 5 4 2 1 532 2710 145 36 96.221268 operative5 1 5 4 2 2 688 2710 126 29 96.942284 revisions 1 5 4 2 3 826 2716 57 23 96.892509 rates 1 5 4 2 4 895 2711 34 28 96.982681 of5 1 5 4 2 5 937 2711 95 29 95.803001 40%. (Exhibit D) Complaint 115 F.T.C.

5. A5 1 3 1 1 3 868 647 105 29 95.832603 reviews 1 3 1 1 4 994 647 34 28 96.457008 of5 1 3 1 1 5 1045 647 35 28 96.553978 715 1 3 1 1 6 1104 647 185 28 96.481049 consecutive5 1 3 1 1 7 1309 655 81 19 96.821854 cases5 1 3 1 1 8 1411 647 95 27 96.757072 where5 1 3 1 1 9 1528 647 58 33 96.823929 [thes 1 3 1 1 10 1606 647 127 33 96.599640 Barnett]5 1 3 1 1 11 1755 646 152 36 96.404747 techniques 1 3 1 1 12 1928 654 60 20 96.611626 was4 1 3 1 2 0 651 694 1335 40 -1 5 1 3 1 2 1 651 697 151 37 96.511497 employed5 1 3 1 2 2 812 696 129 29 97.000015 revealed5 1 3 1 2 3 952 704 16 21 96.900070 a5 1 3 1 2 4 978 696 82 28 96.893120 valves 1 3 1 2 5 1070 695 126 37 96.997932 slippage5 1 3 1 2 6 1207 695 145 28 96.706299 incidence5 1 3 1 2 7 1363 695 33 28 96.991135 of5 1 3 1 2 8 1403 695 78 29 96.939384 2.8%5 1 3 1 2 9 1493 695 54 28 96.924614 ands 1 3 1 2 10 1557 695 104 28 95.790443 overall5 1 3 1 2 11 1672 695 121 28 95.790443 revisions 1 3 1 2 12 1804 700 58 23 96.938293 rates 1 3 1 2 13 1871 694 34 28 96.729927 of5 1 3 1 2 14 1912 695 74 28 94.580551 7%. (Exhibit D) 6. (With5 1 3 2 1 3 921 800 46 28 95.934746 thes 1 3 2 1 4 984 800 115 28 96.428787 Barnett5 1 3 2 1 5 1115 798 165 38 96.558434 ileostomy]5 1 3 2 1 6 1300 799 72 34 95.793457 [t]he5 1 3 2 1 7 1388 798 149 29 96.888458 incidence5 1 3 2 1 8 1553 797 34 30 96.783745 of5 1 3 2 1 9 1601 798 83 29 96.923119 valves 1 3 2 1 10 1701 797 130 38 96.690392 slippage5 1 3 2 1 11 1847 798 51 28 96.976227 has5 1 3 2 1 12 1914 798 74 28 96.915359 been4 1 3 2 2 0 651 847 682 39 -1 5 1 3 2 2 1 651 849 123 29 96.902046 reduced5 1 3 2 2 2 786 854 29 23 96.700081 to5 1 3 2 2 3 827 848 226 38 96.526764 approximately5 1 3 2 2 4 1066 848 75 28 95.133087 3%. (Exhibit D) 7. [With5 1 4 1 1 3 894 905 46 28 96.968765 thes 1 4 1 1 4 949 905 115 28 94.288567 Barnett5 1 4 1 1 5 1073 904 163 36 95.719009 ileostomy]5 1 4 1 1 6 1250 903 70 35 94.052109 [t]he5 1 4 1 1 7 1330 902 139 38 94.431213 necessity5 1 4 1 1 8 1480 902 44 29 96.986290 for5 1 4 1 1 9 1533 902 176 37 96.670052 reoperation5 1 4 1 1 10 1718 902 50 28 96.987175 has5 1 4 1 1 11 1778 902 209 37 96.730705 progressively4 1 4 1 2 0 651 953 359 35 -1 5 1 4 1 2 1 651 954 156 30 87.696381 declined. (Exhibit D) PAR. 6. By and through the use of the statements referred to in paragraph five, and others of similar import and meaning not specifically set forth herein, respondent has represented, directly or by implication, that:

1. Respondent's surgical procedure -- the Barnett ileostomy -- for the treatment of ulcerative colitis and other bowel-related diseases is superior to other surgical procedures used as alternatives to a conventional ileostomy.

2. No patients who have received a Barnett ileostomy have experienced slippage or leakage problems. 3. For patients who receive an ileoanal anastomosis, there is over a 50 percent chance that they will need corrective surgery. 4, Respondent's clinical experience shows that the incidence of valve slippage and reoperation for the Barnett ileostomy is substantially less than that for the Kock procedure. PAR 7. In truth and in fact:

|. Respondent's surgical procedure--the Barnett ileostomy--for the treatment of ulcerative colitis and other bowel-related diseases is not superior to other surgical procedures used as alternatives to a conventional ileostomy.

2. Some patients who have received a Barnett ileostomy have experienced slippage and leakage problems. 3. For patients who receive an ileoanal anastomosis, there is significantly less than a 50 percent chance that they will need corrective surgery.

NME HOSPITALS, INC. 801 798 Complaint 4. Respondent's clinical experience does not show that the incidence of valve slippage and reoperation for the Barnett ileostomy is substantially less than that for the Kock procedure. Therefore, the representations as set forth in paragraph six were and are false and misleading.

PAR. 8. Through the use of the statements in paragraph five, and others not specifically set forth herein of similar import and meaning, respondent has represented, directly or by implication, that at the time respondent made the representations set forth in paragraph six, respondent possessed and relied upon a reasonable basis for such representations.

PAR. 9. In truth and in fact, at the time respondent made the representations set forth in paragraph six, respondent did not possess and rely upon a reasonable basis for such representations. Therefore, the representation set forth in paragraph eight was and is false and misleading.

PAR. 10. The acts and practices of respondent alleged in this complaint constitute deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

Complaint 115 F.T.C.

EXHIBIT A CONTINENT OSTOMY CENTER AT PALMS OF PASADENA HOSPITAL April 26, 1990 Mr. Ros Percy 30-70 34th St, 3-B Astoria, NY 11103 Dear Mr. Percy:

Enclosed is information on the BCIR, the appliance-free ileostomy. Due to tremendous success of the Barnett Continent Ileostomy, our experience has taken us beyond the original cases written about in the enclosed materials. Now, over 500 patients are experiencing an improved quality of life with the Barnett procedure. Today, several distinguished surgeons perform the Barnett procedure at Continent Ostomy Centers throughout the United States. Dr. Barnett has assumed the responsibility of the National Medical Directorship of these centers. The Barnett procedure is recognized as the most successful alternative to the conventional ileostomy. In a recent article in the Journal of the American College of Surgeons, it was stated that 98% of the patients that converted to the Barnett procedure had5 1 9 1 4 2 725 1851 190 36 96.778336 experienced5 1 9 1 4 3 928 1859 15 20 97.007584 a5 1 9 1 4 4 956 1850 165 37 96.569099 significant5 1 9 1 4 5 1133 1850 209 36 96.463455 improvements 1 9 1 4 6 1354 1849 28 29 96.409096 in5 1 9 1 4 7 1394 1849 47 29 96.448067 thes 1 9 1 4 8 1453 1849 107 36 96.391769 quality5 1 9 1 4 9 1573 1849 34 28 96.964600 of5 1 9 1 4 10 1616 1849 72 28 96.977776 theirs 1 9 1 4 11 1699 1848 97 29 93.121307 lives. In the last year, Barnett was honored for his continent ileostomy with awards of recognition from the American College of Surgeons, United Ostany Association, Southern Medical Association, and the National Foundation for Ileitis and Colitis. The Continent Ostomy Centers are dedicated to providing inflammatory bowel disease patients information about this renowned procedure for surgical treatment. If, after reviewing the enclosed information, you have any questions or comments, please feel free to call us at 1-800-262-5051. Sincerely, Melanie Krapf Counselor Enclosures NME HOSPITALS 798 Complaint EXHIBIT B MN Rag Heike ge ot aces , INC.

EXHIBIT “I wouldn't have played tenmus before my Barnett ileostomy.”

‘4.

A few years ago, I had the Brooke ilcostumy. You know what that means. } had to wear an ex: ternal pouch. It was difficult. Unsightly. Cumbersome. And at certain personal moments, more embarrassing than ] could ever tell you.

T felt cut off from the rest of the world. 1 couldn't wear the clothes. 1 wanted, or play sports the way I wanted. And, of course, it was Nearly impossible to have the kind of personal relationships | wanted. Vhe problems were mortifying—the terrible appearance, leakage and odors. I had never known that kind of depression before.

At The Century City Center, I learned about Barnett ileastom Brooke ileostom with its leakage Now IJ have an awn body. No ex Hospital Continent Ostomy a new opcration called the yt completely replaced my carlicr y: Itcan even replace the Kock Pouch, and valve slippage problems.

ew internal pouch using essentially my ternal pouch. No slippage or leakage. ¢ AOS ANGELES Times No odor. All wear now is a small Band-Aid? S to hide, because there is practically nothing t: Its changed my life so crastically I feel as I've been reborn. J wear what I want and c I want. And you won't believe what it's done personal lifel Find out about the new Barnett Contine: tomy. It will change your life. Forever. Before After THE CONTINENT OSTOMY CE? Century City Hospital 9NIN Cantus: Dacl Cane Complaint EXHIBIT C EXHIBIT C Alternative Procedures After Coloproctectomy JEFFREY W’. CLARKE, B.A., M.A., Ostomy Center Administrator ABSTRACT: After removal of the colon, surgical options include: the conventional ileostomy, the ileoanal anastomosis, and the continent intestinal reservoir. Patients should be informed of their options and be allowed to make a knowledgeable decision. The conventional ileostomy is a comparatively elementary procedure which insures removal of the disease. A 18% rate of reoperation is associated with the conventional ileostomy. The ileoana! anastomosis is an unpredictable procedure. Approximately 43% of these patents remain incontinent. Its re-operative rate is about 50%. Recent technical improvements with the continent intestinal reservoir have made it a viable option, It insures removal of the disease. A 7% re-operative rate is identified with the continent intestinal reservoir. INTRODUCTION In patients with bowel disease such as ulcerative colitis, Crohn’s colitis, or familial polyposis three possible alternatives exist for treatment after removal of the diseased colon. They are: the conventional ileostomy, the ileoanal anastomosis (with or without a pouch), and the continent intestinal reservoir. Each procedure has its benefits znd disadvantages. The operation which is best for one patient may not be suitable for another.' Thus, individual evaluation of each procedure allows one to choose the appropriate procedure on a case by case basis.

THE CONVENTIONAL ILEOSTOMY Until recently proctocolectomy with the conventional ileostomy was the preferred procedure for patients with inflammatory bowel disease.+ > The procedure involves removal of the entire colon and rectum and construction of a protruding stoma on the abdominal wall. An externa! appliance is then needed to collect fecal discharge.

The major advantage of the conventional ileostomy is that it is a comparatively elementary procedure which is readily available from a multiplicity of surgeons. Also, with this method usually all of the disease can be completely removed. A The Conventional fleostomy (With Appliance) ~e, patient with a conventional ileostomy loos control of his feces and is reliant upon an extern appliance; this is considered a major disadvanta because of the various physical and psychologic problems associated with it.* NME HOSPITALS, INC.

798 Complaint Conventional lleostomy Re-Operative Rate Re-Operation Is . Necessary 18% Re-Operation is Not Necessary One indication of a successful procedure is the necessity for additional operations. Some individuals are under the misconception that the conventional ileostomy is without problems when in fact a substantial amount of these patients require additional surgery. The conventional ileostomy necessitates additional operations in approximately 18% of patients.’ THE ILEOANAL ANASTOMOSIS A person must approach the ileoanal anastomosis very carefully because the results are unpredictable.* The surgery consists of removal of the colon with preservation of the rectum’s outer wall. A temporary conventional ileostomy is created and then, if the blood supply permits, the ileum is attached (preferably with an_ ileal pouch) to the anus. Weeks later, during a second surgery the conventional ileostomy is removed. Thus, patients without a rectum, patients with rectal cancer, perianal fistulas, poor sphincter function, or occupations that prohibit very frequent visits to the toilet are not candidates for this procedure.” Patients with Crohn's disease are not candidates for this procedure. The obvious advantage to this procedure is that continence may be restored and somewhat normal defecation is permitted. Unfortunately, 43% of these patients experience incontinence.’ The somunent patients initially have averaged about The Ileoana! Anastomosis Pypay rt) ten (10) fecal discharges per twenty four h period.'° After about a year, they report five nine (5-9) stools per day.'' Thus, medicatio: required to slow the intestine and to rel: perianal and anal pain. Because the outer rectu: lleoanal Anastomosis Re-Operative Rate Re-Operation Is Necessary Re-Operation Is Not Necessary Complaint retained there is always an increased chance for reoccurrence of the disease.’? Also, because of nerve damage due to this surgery urinary incontinence and sexual dysfunction (impotence) are more common." '4 Re-operations are fairly common with the ileoanal anastomosis. Although results vary considerably, none are exceptional. Generally there is over a 50% chance that patients will require additional surgery.'? However, because of the appea] of defecation from the anus some patients may acquiesce to these poor results and should be informed of this procedure. THE CONTINENT INTESTINAL RESERVOIR Recent technical advancements have made the continent intestinal reservoir a plausible procedure for most patients that must undergo a coloproctectomy.'® !? Additionally, this procedure enables patients with a conventional ileostomy the possibility to convert toa continent arrangement. Most authorities on the continent intestinal reservoir recognize that a select group of Crohn's The Continent Intestinal Reservoir ; { 1ISF.T.C.

patients are candidates for this procedure. The procedure involves the removal of the c and rectum and the formation of a self se. internal ileal pouch (preferably with an isop: altic valve and intestinal coilar). A flush stor placed just above the pubis.

The advantages to this procedure are aesthetic and psychological benefits of the ile: procedure without the physiological diffict Continence is restored. The disease is rem and medication is no longer required.?! To re: the stool the patient induces a 30 Fr. intys catheter into the stoma about two or threw per day? Continent Iritestinal Reservoi: Re-Operative Rate Re-opere Is Necess 7% Re-operation is Not Necessary The re-operative rate for this proced about 7%.*-?* The re-operations may be intensive than those associated with conventional ileostomy. This procedure is a ing because of its wide spectrum of candidat: re-operative rate and continent design; patients should also be informed of alternative.

NME HOSPITALS, INC.

SUMMARY In conclusion, if it is necessary to undergo surgery for the removal of the colon, alternatives to the conventional ileostomy are available. Factors such as the extent and type of the disease, rectal musculature, social and professional lifestyles may eliminate some of the alternatives. Thus, patients should be informed of their options and be allowed to make a knowledgeable decision. Comparison Of The Three Procedures’ Re-Operative Rates % Of Re-Operations LEGEND Conventional lleostomy lleoanal Anastomosis | Continent Intestinal Reservoir (Jeffrey W. Clarke is the Administrator of the Continent Ostomy Center at Palms of Pasadena Hospital in St. Petersburg, Florida. The Center acts as a gastroenterologic educational institution and specializes in the treatment of bouxl disease. Autbor of numerous papers, Clarke is an active member of both the United Ostomy Association and the National Foundation of Ileitis and Colitis | Complaint Notes 1.

w » ry N 2.

22.

23.

24.

Lavery, IC “Alemanue Procedures” Ostomy Quantrly 1 24, 16-48 Brooke BN “The Management of an Ikostomy” Lancet 195 102-404 Emblem R. et al. “Operative Tratment of Ulceranue Co Conventional Proctrctomy with Brook Ileostomy verses Muc Proctectomy writh Ikoanal Anastomosis” Scand J Gastrrocr 1988, 23, 493-500 Barnett WO. “Current Experiences with the Continent nies Reservoir’ Surgery. Gynecology and Obswirics. 1989. 168 Dozios, RR Alternatives to Conventional lleostomy, Book Medical Publishers, Inc 1985. 42 Cohen, Z “Current Status of the Continent Ilrostomy Cans Journal of Surgery, 1987, 5. 358 Fazio. VW. “Complications and Fumchon of the Con Ilkostomy” World Journal of Surgery, 1988. 12. 148 Mortensen, N. “Spout or Pouch? Alternatives for panents tkostomus” British Medical Journal, 1988, 296. 154 Pemberton. et al. “Quality of Life After Brooke Ileostomy an. Pouch-Anal Anastomosis” Annals of Surgery. 1989. 205 Emblem, R, et al “Operative Tratment of Ulceratx C Conventional Proceectomy with Brooke Ileostomy verses M: Proctrctomy with Iloanal Anastomosis” Scand J Gasera 1988, 23, 497 Pemberton, JH et al. “Quality of Life After Brooke Ileostor Neal Powch-Anal Anastomosis” Annals of Surgery. 1985 620-628 Lavery, IC. “Alternative Procedures” Ostomy Quarterly 24, 65 _ Pemberton, JH. “Quality of Life After Brooke Ileostomy an Pouch-Anal Anastomosis” Annals of Surgery, 1989. 20: . Dozios, R. Alternatives to Conventional lleostomy Book Medical Publishers, Inc. 1985, 348 . Emblem, R., et al. “Operative Treatment of Ulceratix ( Conventional Proctectomy with Brooke Ileostomy verses M Proctrctomy with Ileoanal Anastomosis” Scand J Gasterc 1988, 23 493-500 . Barnett WO. “Modified Techniques for Improving the Co Tkostomy’ American Surg. 1984, 49, 66-69 . Zane C. “Current Status of the Continent Ileostomy” Car Journal of Surgery, 1987, 5, 30 . Bloom, RJ. “A Reappraisal of the Kock Continent lleost Patients with Crobn's Disease” Surgery, Gyn. and Ob 1986, 162, 105 Barner, WO. “Continent Intestinal Reservoir” Southern / Journal, 1987, 10. 1265 . Fazio, VW. “Complications and Functions of the Cc Theostomy at the Cleveland Clinic” World Journal of S 1988, $2, 152 Lavery, IC. “Alternative Procedures” Ostomy Quarterl: 24, 16-48 Barnett, WO.. “Continent Intestinal Reservoirs. Te Experience”, currently unpublisbed, 1-8 Barnett, WO. “Current Experiences with the Continent I» Reservoir’ Surgery, Gyn. and Obstrtrics, 1989, 168. 1 Coben, 2. “Current Status of the Continent Ileostomy” Ce Jowmal of Surgery, 1987, 30, 358 Complaint 115 F.T.C.

EXHIBIT D EXHIBIT D Continent Intestinal Reservoirs A TEN YEAR EXPERIENCE WILLIAM O. BARNETT, M.D., F.A,CS. NME HOSPITALS, INC. 809 798 Complaint , I. INTRODUCTION Ul. CLINICAL MATERIAL - 351 CASES III. EVOLUTION OF SURGICAL TECHNIQUES - BCIR I IV. EVOLUTION OF SURGICAL TECHNIQUES - BCIR II V. EVOLUTION OF SURGICAL TECHNIQUES - BCIR III VI. CONCLUSIONS I. INTRODUCTION It was in 1969 that Dr. Niles Kock introduced the concept of the continent intestinal reservoir (CIR). Initial enthusiasm uas highand many conventional ileostomy patients were thrilled by the prospect ofa restored capacity to store intestinal waste and to control its discharge from the body. There is little question of the conclusion that a smoothly functioning CIR provides a better quality of life for most ileostomy patients. As experience with the procedure increased and larger series were reported, physicians became increasingly aware of the large number of CIR malfunctions requiring additional operative intervention. Valve slippage was probably the complication of greatest concern, being reported as 22% in one large series. Indeed, our initial experience with the Kock pouch was attended by an operative revision rate of 40%. Over the last 10 years we have maintained an effort to alter, correct and improve various technical details in CIR construction which held promise of improving results. An accumulated experience with 351 cases, all operated upon bya single surgeon, forms the basis of the subsequently detailed techniques, results and conclusions. Complaint I. CLINICAL MATERIAL ~ 351 CASES 1.

2.

3.

4.

5.

CONTINENT INTESTINAL RESERVOIR A TEN YEAR EXPERIENCE CIR TYPE NO. CASES KOCK 5 BCIR | 188 BCIR Il 130 BCIR Ill _ 28 Total 351 SEX DISTRIBUTION NO. CASES _ MALES 140 (40%) “FEMALES 211 (60%)_ Total 351 AGE RANGE AGE NO. CASES 10-19 9 20-29 77 30-39 137 40-49 47 50-59 71 60-69 ___ 10 Total 351 CIR CONSTRUCTION AT TIME OF COLOPROCTECTOMY CONVERTED FROM CONVENTIONAL ILEOSTOMY Total INDICATIONS FOR COLOPROCTECTOMY ULCERATIVE COLITIS FAMILIAL POLYPOSIS CROHN'S COLITIS OTHERS Total NO. CASES 70 (20%) 281 (80%) NO. CASES 279 (79%) 30 ( 9%) 32 (10%) —10( 2%) NME HOSPITALS, INC. 811 798 Complaint Il. EVOLUTION OF SURGICAL TECHNIQUES - BCIR | BCIR | 1980-1986 RE OPERATIONS 1. MARLEX COLLAR No. CASES SLIPPED VALVE POUCH AND VALVE PROBLEMS 2. FOLDED , POUCH 41 70 3.5% 15% DISADVANTAGES 1. VALVE FISTULA 2. POUCH FISTULA ca. 3. FISTULA PRONE SITE In 1980 we began the use of a valve which incorporated an isoperistaltic direction, a Marlex collar, stapling of the valve and irritation of the serosal surface of the valve with the electrocautery. The valve slippage rate was reduced to 3.5% and the overall operative revision rate was 15%. Among the 26 cases requiring revision i! was found that valve fistula, valve slippage and pouch fistula were responsible for 80% of these cases. SET NE a NE y IV. EVOLUTION OF SURGICAL TECHNIQUES - BCIR II BCIR Il 1986-1988 1. INTESTINAL RE OPERATIONS noes NO. CASES SLIPPED VALVE POUCH AND VALVE PROBLEMS 2. FOLDED 71 2.8% 7% POUCH DISADVANTAGES 1. POUCH FISTULA r 3. FISTULA PRONE SITE Complaint 115 F.T.C.

IV. EVOLUTION OF SURGICAL TECHNIQUES - BCIR I! (contd.) In order toeliminate valve erosion resulting from the Marlex collar we began using an intestinal collar in April of 1986. The intestinal collar provides a buttressing effect exerted against the mesenteric side of the valve where dessusception is usually initiated. This beneficial support is similar to that provided by the Marlex collar in lowering the incidence of valve slippage, but without the threat oferosion. In addition, the lumen of the intestinal collar communicates with the reservoir and allows gas and liquid to flow freely into the collar when pressure within the reservoir increases. Thus, the constricting action of the collar progressively increases as the tension within the reservoir rises. Fig (full pouch — empty pouch) The dynamics of these functions simulate the actions of the Nissen fundoplication in controlling reflux of gastric content into the esophagus. A review of 71 consecutive cases where this technique was employed revealed a valve slippage incidence of 2.8% and overall revision rate of 7%.

CONSTRICTING ACTION CONSTRICTING ACTION OF COLLAR INCREASES OF COLLAR DECREASES AS TENSION WITHIN WHEN POUCH IS EMPTY THE POUCH RISES co.

NME HOSPITALS, INC. 813 798 Complaint V. EVOLUTION OF SURGICAL TECHNIQUES - BCIR II! BCIR Il! . INTESTINAL COLLAR ‘ RE OPERATIONS NO. CASES SLIPPED VALVE POUCH AND VALVE PROBLEMS 27 0% 3% ADVANTAGES 2. LATERAL 1. NO VALVE EROSION POUCH FROM MARLEX 2. NO FISTULA PRONE SITE The Kock pouch is characterized by the intersection of 3 suture lines at a point near the base of the valve. This is the usual site for pouch fistula formation, apparently because of poor healing at the suture line trfurcation. In January of 1988, we initiated the use of a lateral pouch which utilizes one straight suture line that compiv*ely encircles the pouch. The resulting pouch is longer and more narrow than the Kock pouch but has the same tx.. +e. Twenty seven such pouches have been fashioned over a 6 month period. One patient (3%) has required operative revision for valve malfunction, The follow up period is relatively short but results to date are encouraging. Complaint 115 F.T.C.

VI. CONCLUSIONS The Continent lleostomy was introduced by Kock in 1969 and represents a tremendous contribution to the quality of life for many ileostomy patients. . Storage capacity for intestinal waste and control of its discharge from the body are restored. 3. There is no need to wear a bag. 4. Skin problems are virtually non-existent. 5. There are no restrictions upon clothing (no bag bulge). The ileal reservoir is emptied 2 to 3 times per 24 hours and this may be done with no difficulty in a public restroom.

7. The incidence of valve slippage has been reduced to approximately 3%. Valve fistula has been controlled by the use of an intestinal collar rather than a Marlex collar. 9. Pouch fistula has been virtually eliminated by utilization of the lateral pouch. 10. The necessity for reoperation has progressively declined. CONTINENT Ostomy CENTER aT PALMS OF PASADENA HOSPITAL 160” Pruncione Awe South © LA Se. Preerburg. FL 33707 (9 262-5051 WILLIAM O BARN TT. MD. ACS. Dreceer NME HOSPITALS, INC. 815 798 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such an agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order: 1. Respondent NME Hospitals, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 2700 Colorado Boulevard, Santa Monica, California. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

Decision and Order 115 F.T.C.

ORDER For purposes of this order, the following definition shall apply: Competent5 1 4 1 1 2 970 867 74 35 96.601425 ands 1 4 1 1 3 1063 866 151 37 96.253876 reliable5 1 4 1 1 4 1233 866 178 46 96.391678 scientific5 1 4 1 1 5 1431 867 188 36 87.493904 evidence shall mean tests, analysis, research, studies or other evidence conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted by others in the profession or science to yield accurate and reliable results. I.

It is ordered, That respondent NME Hospitals, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale or sale of services relating to the treatment of ulcerative colitis and other bowel-related diseases, do forthwith cease and desist from: A. Representing in any manner, directly or by implication, that respondent's surgical procedure -- the Barnett ileostomy -- for the treatment of ulcerative colitis and other bowel-related diseases is superior to other surgical procedures used as alternatives to a conventional ileostomy, unless such is the case, or otherwise misrepresenting the efficacy of the Barnett ileostomy as compared to any other surgical procedure used in the treatment of bowel-related diseases.

B. Misrepresenting in any manner, directly or by implication, that patients who had received a Barnett ileostomy have not experienced slippage or leakage problems, or otherwise misrepresenting complications following the Barnett ileostomy procedure, or any other surgical procedure used in the treatment of bowel-related diseases.

C. Representing in any manner, directly or by implication, that there is over a 50 percent chance that patients who receive an ileoanal anastomosis will need corrective surgery, or otherwise misrepre- NME HOSPITALS, INC. 817 798 Decision and Order senting the need for corrective surgery for any procedure used in the treatment of bowel-related diseases. D. Misrepresenting in any manner, directly or by implication, that respondent's clinical experience shows that the incidence of valve slippage and reoperation for the Barnett ileostomy is substantially less than that for the surgical procedure commonly referred to as the Kock5 1 3 2 5 6 1026 965 224 48 95.075813 procedure, or otherwise misrepresenting its clinical experience with complications following any other surgical procedure used in the treatment of bowel-related diseases. E. Making any representation, directly or by implication, about the efficacy, permanence, or likely complications of any surgical procedure used in the treatment of bowel-related diseases unless, at the time of making any such representation, respondent possesses and relies upon competent and reliable scientific evidence that substantiates any such representation. Il.

It is ordered, That respondent NME Hospitals, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale or sale of services relating to reconstructive5 1 5 1 6 3 925 1953 175 46 95.410637 surgery, cease and desist from misrepresenting, directly or by implication, the efficacy, permanence, or likely complications of any of respondent's reconstructive5 1 5 1 8 7 1735 2064 154 46 96.337723 surgical4 1 5 1 9 0 554 2121 1335 55 -1 5 1 5 1 9 1 554 2129 235 47 92.656822 procedures as compared to the efficacy, permanence, or likely complications of any other surgical procedure. For purposes of this order provision, reconstructive5 1 5 1 11 4 1192 2241 160 47 94.806381 surgery or reconstructive5 1 5 1 11 7 1735 2238 154 46 96.858490 surgical4 1 5 1 12 0 555 2296 1335 55 -1 5 1 5 1 12 1 555 2304 234 47 96.354759 procedures are those surgical procedures listed on Attachment A which is appended to this order. ITI.

It is further ordered, That respondent shall maintain for a period of five (5) years after the date the representation was last made, and make available to the Federal Trade Commission upon request for inspection and copying, all materials possessed and relied upon to Decision and Order 115 F.T.C.

substantiate any representation covered by this order, and all test reports, studies, or information in their possession or control that contradict, qualify or call into question any such representation. IV.

It is further ordered, That, for a period of five (5) years after the date of entry of this order, respondent shall notify the Commission at least thirty (30) days prior to any proposed change in respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in respondent which may affect compliance obligations arising out of this order. V.

It is further ordered, That respondent NME Hospitals, Inc., a corporation, and its successors or assigns, shall forthwith distribute a copy of this order to each of its officers, agents, representatives, independent contractors and employees who are engaged in the preparation and placement of advertisements or promotional materials, who communicate with patients or prospective patients, or who have any responsibilities with respect to the subject matter of this order; and, for a period of five (5) years from the date of entry of this order distribute same to all of respondent's future officers, agents, representatives, independent contractors and employees having said responsibilities.

VI.

It is further ordered, That respondent shall, within sixty (60) days after service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with all requirements of this order. NME HOSPITALS, INC. 819 Decision and Order ATTACHMENT A RECONSTRUCTIVE SURGICAL PROCEDURES ICD-9-CM PROCEDURE CODES PROCEDURE NERVOUS SYSTEM 0204 BONE GRAFT TO SKULL INSERTION OF SKULL PLATE REPAIR OF CEREBAL MENINGES (INCLUDES GRAFT) VENTRICULOSTOMY (INCLUDES VALVE/SHUNT INSERTION) VENTRICULAR SHUNT TO STRUCTURE IN HEAD AND NECK VENTRICULAR SHUNT TO CIRCULATORY SYSTEM VENTRICULAR SHUNT TO THORACIC CAVITY VENTRICULAR SHUNT TO ABDOMINAL CAVITY AND ORGANS VENTRICULAR SHUNT TO URINARY SYSTEM OPERATION TO ESTABLISH DRAINAGE OF VENTRICLE REPLACEMENT OF VENTRICULAR SHUNT IMPLANTATION OF INTRACRANIAL NEUROSTIMULATOR INSERTION/REPLACEMENT OF SKULL TONGS/HALO TRACTION DEVICE SPINAL SUBARACHNOID-PERITONEAL SHUNT SPINAL SUBARACHNOID-URETERAL SHUNT SHUNT OF SPINAL THECA INSERTION OF CATHETER INTO SPINAL CANAL FOR INFUSION OF THERAPEUTIC/PALLIATIVE SUBSTANCES INSERTION OR REPLACEMENT OF SPINAL NEUROSTIMULATOR SPINAL BLOOD PATCH CRANIAL/PERIPHERAL NERVE GRAFT IMPLANTATION/REPLACEMENT OF PERIPHERAL NEUROSTIMULATOR ENDOCRINE SYSTEM THYROID TISSUE REIMPLANTATION PERATHYROID TISSUE REIMPLANTATION REIMPLANTATION OF ADRENAL TISSUE TRANSPLANTATION OF THYMUS EYE RECONSTRUCTION OF EYELID WITH SKIN FLAP/GRAFT RECONSTRUCTION OF EYELID WITH MUCOUS MEMBRANE FLAP/GRAFT RECONSTRUCTION OF EYELID WITH HAIR FOLLICLE GRAFT 191] Decision and Order 115 F.T.C.

RECONSTRUCTION OF EYELID WITH FLAP/GRAFT INTUBATION OF NASOLACRIMAL DUCT CONJUNCTIVORHINDSTOMY WITH INSERTION OF TUBE/STENT REPAIR OF SYMBLEPHARON WITH FREE GRAFT RECONSTRUCTION OF CONJUNCTIVAL CUL-DE-SAC WITH FREE GRAFT FREE GRAFT TO CONJUNCTIVA EXCISION OF PTERYGIUM WITH CORNEAL GRAFT REPAIR OF CORNEAL LACERATION/WOUND WITH CONJUNCTIVAL FLAP CORNEAL TRANSPLANT, NOT OTHERWISE SPECIFIED LAMELLAR KERATOPLASTY PENETRATING KERATOPLASTY CORNEAL TRANSPLANT KERATOPHAKIA KERATOPROSTHESIS EPIKERATOPHAKIA REPAIR OF SCLERAL STAPHYLOMA WITH GRAFT SCLERAL REINFORCEMENT WITH GRAFT INJECTION INTO ANTERIOR CHAMBER INSERTION OF INTRAOCULAR LENS PROSTHESIS AT TIME OF CATARACT EXTRACTION (ONE-STAGE) INSERTION OF PSEUDOPHAKOS, UNSPECIFIED SECONDARY INSERTION OF INTRAOCULAR LENS PROSTHESIS SCLERAL BUCKLING WITH IMPLANT SCLERAL BUCKLING (with vitrectomy) INJECTION OF VITREOUS SUBSTITUTE REMOVAL OF OCULAR CONTENTS WITH SYNCHRONOUS IMPLANT EYEBALL ENUCLEATION WITH SYNCHRONOUS IMPLANT INTO TENON'S CAPSULE; ATTACHMENT OF MUSCLES EYEBALL ENUCLEATION WITH SYNCHRONOUS IMPLANT SECONDARY INSERTION OF OCULAR IMPLANT REVISION & REINSERTION OF OCULAR IMPLANT REVISION OF ENCULEATION SOCKET WITH GRAFT SECONDARY GRAFT TO EXENTERATION CAVITY EAR RECONSTRUCTION OF EXTERNAL AUDITORY CANAL CONSTRUCTION OF AURICLE OF EAR STAPEDECTOMY WITH INCUS REPLACEMENT REVISION OF STAPEDECTOMY WITH INCUS REPLACEMENT TYPE I] TYMPANOPLASTY TYPE II] TYMPANOPLASTY TYPE IV TYMPANOPLASTY TYPE V TYMPANOPLASTY NME HOSPITALS, INC. 821 798 Decision and Order 2001 §$MYRINGOTOMY WITH INSERTION OF TUBE 2061 = FENESTRATION OF INNER EAR (INITIAL) 2071 §=ENDOLYMPHATIC SHUNT 208 OPERATIONS ON EUSTACHIAN TUBE (INCLUDES INSERTION OF CATHETER OR TUBE) 2095 IMPLANTATION OF ELECTROMAGNETIC HEARING DEVICE 2096 IMPLANTATION OF COCHLEAR PROSTHETIC DEVICE, NOT OTHERWISE SPECIFIED 2097 IMPLANTATION OR REPLACEMENT OF COCHLEAR PROSTHETIC DEVICE, SINGLE CHANNEL 2098 IMPLANTATION OR REPLACEMENT OF COCHLEAR PROSTHETIC DEVICE, MULTIPLE CHANNEL NOSE, MOUTH, PHARYNX (1) 2107 CONTROL OF EPISTAXIS BY EXCISION OF NASAL MUCOSA & SKIN GRAFT OF SEPTUM/LATERAL NASAL WALL 2185 ©=AUGMENTATION RHINOPLASTY 242 GINIVOPLASTY 245 ALVEOLOPLASTY 247 APPLICATION OF ORTHODONTIC APPLIANCE 2755 FULL-THICKNESS SKIN GRAFT TO LIP & MOUTH 2756 SKIN GRAFT TO LIP & MOUTH (1) Excludes dental procedures RESPIRATORY SYSTEM 3175 RECONSTRUCTION OF TRACHEA & CONSTRUCTION OF ARTIFICIAL LARYNX 3193 REPLACEMENT OF LARYNGEAL/TRACHEAL STENT 3485 IMPLANTATION OF DIAPHRAGMATIC PACEMAKER, CARDIOVASCULAR (2) 3520 REPLACEMENT OF UNSPECIFIED HEART VALVE 3521 © REPLACEMENT OF AORTIC VALVE WITH TISSUE GRAFT 3522, REPLACEMENT OF AORTIC VALVE 3523. REPLACEMENT OF MITRAL VALVE WITH TISSUE GRAFT 3524 REPLACEMENT OF MITRAL VALVE 3525. REPLACEMENT OF PULMONARY VALVE WITH TISSUE GRAFT 3526 REPLACEMENT OF PULMONARY VALVE 3527 REPLACEMENT OF TRICUSPID VALVE WITH TISSUE GRAFT 3528 =REPLACEMENT OF TRICUSPID VALVE 3550 REPAIR OF UNSPECIFIED SEPTAL DEFECT OF HEART WITH PROSTHESIS Decision and Order 115 F.T.C.

REPAIR OF ATRIAL SEPTAL DEFECT WITH PROSTHESIS, OPEN TECHNIQUE REPAIR OF ATRIAL SEPTAT DEFECT WITH PROSTHESIS, CLOSED TECHNIQUE REPAIR OF VENTRICULAR SEPTAL DEFECT WITH PROSTHESIS REPAIR OF ENDOCARDIAL CUSHION DEFECT WITH PROSTHESIS REPAIR OF UNSPECIFIED SEPTAL DEFECT OF HEART WITH TISSUE GRAFT REPAIR OF ATRIAL SEPTAL DEFECT WITH TISSUE GRAFT REPAIR OF VENTRICULAR SEPTAL DEFECT WITH TISSUE GRAFT REPAIR OF ENDOCRAREAL CUSHION DEFECT WITH TISSUE GRAFT REVISION OF CORRECTIVE PROCEDURE ON HEART (INCLUDES REPLACEMENT OF HEART VALVE) OPEN CHEST CORONARY ANGIOPLASTY (WITH PATCH GRAFT) AORTOCORONARY BYPASS FOR HEART REVASCULARIZATION, NOT OTHERWISE SPECIFIED AORTOCORONRRY BYPASS OF ONE CORONARY ARTERY AORTOCORONARY BYPASS OF TWO CORONARY ARTERIES AORTOCORONARY BYPASS OF THREE CORONARY ARTERIES AORTOCORONARY BYPASS OF FOUR OR MORE CORONARY ARTERIES SINGLE INTERNAL MAMMARY-CORONARY ARTERY BYPASS DOUBLE INTERNAL MAMMARY-CORONARY ARTERY BYPASS OTHER BYPASS ANASTOMOSIS FOR HEART REVASCULARIZATION HEART REVASCULARIZATION BY ARTERIAL IMPLANT HEART TRANSPLANTATION IMPLANT OF PULSATION BALLOON IMPLANT OF HEART ASSIST SYSTEM REPLACEMENT AND REPAIR OF HEART ASSIST SYSTEM INITIAL INSERTION OF PACEMAKER LEAD (ELECTRODE), UNSPECIFIED INITIAL INSERTION OF TRANSVENOUS LEAD (ELECTRODE) INTO VENTRICLE INITIAL INSERTION OF TRANSVENOUS LEADS (ELECTRODES) INTO ATRIUM AND VENTRICLE INITIAL INSERTION OF TRANS VENOUS LEAD (ELECTRODE) INTO ATRIUM INSERTION OF REPLACEMENT OF EPICARDIAL LEAD (ELECTRODE) INTO EPICARDIUM REPLACEMENT OF TRANS VENOUS ATRIAL/VENTRICULAR LEAD(S) (ELECTRODE) INSERTION OF TEMPORARY TRANSVENOUS PACEMAKER SYSTEM NME HOSPITALS, INC. 823 798 Decision and Order 3780 INSERTION OF PERMANENT PACEMAKER, INITIAL OR REPLACEMENT, TYPE OF DEVICE UNSPECIFIED 3781 INITIAL INSERTION OF SINGLE-CHAMBER DEVICE, NOT SPECIFIED AS RATE RESPONSIVE (TO PHYSIOLOGIC STIMULI) 3782 INITIAL INSERTION OF SINGLE-CHAMBER DEVICE, RATE RESPONSIVE 3783 INITIAL INSERTION OF DUAL-CHAMBER DEVICE 3785 | REPLACEMENT OF ANY TYPE OF PACEMAKER DEVICE WITH SINGLE-CHAMBER DEVICE, NOT SPECIFIED AS RATE RESPONSIVE 3786 REPLACEMENT OF ANY TYPE OF PACEMAKER DEVICE WITH SINGLE-CHAMBER DEVICE, RATE RESPONSIVE 3787 REPLACEMENT OF ANY TYPE PACEMAKER DEVICE WITH DUAL-CHAMBER DEVICE 3794. IMPLANTATION/REPLACEMENT OF AUTOMATIC CARDIOVERTER/DEFIBRILLATOR, TOTAL SYSTEM (AICD) 3795 IMPLANTATION OF AUTOMATIC CARDIOVERTER/DEFIBRILLATOR LEAD(S) ONLY 3796 IMPLANTATION OF AUTOMATIC CARDIOVERTER/DEFIBRILLATOR PULSE GENERATOR ONLY 3797 REPLACEMENT OF AUTOMATIC CARDIOVERTER/DEFIBRILLATOR LEAD(S) ONLY 3798 REPLACEMENT OF AUTOMATIC CARDIOVERTER/DEFIBRILLATOR PULSE GENERATOR ONLY 3840 RESECTION OF VESSEL WITH REPLACEMENT, UNSPECIFIED SITE 3841 RESECTION OF VESSEL WITH REPLACEMENT, INTRACRANIAL VESSEL 3842 | RESECTION OF VESSEL WITH REPLACEMENT, VESSEL OF HEAD & NECK 3843. RESECTION OF VESSEL WITH REPLACEMENT, UPPER LIMB VESSEL 3844 RESECTION OF VESSEL WITH REPLACEMENT, ABDOMINAL AORTA 3845 RESECTION OF VESSEL WITH REPLACEMENT, THORACIC VESSEL (AORTA) 3846 RESECTION OF VESSEL WITH REPLACEMENT, ABDOMINAL ARTERY 3847. RESECTION OF VESSEL WITH REPLACEMENT, ABDOMINAL VEIN 3848. RESECTION OF VESSEL WITH REPLACEMENT, LOWER LIMB ARTERY 3849 RESECTION OF VESSEL WITH REPLACEMENT, LOWER LIMB VEIN 387 INTERRUPTION OF THE VENA CAVA (INCLUDES WITH IMPLANT OR SIEVE) 3895 VENOUS CATHETERIZATION FOR RENAL DIALYSIS Decision and Order 115 F.T.C.

REPAIR OF BLOOD VESSEL WITH TISSUE PATCH GRAFT REPAIR OF BLOOD VESSEL WITH SYNTHETIC PATCH GRAFT REPAIR OF BLOOD VESSEL WITH UNSPECIFIED TYPE OF PATCH GRAFT INTRAOPERATIVE CARDIAC PACEMAKER OPERATIONS OF CARTOD BODY AND OTHER VASCULAR BODIES INSERTION OF VESSEL-TO-VESSEL CANNULA (2) Does not include specialized pediatric cardiovascular procedures (not performed at any hospital owned by NME Hospitals, Inc.) HEMIC/LYMPHATIC SYSTEM CANNULATION OF THORACIC DUCT BONE MARROW TRANSPLANT, NOT OTHERWISE SPECIFIED AUTOLOGOUS BONE MARROW TRANSPLANT ALLOGENEIC BONE MARROW TRANSPLANT WITH PURGING ALLOGENEIC PONE MARROW TRANSPLANT WITHOUT PURGING TRANSPLANTATION OF SPLEEN DIGESTIVE SYSTEM (3) INSERTION - PERMANENT TUBE INTO ESOPHAGUS GRAFT OF ESOPHAGUS PERCUTANEOUS (ENDOSCOPIC) GASTROSTOMY (PEG) INSERTION OF GASTRIC BUBBLE (BALLOON) CONTINENT ILEOSTOMY PERCUTAEOUS (ENDOSCOPIC) JEJUNOSTOMY (PE]J) COLOSTOMY, UNSPECIFIED PERMANENT MAGNETIC COLOSTOMY PERMANENT COLOSTOMY ILEOSTOMY, UNSPECIFIED TEMPORARY ILEOSTOMY INSERTION OF SUBCUTANEOUS ELECTRICAL ANAL STIMULATOR AUXILIARY LIVER TRANSPLANT LIVER TRANSPLANT INSERTION OF CHOLEDO CHOHEPATIC TUBE FOR DECOMPRESSION ENDOSCOPIC INSERTION OF NASOBILIARY DRAINAGE TUBE ENDOSCOPIC INSERTION OF STENT (TUBE) INTO BILE DUCT PANCREATIC TRANSPLANT, UNSPECIFIED REIMPLANTATION OF PANCREATIC TISSUE HOMOTRANSPLANT OF PANCREAS HETEROTRANSPLANT OF PANCREAS 533] NME HOSPITALS, INC. 825 Decision and Order CANJULATION OF PANCREATIC DUCT ENDOSCOPIC INSERTION OF NASOPANCREATIC DRAINAGE TUBE UNILATERAL REPAIR OF DIRECT INGUINAL HERNIA WITH GRAFT/PROSTHESIS UNILATERAL REPAIR OF INDIRECT INGUINAL HERHIA WITH GRAFT/PROSTHESIS UNILATERAL REPAIR OF INGUINAL HERNIA WITH GRAFT/PROSTHESIS, UNSPECIFIED BILATERAL REPAIR OF DIRECT INGUINAL HERNIA WITH GRAFT/PROSTHESIS BILATERAL REPAIR OF INDIRECT INGUINAL HERHIA WITH GRAFT/PROSTHESIS BILATERAL REPAIR OF INGUINAL HERNIA, DIRECT&INDIRECT, WITH GRAFT/PROSTHESIS BILATERAL REPAIR OF INGUINAL HERNIA, WITH GRAFT/PROSTHESIS, UNSPECIFIED UNILATERAL REPAIR OF FEMORAL HERHIA WITH GRAFT/PROSTHESIS BILATERAL REPAIR OF FEMORAL HERHIA WITH GRAFT/PROSTHESIS REPAIR UMBILICAL HERNIA WITH PROSTHESIS INCISIONAL HERNIA REPAIR WITH PROSTHESIS REPAIR OF HERNIA OF ANTERIOR ABDOMINAL WALL WITH GRAFT/PROSTHESIS (3) Excludes bilroths, bypasses, and anastomoses URINARY SYSTEM RENAL AUTOTRANSPLANTATION KIDNEY TRANSPLANTATION IMPLANTATION/REPLACEMENT OF MECHANICAL KIDNEY IMPLANTATION OF ELECTRONIC URETERAL STIMULATOR REPLACEMENT OF ELECTRONIC URETERAL STIMULATOR INSERTION OF INDWELLING URINARY CATHETER REPLACEMENT OF INDWELLING URINARY CATHETER IMPLANTATION OF ELECTRONIC BLADDER STIMULATOR REPLACEMENT OF ELECTRONIC BLADDER STIMULATOR IMPLANTATION OF ARTIFICIAL URINARY SPHINCTER (AUS) URETERAL CATHETERIZATION REPLACEMENT OF URETEROSTOMY TUBE REPLACEMENT OF CYSTOSTOMY TUBE MALE GENITAL ORGANS INSERTION OF TESTICULAR PROSTHESIS Decision and Order 115 F.T.C.

INSERTION OF VALVE IN VAS DEFERENS CONSTRUCTION OF PENIS FITTING OF EXTERNAL PROSTHESIS OF PENIS INSERTION OR REPLACEMENT OF INTERNAL NON-INFLATABLE PROSTHESIS OF PENIS INSERTION OR REPLACEMENT OF INTERNAL INFLATABLE PROSTHESIS OF PENIS FEMALE GENITAL ORGANS IMPLANTATION/REPLACEMENT OF PROSTHESIS OF FALLOPIAN TUBE INSERTION OF INTRAUTERINE CONTRACEPTIVE DEVICE INSERTION OF THERAPEUTIC DEVICE INTO UTERUS ARTIFICIAL INSEMINATION (INCLUDES INVITRO FERTILIZATION) MUSCULOSKELETAL BONE GRAFT TO FACIAL BONE INSERTION SYNTHETIC IMPLANT IN FACIAL BONE BONE GRAFT TO UNSPECIFIED BONE BONE GRAFT TO SCAPULA/CLAVICLE/THORAX (RIBS/STERNUM) BONE GRAFT TO HUMERUS BONE GRAFT TO RADIUS/ULNA BONE GRAFT TO CARPALS/METACARPALS BONE GRAFT TO FEMUR BONE GRAFT TO PATELLA BONE GRAFT TO TIBIA/FIBULA BONE GRAFT TO TARSALS/METATARSALS BONE GRAFT TO SPECIFIED BONE, EXCEPT FACIAL BONE APPLICATION OF EXTERNAL FIXATION DEVICE, UNSPECIFIED BONE APPLICATION OF EXTERNAL FIXATION DEVICE, SCAPULA/CLAVICLE/THORAX (RIBS/STERNUM) APPLICATION OF EXTERNAL FIXATION DEVICE HUMERUS APPLICATION OF EXTERNAL FIXATION DEVICE, RADIUS/ULNA APPLICATION OF EXTERNAL FIXATION DEVICE, CARPALS/METACARPALS APPLICATION OF EXTERNAL FIXATION DEVICE, FEMUR APPLICATION OF EXTERNAL FIXATION DEVICE, PATELLA APPLICATION OF EXTERNAL FIXATION DEVICE, TIBIA/FIBULA APPLICATION OF EXTERNAL FIXATION DEVICE, TARSALS/METATARSALS APPLICATION OF EXTERNAL FIXATION DEVICE LIMB LENGTHENING, UNSPECIFIED BONE NME HOSPITALS, INC. 827 Decision and Order LIMB LENGTHENING, HUMERUS LIMB LENGTHENING, RADIUS/ULNA LIMB LENGTHENING, CARPALS/METACARPALS LIMB LENGTHENING, FEMUR LIMB LENGTHENING, TIBIA/FIBULA LIMB LENGTHENING, TARSALS/METATARSALS LIMB LENGTHENING INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, UNSPECIFIED SITE INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, SCAPULA/CLAVICLE/THORAX (RIBS/STERNUM) INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, HUMERUS INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, RADIUS/ULNA INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, CARPALS/METACARPALS INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, FEMUR INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, PATELLA INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, TIBIA/FIBULA INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, TARSALS/METATARSALS INTERNAL FIXATION OF BONE WITHOUT FRACTURE REDUCTION, SPECIFIC BONE, EXCEPT FACIAL BONE INSERTION OF BONE GROWTH STIMULATOR INTO UNSPECIED BONE INSERTION OF BONE GROWTH STIMULATOR INTO SCAPULA/CLAVICLE/THORAX (RIBS/STERNUM) INSERTION OF BONE GROWTH STIMULATOR INTO HUMERUS INSERTION OF BONE GROWTH STIMULATOR INTO RADIUS/ULNA INSERTION OF BONE GROWTH STIMULATOR INTO CARPALS/METACARPALS INSERTION OF BONE GROWTH STIMULATOR INTO FEMUR INSERTION OF BONE GROWTH STIMULATOR INTO PATELLA INSERTION OF BONE GROWTH STIMULATOR INTO TIBIA/FIBULA INSERTION OF BONE GROWTH STIMULATOR INTO TARSALS/METATARSALS INSERTION OF BONE GROWTH STIMULATOR INTO SPECIFIED BONE, EXCEPT FACIAL BONE CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF UNSPECIFIED SITE Decision and Order 115 F,T.C.

7911 | CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF HUMERUS 7912 | CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF RADIUS/ULNA 7913. CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF CARPALS/METACARPALS 7914 CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF PHALANGES OF HAND 7915 CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF FEMUR 7916 | CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF TIBIA/FIBULA 7917. CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF TARSALS/METATARSALS 7918 | CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF PHALANGES OF FOOT 7919 CLOSED REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF SPECIFIED BONE 7930 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF UNSPECIFIED SITE 7931 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF HUMERUS 7932 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF RADIUS/ULNA 7934. OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF PHALANGES OF HAND 7935 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF FEMUR 7936 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF TIBIA/FIBULA 7937 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF TARSALS/METATARSALS 7938 | OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF PHALANGES OF FOOT 7939 OPEN REDUCTION OF FRACTURE WITH INTERNAL FIXATION OF SPECIFIED BONE 8100 SPINAL FUSION, UNSPECIFIED 8101 ATLAS-AXIS SPINAL FUSION 8102 CERVICAL FUSION, ANTERIOR TECHNIQUE 8103. CERVICAL FUSION, POSTERIOR TECHNIQUE 8104. DORSAL/DORSOLUMBAR FUSION, ANTERIOR TECHNIQUE 8105 DORSAL/DORSOLUMBAR FUSION, POSTERIOR TECHNIQUE 8106 LUMBAR/LUMBOSACRAL FUSION, ANTERIOR TECHNIQUE 8107 LUMBAR/LUMBOSACRAL FUSION, LATERAL TRANSVERSE PROCESS TECHNIQUE 8108 |©LUMBAR/LUMBOSACRAL FUSION, POSTERIOR TECHNIQUE 8109 | REFUSION OF SPINE, ANY LEVEL OR TECHNIQUE NME HOSPITALS, INC. 829 798 Decision and Order 8111 ANKLE FUSION 8112 TRIPLE ARTHRODESIS 8113. SUBTALAR FUSION 8114. MIDTARSAL FUSION 8115 TARSO/METATARSAL FUSION 8116 METATARSOPHALANGEAL FUSION 8117. FUSION OF FOOT 8120 ARTHRODESIS OF UNSPECIFIC JOINT 8121 ARTHRODESIS OF HIP 8122 ARTHRODESIS OF KNEE 8123 ARTHRODESIS OF SHOULDER 8124. ARTHRODESIS OF ELBOW 8125 CARPORADIAL FUSION 8126 METACARPOCARPAL FUSION 8127. METACARPOPHALANGEAL FUSION 8128 INTERPHALANGEAL FUSION 8129 ARTHRODESIS OF SPECIFIED JOINT 8151 TOTAL HIP REPLACEMENT 8152 PARTIAL HIP REPLACEMENT 8154 TOTAL KNEE REPLACEMENT 8156 TOTAL ANKLE REPLACEMENT 8157. REPLACEMENT OF JOINT OF FOOT & TOE 8171 ARTHROPLASTY OF METACARPALANGEAL & INTERPHALANGEAL JOINT WITH IMPLANT 8173, TOTAL WRIST REPLACEMENT 8174 ARTHROPLASTY OF CARPOCARPAL OR CARPOMETACARFAL JOINT WITH IMPLANT 8180 TOTAL SHOULDER REPLACEMENT 8181 PARTIAL SHOULDER REPLACEMENT 8184 TOTAL ELBOW REPLACEMENT 8261 SURGICAL CONSTRUCTION OF THUMB FROM PORTION OF INDEX FINGER 8269 RECONSTRUCTION OF THUMB 8272 PLASTIC OPERATION ON HAND WITH GRAFT OF MUSCLE OR FASCIA 8279 PLASTIC OPERATION ON HAND WITH GRAFT OR IMPLANT 8375 TENDON TRANSFER/TRANSPLANT 8377 MUSCLE TRANSFER/TRANSPLANT 8381 TENDON GRAFT 8382 MUSCLE/FASCIA GRAFT 8392. INSERTION/REPLACEMENT OF SKELETAL MUSCLE STIMULATOR 8440 IMPLANTATION/FITTING OF PROSTHETIC LIMB DEVICE, UNSPECIFIED 844] FITTING OF PROSTHESIS OF UPPER ARM & SHOULDER 8442 FITTING OF PROSTHESIS OF LOWER ARM & HAND 8443 FITTING OF PROSTHESIS OF ARM, UNSPECIFIED Decision and Order 115 F.T.C.

IMPLANTATION OF PROSTHETIC DEVICE OF ARM FITTING OF PROSTHESIS ABOVE KNEE FITTING OF PROSTHESIS BELOW KNEE FITTING OF PROSTHESIS OF LEG, UNSPECIFIED IMPLANTATION OF PROSTHETIC DEVICE OF LEG SKIN UNILATERAL SUBCUTANEOUS MAMMECTOMY WITH SYNCHRONOUS IMPLANT BILATERAL SUBCUTANEOUS MAMMECTOMY WITH SYNCHRONOUS IMPLANT AUGMENTATION MAMMOPLASTY, UNSPECIFIED UNILATERAL INJECTION INTO BREAST FOR AUGMENTATION BILATERAL INJECTION INTO BREAST FOR AUGMENTATION UNILATERAL BREAST IMPLANT (for Augmentation) BILATERAL BREAST IMPLANT (for Augmentation) TOTAL RECONSTRUCTION OF BREAST SPLIT-THICKNESS GRAFT TO BREAST FULL-THICKNESS GRAFT TO BREAST PEDICLE GRAFT TO BREAST MUSCLE FLAP GRAFT TO BREAST INSERTION OF BREAST TISSUE EXPANDER INSERTION OF TOTALLY IMPLANTABLE INFUSION PUMP INSERTION OF TOTALLY IMPLANTABLE VASCULAR ACCESS DEVICE (VAD) FREE SKIN GRAFT, UNSPECIFIED FULL-THICKNESS SKIN GRAFT TO HAND SKIN GRAFT TO HAND FULL-THICKNESS SKIN GRAFT HAIR TRANSPLANT HETEROGRAFT TO SKIN HOMOGRAFT TO SKIN SKIN GRAFT PEDICLE FLAP/GRAFT, UNSPECIFIED CUTTING & PREPARATION OF PEDICLE FLAP/GRAFT ADVANCEMENT OF PEDICLE GRAFT ATTACHMENT OF PEDICLE FLAP/GRAFT TO HAND ATTACHMENT OF PEDICLE FLAP/GRAFT INSERTION OF TISSUE EXPANDER THE WINNING COMBINATION, INC., ET AL. 831 831 Complaint