Baxano Settles With Feds for $6 Million
Baxano Surgical Inc. has resolved false claims and healthcare fraud allegations with the federal government for $6 million, the company recently announced. The Raleigh, N.C.-based firm admits no wrongdoing as part of the deal.
The settlement is related to a subpoena issued by the U.S. Department of Justice in October 2011 to TranS1 Inc., which acquired Baxano in May for $20.1 million. The subpoena was issued under the authority of the federal healthcare fraud and false claims statutes and sought documents for the period Jan. 1, 2008, through Oct. 6, 2011. Baxano did not disclose the reason for the subpoena.
Under the terms of its deal with the U.S. Justice Department, Baxano has entered into a Corporate Integrity Agreement that requires the firm to maintain its current compliance program and undertake a series of compliance-related obligations such as training, monitoring and maintaining a disciplinary process for compliance for a total of five years.
Baxano will pay its $6 million debt (plus 2 percent accrued interest) to the federal government in nine quarterly installments beginning this month.
"Baxano Surgical has cooperated fully with this investigation and the settlement is consistent with our diligent efforts to instill a culture of compliance throughout the company," President/CEO Ken Reali said in prepared remarks. "We believe the full resolution of this matter and the elimination of related financial uncertainty is in the best interests of the company and its shareholders."
Baxano designs, develops and markets minimally invasive products that treat degenerative lower back conditions.