NeuroMetrix to pay $3.7M to settle federal probe

BOSTON - Medical device maker NeuroMetrix Inc. will pay $3.7 million to settle a federal investigation of its sales and marketing of a diagnostic test for nerve conditions.

The U.S. Attorney's office on Monday said the Waltham-based company has accepted responsibility for illegally giving physicians free accessories for its NC-stat system to encourage them to press colleagues to buy the device.

NeuroMetrix said it agreed to pay a criminal penalty of $1.2 million and pledged to change its business practices. The company will not be prosecuted if it observes terms of the deal over the next three years.

NeuroMetrix also agreed to pay $2.5 million in civil damages and penalties for the kickbacks and to settle charges that it caused physicians to improperly bill Medicare.

NeuroMetrix has entered into a five-year Corporate Integrity Agreement with federal officials and says it remains eligible to participate in all federal health care programs.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.