Doctors who perform angioplasty and implant heart stents are concerned about the potential for government moves that could compress reimbursement payments for such procedures, which would in turn hurt device makers.

The White House's proposed fiscal 2010 budget didn't spell out any direct impact for products like stents, but it did enflame long-running worries that pressure on product prices could emerge, sending medical-device stocks into a tailspin following release of the proposed budget.

Boston Scientific Corp. (BSX), Abbott Laboratories (ABT), Johnson & Johnson (JNJ) and Medtronic Inc. (MDT) are the big makers of stents, which prop open clogged heart arteries.

Medical-device companies typically sell their wares to hospitals, and hospitals' ability to pay top dollar is linked to insurance coverage. The key mechanism is a complex series of Medicare codes that determine hospital payments for procedures involving devices, as many device patients are older and covered by the U.S. insurance plan, and because Medicare sets trends for private insurers.

Doctors feel the same squeeze that companies do, but at an earlier link in the chain. Stent-implanting interventional cardiologists cited worries about such pressure during and ahead of the American College of Cardiology's annual conference.

"There's a general concern that reimbursement for hospitals as well as physicians will be under increasing pressure," said Gregg Stone, who directs cardiovascular research and education at the Center for Interventional Vascular Therapy at the New York-Presbyterian Hospital/Columbia University Medical Center.

Stone said this is a long-running worry that threatens to drag down salaries, making medicine a less attractive profession. He also noted the potential for worse circumstances, saying he dreads "being in a hospital system that tries to limit the type of care I practice."

Martin Leon, who is the same facility's associate director, noted that reimbursement for stents is currently very strong, which has held prices up. But the same relationship between reimbursement rates and prices could go the other way.

That worry took a toll after the budget proposal was issued on Feb. 26, and medical-device stocks haven't reclaimed lost territory despite the market's recent scorching run.

The Standard & Poor's 500 index rose 6.7% between the budget release and Friday's market close, with a steep drop and a sharp rise in between. Over the same stretch, two Dow Jones Wilshire indexes tracking device companies and other medical suppliers were down 2.9% and 5%.

"You saw the market and some of the medical-device companies frown because they basically see this as truly a clamping down on newer, expensive technologies," said Mark Turco, an interventional cardiologist who directs the Center for Cardiac & Vascular Research at Washington Adventist Hospital in Maryland.

A broad move from typical "safe-haven" sectors may also be playing a role as investors venture back into more sensitive industries.

There has been no government signal about sudden plans to squeeze prices for medical devices such as drug-coated stents -- which cost about $2,000 each and are very profitable. While big profit margins could make an enticing target, some Wall Street analysts have called the recent price-related concerns overblown. High prices also support the steep expense of developing new medical products.

In the interventional cardiology sector, doctors noted that costs can vary widely across different hospitals and geographic regions. A one-size-fits-all judgment about the market would be tough.

Steven Bailey, chief of the Division of Cardiology at the University of Texas Health Science Center in San Antonio, highlighted the aging population, which will likely put more people at risk of heart problems amid the effort to constrain costs.

Bailey, who is also president-elect of the Society for Cardiovascular Angiography and Interventions, an organization for stent-implanting doctors, noted that there is a certain amount of money in the Medicare system. If changes are made in one place, it opens the door for changes elsewhere to balance things out.

"I think that everyone is concerned about what those changes will be and what the basis will be for making those decisions," he said.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com