Spinal device maker Baxano Surgical Inc. will pay the government $6 million to settle claims that it encouraged doctors to overcharge federal health programs and paid kickbacks to physicians.
The Department of Justice and the U.S. Attorney for the District of Maryland on Wednesday said that Baxano told health care providers to make false claims to Medicare and other federal health programs to get bigger payments. The agency said the company also paid kickbacks to physicians who participated in speaker programs or consultant meetings in order to encourage them to use its products.
Baxano's AxiaLIF system allows surgeons to perform back operations without cutting through muscle or ligaments. The Justice Department said Baxano encouraged physicians and hospitals to bill Medicare for more invasive and expensive procedures.
Baxano is not admitting any wrongdoing as part of the settlement.
The company changed its name to Baxano Surgical from TranS1 Inc. on May 31 after it acquired Baxano Inc.
Shares of Raleigh, N.C.-based Baxano lost 4 cents to $2.23 in afternoon trading.