Inspire Medical Systems, a Golden Valley-based medtech company known for its implanted device to treat sleep apnea, is under investigation for allegations of false claims.
The U.S. Attorney’s Office for the District of Minnesota filed a civil investigative demand (CID) Jan. 17 requesting information about the company’s marketing, promotion and reimbursement practices for their products. Inspire disclosed the investigation to its investors on a Monday call as well as in Securities and Exchange Commission (SEC) filing.
Per the filing, the company is “cooperating with the investigation” though “no assurance can be given as to the timing or outcome of the government’s investigation.”
“We are confident in the strength of our compliance programs and procedures, and we remain committed to conducting our business ethically and in compliance with applicable laws and regulations,” CEO Tim Herbert said on Monday’s call, adding the company remains focused on patients and growing the adoption of Inspire’s implant.
Inspire declined to comment further on the open investigation. A spokesperson with the U.S. Attorney’s Office for the District of Minnesota declined to comment.
Inspire developed the first implantable neurostimulation device for treating obstructive sleep apnea. The company’s TV ad for the device proclaims “No mask. No hose. Just sleep,” while showing a man struggling with his continuous positive airway pressure (CPAP) machine, much to his partner’s annoyance.
The investigation concerns “allegations of false claims, including false claims arising from violations of the Anti-Kickback Statute, submitted to government payors in connection with [the] implant,” per the SEC filing. The False Claims Act and the Anti-Kickback Statute are two federal fraud and abuse laws. The False Claims Act doesn’t allow entities, including companies like Inspire, from submitting inaccurate claims to a government payer, such as health insurance programs like Medicare and Medicaid. The Anti-Kickback Statute outlaws the exchange of money or other valuables in return for business referrals operating within federal health care programs.
A CID allows investigators to obtain documents, written responses and sworn testimony from companies, attorneys David Robbins and Jason Crawford of Crowell & Moring said in Bloomberg Law.
