Medicare Rejects Cyberonics Depression Device

Medicare will not cover Cyberonics' implantable device to treat patients with depression, the U.S. insurance program for the elderly and disabled said Monday afternoon.

Cyberonics shares fell more than 10% in after-market trading following the announcement.

Medicare "does not believe there is a treatment effect directly attributable to VNS therapy based on the current evidence," the agency said.

Insurers often follow Medicare's lead when setting their own reimbursement policies.