NuVasive, Inc. announced on April 29, 2015 that it has agreed “in principle” to pay the government $13.8 million to “resolve” an ongoing investigation by the Office of Inspector General (OIG) of the Department of Health and Human Services.
The OIG issued a federal administrative subpoena to the company in the second quarter of 2013 in connection with an investigation into possible false or otherwise improper claims submitted to Medicare and Medicaid. The subpoena sought discovery of documents for the period January 2007 through April 2013.
During a conference call with analysts on July 30, 2013, then NuVasive CEO Alex Lukianov, answered questions about the subpoena.
Interbody and Biologics Focus
“As you know, ” said Lukianov, “OIG subpoenas have been fairly common in med tech and in our industry. Audits and investigations have been increasingly common, as demonstrated by recent press related to investigations of physician-owned distributorships, potential off-label marketing of devices and many other topics. We have an exceptionally strong internal compliance team who have built, managed and overseen all of our compliance programs. We expect to work through this process over the coming quarters.”
Lukianov was asked if there were any particular parts of the business being investigated, asking about monitoring in particular. Lukianov added that the subpoena is a very broad document request, “focused on interbody with regard to Quadrant and biologics, both Osteocel and FormaGraft, but it’s very broad.”
No Corporate Integrity Agreement Expected
According to the company’s April 29 statement, it does not “currently” anticipate entering into a corporate integrity agreement (CIA) with the OIG and expects it to take several months before an agreement is finalized. The company said it cooperated fully in the investigation.
Wells Fargo analyst Larry Biegelsen said he believes the amount of the settlement is relatively immaterial, saves the expense and impact of a CIA on selling operations and makes it easier for the company to “participate in industry consolidation.”
