Cochlear implant company pays $12 million to settle whistleblower’s fraud allegations

by Ben Vernia | December 22nd, 2022

On December 20, the Department of Justice announced that cochlear implant manufacturer Advanced Bionics LLC had agreed to pay $12 million to resolve a former engineer’s whistleblower allegations that the company had provided false information to the government regarding the company’s devices. According to DOJ’s press release:

Advanced Bionics LLC, a Valencia, California-based manufacturer of cochlear implant system devices, has agreed to pay more than $12 million to resolve allegations that it misled federal health care programs regarding the radio-frequency (RF) emissions generated by some of its cochlear implant processors.  

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The tests at issue measured the extent to which cochlear implant systems generate RF emissions that can potentially interfere with other devices that use the RF spectrum. Such other devices may include telephones, alarm and security systems, televisions and radios.

The settlement resolves allegations that Advanced Bionics, in submitting pre-market approval applications to the Food and Drug Administration (FDA) for Advanced Bionics’ Neptune and Naida cochlear implant processors, made false claims regarding the results of its RF emissions tests. Advanced Bionics allegedly represented that its processors satisfied an internationally recognized emissions standard when, in fact, Advanced Bionics did not comply with that standard. More specifically, Advanced Bionics allegedly failed to honor the standard’s requirements to test processors using “worst-case” configurations, and improperly shielded certain emissions-generating system components during emissions testing. Advanced Bionics then allegedly sought reimbursement from Medicare, Medicaid, and other federally funded healthcare programs for these devices. 

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In addition to the civil settlement, Advanced Bionics entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. The CIA requires an independent review of activities and processes relating to the preparation or submission of Premarket Approval Applications (PMAs) to the FDA and performance standards relevant to those PMAs. Advanced Bionics must also implement a robust compliance program that includes, among other things, a risk assessment program and compliance certifications from key managers and from the Board of Directors. 

The settlement provides that Advanced Bionics will pay roughly $11.36 million to the United States, and in addition, will pay approximately $1.24 million to the participating Medicaid States, pursuant to the terms of separate settlement agreements that Advanced Bionics has, or will enter into, with those states.

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The government announced that the whistleblower will receive approximately $1.87 million (a 16.5% share of the federal portion of the settlement).

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