NuVasive to Pay $14 Million to Settle Fraud Allegations

The company has settled charges associated with a 2013 subpoena.

Qmed Staff

Less than a month after NuVasive's CEO resigned, the company announced that it had reached a settlement with the U.S. Department of Justice.

Health & Human Services Department's Office of Inspector General (OIG) had subpoenaed the company in 2013 for Medicare and Medicaid fraud. Following that news, the company's stock price dipped 13% in a single day.

The OIG maintained that the company's senior executives knew of a scheme to falsely bill Medicare and Medicaid yet failed to put an end to it.

In a statement, the company explained that it had "cooperated fully" with the government's inquiry, adding that settling the matter avoids the time and expense of litigation.

NuVasive will pay $13.8 million, including fees, to the government as part of the deal.

Even though the company has released details of the settlement, the official deal is yet to be inked. The company anticipates that drafting the final written document could take a number of months.

In other news, the company's executive vice president Russell Powers sold 3888 shares of the company's stock on April 24, which at that time was worth $44.07 per share, making the transaction worth $171,344.16. Powers still owns 82,953 shares, which is roughly worth $3,655,738.71.

Analyst firm Canaccord Genuity recently the firm to hold. In a note to investors, Cannaccord analyst William Plovanic put a $49.00 price target on the stock--an 11.19% upside to the last closing price.

In late April, the stock has been in the $45 range.