The Health Care Financing Administration has Announced a New National Code for Payment of EECP Therapy.

WESTBURY, N.Y.--(BUSINESS WIRE)--Nov. 4, 1999--

Vasomedical, Inc. (Nasdaq:VASO) announced that the Health Care Financing Administration (HCFA) has created a new code to describe external counterpulsation technology.

This new code, HCPCS code G0166, is specific to Medicare beneficiaries and will be effective on January 1, 2000, for angina patients treated with EECP.

The allowable charge under this HCPCS code was based upon a preliminary determination of Relative Value Units (RVUs) assigned by HCFA to the resources needed for the administration of the therapy. Certain patients may require additional services, such as evaluation and management, which may be billed separately. The Company estimates the standard national charge to approximate $130 per session of EECP therapy, which may be adjusted by certain geographic indices. This would result in a standard charge of $4,550 for a full course of therapy, which typically involves 35 one-hour outpatient sessions. The assigned HCPCS code will allow EECP providers to bill Medicare electronically, substantially reducing the process for receiving reimbursement. Moreover, in light of the new payment instructions, local Medicare contractors will no longer have the responsibility of establishing reimbursement rates.

Anthony Viscusi, President and CEO of Vasomedical commented, "We are gratified that HCFA has worked diligently to establish a specific code and a nationally standardized payment level for EECP therapy. The modified payment instructions eliminate the confusion in the provider and contractor communities that led to unacceptably low and variable payment levels. We expect many more Medicare beneficiaries to gain access to EECP therapy now that HCFA has provided a more reasonable level of reimbursement based upon the resources that EECP centers must utilize in the administration of the therapy."

Vasomedical, Inc. (www.vasomedical.com) is primarily engaged in designing, manufacturing, marketing and supporting external counterpulsation systems based on the Company's proprietary technology. EECP(R) is a registered trademark of Vasomedical. The EECP system is now in use at major medical centers, including those affiliated with Columbia-Presbyterian Medical Center, University of Pittsburgh, University of California San Diego, University of California San Francisco and the University of Virginia, as well as the Miami Heart Institute and The Mayo Clinic. Vasomedical provides hospitals, clinics and private practices EECP equipment, treatment guidance, and a staff training and maintenance program to ensure optimal patient outcomes.

Except for historical information contained in this news release, the matters discussed are forward looking statements that involve risks and uncertainties. When used in this release, words such as "anticipate", "believe", "estimate", "expect" and "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the impact of competitive products and pricing; capacity and supply constraints or difficulties; product development, commercialization or technological difficulties; the regulatory and trade environment; and the risk factors reported from time to time in the Company's SEC reports. The Company undertakes no obligation to revise any forward-looking statements as a result of future events or developments.