In one aspect of the invention a multi-balloon catheter, such as a double-balloon catheter, with coating comprising a hydrogel polymer on the exterior surface of the occlusion balloons is provided. The balloons may be inflated inside the lumen to occlude a plaque-affected segment of the lumen thereby forming a lumen space between the balloons, wherein this plaque-affected lumen segment may be treated with a biologically active agent. The presence of the coating can reduce de-nuding of healthy endothelial lumen tissue after contact with the inflated balloons during the occlusion. In another aspect of the invention, a method is provided for using a multi-balloon catheter having a coating comprising a hydrogel polymer for treating a plaque-affected lumen segment, the method reducing the subsequent de-nuding or injury to healthy endothelial tissue that is contacted by the balloon during occlusion.