Advanced Neuromodulation Systems Is Pleased That CMS Ruling Ensures Continued Patient Access to SCS Procedures.

Business Editors

DALLAS--(BUSINESS WIRE)--Nov. 3, 2003

Advanced Neuromodulation Systems, Inc. (ANS) (Nasdaq:ANSI) announced today that it is pleased that the Center for Medicare & Medicaid Services' (CMS) final ruling on Medicare outpatient prospective payment system (OPPS) for 2004 ensures continued patient access to spinal cord stimulation (SCS) procedures.

"CMS will implement rates in 2004 that enable hospitals to continue to offer SCS procedures to Medicare patients while generating a fair economic return," said Chris Chavez, ANS' President and Chief Executive Officer.

"Under the final OPPS 2004 ruling, reimbursement to the hospital for two-lead Genesis(R) IPG trial and permanent lead systems and procedures will be $24,039. This compares with an average hospital list cost of $18,840 for equipment to support a trial and a permanent implant. The procedure margin net of hospital equipment acquisition cost should be adequate to cover related hospital costs and to generate a reasonable profit," Chavez said. He added that CMS has also recognized the relative complexity of laminectomy procedures by creating a new reimbursement code for those procedures that is substantially higher than the new rate for percutaneous procedures.

Additionally, CMS' recent final ruling for the inpatient prospective payment system (IPPS) for 2004 increased reimbursement for SCS procedures performed in the inpatient setting to approximately $27,000. This increase means that SCS procedures will now generate a fair profit for hospitals in the inpatient setting as well. "Balancing the net impact of the OPPS and IPPS rulings, ANS anticipates no material impact on its business," Chavez said.

"Based on the mix of systems that are actually implanted, and our systems' configurations and resulting cost to the hospital, we believe that overall hospital costs for SCS systems and procedures should continue to be covered by Medicare reimbursement," Chavez concluded.

About Advanced Neuromodulation Systems

Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system. Forbes magazine recently recognized ANS as one of America's 200 Best Small Companies and Fortune magazine recently recognized ANS as one of Fortune's Top 100 Fastest-Growing Small Companies in the United States. Frost & Sullivan, an international strategic market research firm, also recently presented ANS with its Product Innovation Award, recognizing ANS as the technology innovation leader in the neurostimulation market and ANS' Genesis(R) Implantable Pulse Generator system as the most advanced fully implantable spinal cord stimulator on the market. Additional information is available at www.ans-medical.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:

Statements contained in this document that are not based on historical facts are "forward-looking statements." Terms such as "plan," "should," "would," "anticipate," "believe," "intend," "estimate," "expect," "predict," "scheduled," "new market," "potential market applications" and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: continued market acceptance of the Genesis(R) IPG and GenesisXP(TM) IPG; competition from Medtronic, Inc. and future competitors; continued market acceptance of our Renew(R) system following the launches of the Genesis IPG and GenesisXP IPG; patient or physician selection of less invasive or less expensive alternatives; adverse changes in coverage or reimbursement amounts by Medicare, Medicaid, private insurers, managed care organizations or workers' comp programs; intellectual property protection and potential infringement issues; obtaining necessary government approvals for new products or applications and maintaining compliance with FDA product and manufacturing requirements; product liability; reliance on single suppliers for certain components; completion of research and development projects in an efficient and timely manner; the satisfactory completion of clinical trials and/or market tests prior to the introduction of new products; successful integration of acquired businesses, products and technologies; international trade risks; and other risks detailed from time to time in the Company's SEC filings. Consequently, if such management assumptions prove to be incorrect or such risks or uncertainties materialize, anticipated results could differ materially from those forecast in forward-looking statements. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.