A scaffold is mounted on a balloon of a balloon catheter. The scaffold has closed cells which deform upon balloon expansion and generate forces that cause struts or other components of the scaffold to deflect outwardly to a diameter that is greater than the inflated diameter balloon. The deflected struts apply forces to fracture plaque of other hardened lesions and also form an annular gap surrounding the balloon to provide for bypass flow of blood or other body fluids. A sheath may be located over the deflected struts to protect adjacent tissue structures from the deflected struts and/or to further define the gap.