Three days after reporting Q3 earnings Intuitive Surgical (ISRG), a manufacturer of robotic surgical systems, revealed the Chinese province of Hunan has implemented new price controls that will negatively impact the company. The disclosure was made after markets closed Friday. No mention of the issue was made in Intuitive’s earnings release nor did management discuss it on the earnings call.

Specifically, the Hunan Provincial Healthcare Security Administration implemented what Intuitive calls significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery and orthopedics. Though just 3% of Intuitive’s installed base in China is in Hunan, the company described the matter as material:

“This rule has had a material negative impact on our procedures performed in the Hunan province.”

With China Intuitive’s second largest market in the quarter— 42.6% of DaVinci systems placed in the quarter were outside the U.S.— the concern is that price controls will spread to other provinces. This will most certainly be the case as we’ve documented over the last year how the provincial spread of price controls has negatively impacted U.S. medical device firms doing business in China.

Expect Intuitive to record significant impairment charges as certain medical device makers have.

Separately, the after hours filing also revealed Intuitive lost a $10 million jury verdict for infringing on Rex Medical’s surgical stapler patent.