Baxano Surgical, Inc. has a definitive agreement with the U.S. Department of Justice regarding a subpoena dating back to October 2011 involving TranS1, Inc. (now merged with Baxano.).
After reaching a tentative agreement with the feds on Christmas Eve 2012, the company will now pay $6 million over nine quarterly installments beginning this July. The company admits to no wrongdoing as part of the settlement.
Baxano has also agreed to enter into a Corporate Integrity Agreement (CIA) with the government. Under the CIA, Baxano is obligated to maintain its current compliance program and undertake a series of compliance related obligations, including training and monitoring procedures and maintaining a disciplinary process for compliance obligations for five years.
Ken Reali, the company’s president and CEO, said the settlement “is consistent with our diligent efforts to instill a culture of compliance throughout the company.”
The October 2011 subpoena was issued under the authority of the federal healthcare fraud and false claims statutes and sought documents for the period January 1, 2008 through October 6, 2011. Industry insiders speculated the investigation was related to coding issues.
On November 2, 2012, the company announced that the Department of Health and Human Services, through the Centers for Medicare and Medicaid Services, approved and released the valuation of the Category I Current Procedure Terminology (CPT) code 22586 for pre-sacral interbody single level spinal fusion at L5-S1 to be effective January 1, 2013.
CPT code 22586, which applies to the company’s AxiaLIF 1L+ device, is a bundled lumbar arthrodesis procedure that includes bone graft, posterior instrumentation, and fixation which has been assigned a work RVU of 28.12 for calendar year 2013.
