Updated Jan. 10, 2014, at 4:05 p.m. with comments from Vertos.

The Centers for Medicare & Medicaid Services this month issued a final decision memo rejecting reimbursement for lumbar decompression in treatment of spinal stenosis, largely reiterating a proposal issued in October.

CMS officials agreed, however, to provide Medicare reimbursement for percutaneous image guided lumbar decompression (PILD) when the procedure is provided during an approved clinical study in patients with lumbar spinal stenosis.

The decision grants some leeway for PILD devices maker Vertos Medical to gather more evidence to address the efficacy concerns that CMS voiced about technology. The healthcare agency cast a wary eye on Vertos existing clinical data, saying that most of the studies supporting PILD came from Vertos itself or from physicians with financial ties to the company.

Vertos tallied the decision a win, saying it plans to cooperate with CMS to conduct new studies.

"We are pleased that CMS has chosen to grant national coverage for the mild procedure under its Coverage with Evidence Development (CED) policy," a company spokesperson told MassDevice.com today. "This decision reflects the widespread support for this therapy expressed throughout the more than 300 comments posted by physicians, health care practitioners, and physician treating societies during the public comment period. We look forward to working with CMS to define a study protocol in the near future."

Vertos in 2006 won FDA clearance for its mild tool kit, a set of minimally invasive surgical tools for performing spinal surgery to alleviate pain associated with lumbar spinal stenosis. The surgery is performed on an outpatient basis through an incision the company compares to the size of a baby aspirin, and the procedure requires no implants, no stitches and no general anesthesia, the company says.

The operation combines an imaging machine and specialized instruments to help physicians target and remove excess tissue and restore space in the spinal canal.

CMS in April 2013 initiated its coverage review for PILD treatment, meeting with Vertos a couple of times over the course of the year and gathering public comments before issuing its proposal. The initial public comment period, which ended in May, generated more than 100 comments, the vast majority of which advocated coverage for PILD. The agency also received 5 comments from national physicians’ groups, 3 of which supported coverage, 1 against coverage and 1 "unclear in its position."