American Medical Systems Reports 2005 Medicare Payment Value for Her Option In-Office Cryoablation Therapy.

MINNEAPOLIS -- American Medical Systems Holdings, Inc. (NASDAQ:AMMD) announced today that it has been informed by the Center for Medicare and Medicaid Services (CMS) of the corrected 2005 non-facility relative value units (RVUs) for the Company's Her Option(R) in-office cryoablation therapy. The total non-facility RVUs for CPT code 58356 in 2005 are approximately 68.65, resulting in a national average Medicare allowable payment of $2,602. The corrected RVUs and corresponding payment are effective as of January 1, 2005.

The 2005 Medicare Physician Fee Schedule, published on November 15, 2004, incorrectly reported the non-facility RVUs for CPT code 58356. The American College of Obstetrics and Gynecology (ACOG) worked closely with CMS during the past few months to ensure that the values for in-office endometrial cryoablation were corrected and updated in time for 2005.

Marty Emerson, President and Chief Executive Officer of AMS, commented, "We are very pleased with the work that has been done during the past year by ACOG, the American Medical Association, and CMS to establish a CPT code and a Medicare payment value for endometrial cryoablation. This new code will facilitate physician billing and reimbursement for this proven office treatment, allowing significant patient benefits and real cost savings to the health care system."

About Her Option Office Cryoablation Therapy

Excessive menstrual bleeding, or menorrhagia, affects roughly 13 million women in the United States and contributes to more than one quarter of all hysterectomies performed in the U.S. The Her Option Office Cryoablation Therapy offers women a much less invasive solution. The technology uses a microprocessor-controlled probe to eliminate excessive menstrual bleeding by freezing the lining of the uterus. The Her Option procedure can be done in the convenience and comfort of the gynecologist's office, avoids a costly hospital stay, and can reduce the recovery time as compared to a hysterectomy or other hospital-based procedures. Further, the Her Option therapy has very high patient satisfaction rates. In the study that led to FDA approval of the procedure, 94 percent of patients reported successful results and 97 percent of patients said they would recommend Her Option to a friend. More information about excessive menstrual bleeding and Her Option therapy may be found at www.HerOption.com.

About American Medical Systems

American Medical Systems, headquartered in Minnetonka, Minnesota is a diversified supplier of medical devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, and other pelvic disorders in men and women. Although not life threatening, these disorders can significantly diminish one's quality of life and profoundly affect social relation-ships. In recent years, the number of people seeking treatment has increased markedly as a result of longer lives, higher quality-of-life expectations and greater awareness of new treatment alternatives. American Medical Systems' products reduce or eliminate the incapacitating effects of these diseases, often through minimally invasive therapies. The Company's products were used to treat over 120,000 patients in 54 countries during the last year.

Forward-Looking Statements

Statements about the company's future product availability and sales are forward-looking statements subject to risks and uncertainties including the timing and success of new product introductions; physician acceptance, endorsement, and use of the company's products; competitor activities; changes in and adoption of reimbursement rates; and potential product recalls. These and other risks are more fully described in the company's Annual Report on Form 10-K for the year ended January 3, 2004, and its other SEC filings. Actual results may differ materially from anticipated results.

More information about the company and its products can be found at its website www.AmericanMedicalSystems.com and in the company's Annual Report on Form 10-K for 2003 and its other SEC filings.