Tuesday, February 10, 2009

NeuroMetrix settles DOJ dispute with $1.2M payment

By Mass High Tech staff

NeuroMetrix Inc. has resolved an ongoing investigation with the U.S. Department of Justice and the Office of Inspector General of the U.S. Department of Health and Human Services, relating to its prior marketing referral practice associated with its NC-stat System. The medical devices firm has agreed to pay $1.2 million, and the DOJ has agreed not to sue the company, assuming compliance with the three-year Deferred Prosecution Agreement.

NeuroMetrix focuses on developing and marketing new products that help physicians assess and treat diseases and injuries of peripheral nerves, and control pain.

NeuroMetrix (Nasdaq: NURO) has also agreed to pay $2.5 million to settle a civil dispute with the two federal departments. The company has not admitted fault to the allegations. The DOJ and OIG have accused NeuroMetrix of conducting a nerve study using its NC-stat System without an F-wave measurement; the company, according to DOJ and OIG arguments, still paid doctors the higher rate of using an F-wave, rather than the alternative 95900 CPT code rate.

The agreement also calls for NeuroMetrix to comply with a five-year Corporate Integrity Agreement with OIG.

Payment of these legal settlements closes the investigations into NeuroMetrix, which started in 2006, the company said.

Last month, NeuroMetrix paid $350,000 to buy intellectual property and technology from Foxborough- based neurostimulation device maker Cyberkinetics Neurotechnology Systems Inc. used to treat spinal-cord and peripheral nerve injuries.