Baxano Surgical pays $6M to settle federal healthcare fraud beef

July 8, 2013 by Arezu Sarvestani

Baxano Surgical closes the books, without admitting wrong-doing, on a Justice Dept. investigation over allegations of healthcare fraud.

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North Carolina medical device maker Baxano Surgical Inc. (NSDQ:BAXS) agreed to pay $6 million to close a Justice Dept. probe initiated nearly 2 years ago. The definitive settlement consummates a tentative agreement the spinal device company forged with federal regulators in December 2012, according to a Baxano Surgical statement.

Baxano Surgical, which admitted no wrong-doing in connection with the settlement, agreed to play the $6 million, plus 2% accrued interest, in 9 quarterly installments beginning July 2013. Baxano had set aside the $6 million in the quarter ended Dec. 31, 2012, the company said.

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Under the terms of the agreement Baxano Surgical must abide by a "corporate integrity agreement," which requires the company to launch a series of "compliance related obligations, including training and monitoring procedures and maintaining a disciplinary process for compliance obligations for 5 years."

The settlement closes the books on the federal investigation as well as a whistleblower lawsuit.