UPDATE 1-CardioNet says UnitedHealth not to cover heart device

* Says doesn't agree with UnitedHealth's decision

* To provide update in Q2 results on impact of operations

July 7 (Reuters) - CardioNet Inc (BEAT.O) said health insurer UnitedHealth Group Inc (UNH.N) has maintained that it will not reimburse CardioNet's device for managing abnormal heart beat, sending its shares down 11 percent.

Last month, the Centers for Medicare and Medicaid Services recommended that payments for CardioNet's mobile-cardiovascular telemetry (MCOT) services would continue to be decided by local contractors in 2011. [ID:nSGE65R0HT]

CardioNet said it does not agree with UnitedHealth's coverage decision and will continue to work with it to prove the clinical efficacy of the MCOT technology.

CardioNet, which is trying to obtain a national reimbursement rate for its services, said it is analyzing the potential impact of UnitedHealth's decision on its operations, and will provide an update in its second-quarter results.

Shares of the company were down 40 cents at $4.37 in late morning trade Wednesday on Nasdaq. They touched a low of $4.25 earlier. (Reporting by Anand Basu in Bangalore; Editing by Gopakumar Warrier)