A Medical Device Daily

NeuroMetrix (Waltham, Massachusetts) said it has agreed to pay $1.2 million as part of a resolution it reached with the U.S. Department of Justice and the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services regarding an investigation into some of the company's past sales and marketing practices relating to its NC-stat system.

The company also agreed to pay $2.5 million as part of a civil settlement agreement with the DOJ and OIG.

NeuroMetrix said it has been cooperating with the investigation since it began in 2006. The company has entered into a deferred prosecution agreement related to its operation of marketing referral programs. It has agreed to a $1.2 million payment and the DOJ has agreed not to prosecute NeuroMetrix in return for compliance with the terms of the three-year agreement.

The company also has entered into a civil settlement agreement with the DOJ and OIG. The civil settlement agreement involves the referral programs and allegations that, where physicians performed a nerve conduction study using the NC-stat system and did not obtain an F-wave measurement, in limited circumstances, NeuroMetrix caused physicians to seek reimbursement using the slightly higher valued 95903 CPT code payable for nerve conduction studies where an F-wave measurement is obtained, rather than the 95900 CPT code. The company did not admit to the allegations with respect to the F-wave coding issue, but agreed to pay $2.5 million to settle the dispute. NeuroMetrix noted that it remains fully eligible to participate in all federal healthcare programs.

NeuroMetrix has also entered into a five-year Corporate Integrity Agreement with OIG.

"We are pleased to put this matter behind us rather than continue with protracted legal proceedings," said Shai Gozani, president/CEO of NeuroMetrix. "The marketing programs at issue were discontinued several years ago and only involved a small fraction of our business. At NeuroMetrix, we take seriously our responsibility to abide by laws governing our business practices. We have a strong culture of compliance and we look forward to continuing to provide the highest quality diagnostic and therapeutic products to our physician customers."

These settlements resolve the DOJ's and OIG's investigation into these matters, the company said.

NeuroMetrix develops products designed to aid physicians in the assessment, treatment, and repair of peripheral nerve and spinal cord injuries and disorders, and that provide regional anesthesia and pain control. Its product pipeline includes a system designed to deliver pharmacologic agents such as anesthetics and corticosteroids in close proximity to nerves for regional anesthesia, pain control and the treatment of focal neuropathies.

The company also is developing neurostimulation-based devices designed to promote nerve fiber regeneration in acute peripheral nerve and spinal cord injuries.