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COMPANY APPLIES FOR SOLE MEDICARE COVERAGE OF ECP

June 28, 2005

Cardiomedics announced it has submitted an application to the Centers for Medicare and Medicaid for sole Medicare coverage of its External Counter Pulsation (ECP) System for the treatment of heart failure. Cardiomedics has requested that Medicare coverage of ECP for the treatment of heart failure be limited to the use of ECP devices under a graduated low pressure regimen that has demonstrated in a clinical study, published in a peer-reviewed cardiology journal, mortality in the year following ECP therapy of 2 percent or less and a reduction of 80 percent or more in the number of hospital admittances in the year following ECP therapy, compared to the year before.

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