NeuroMetrix agrees to pay $1.2m in probe
NeuroMetrix Inc., a Waltham medical device maker, agreed to pay a criminal penalty of $1.2 million and change its business practices to avoid prosecution for illegal kickbacks to doctors, the Department of Justice said.
The agreement resolves a Justice Department investigation into the company's NC-stat System, a device used to diagnose conditions related to carpal tunnel syndrome, leg pain, and other disorders.
To use the device, doctors were ordinarily required to purchase disposable biosensors. But the Justice Department alleged that NeuroMetrix illegally paid doctors to recommend the NC-stat system to colleagues by giving them free biosensors.
In addition, NeuroMetrix agreed to pay $2.5 million to settle civil charges that it encouraged doctors to improperly bill Medicare under a higher reimbursement code than was warranted for the test performed.
"We are pleased to put this matter behind us rather than continue with protracted legal proceedings," said Shai N. Gozani, the chief executive of NeuroMetrix, in a statement. "The marketing programs at issue were discontinued several years ago and only involved a small fraction of our business."
