NeuroMetrix Resolves Investigation into Past Sales and Marketing Practices

WALTHAM, Mass.--([ BUSINESS WIRE ])--NeuroMetrix, Inc. (Nasdaq: NURO) announced today that it has reached a resolution with the United States Department of Justice ("DOJ") and the Office of Inspector General ("OIG") of the United States Department of Health and Human Services regarding the previously-disclosed investigation into certain of the Company's past sales and marketing practices relating to its NC-stat System.

NeuroMetrix has been cooperating with the investigation since it began in 2006. As part of the resolution, the Company has entered into a Deferred Prosecution Agreement related to the Company's operation of marketing referral programs, pursuant to which the Company has agreed to a $1.2 million payment and the DOJ has agreed not to prosecute NeuroMetrix in return for compliance with the terms of the three-yearAgreement.

In addition, the Company has entered into a civil Settlement Agreement with the DOJ and OIG. The civil Settlement Agreement involves the referral programs and allegations that, where physicians performed a nerve conduction study using the NC-stat System and did not obtain an F-wave measurement, in limited circumstances, the Company caused physicians to seek reimbursement using the slightly higher valued 95903 CPT code payable for nerve conduction studies where an F-wave measurement is obtained, rather than the 95900 CPT code. While the Company does not admit to the allegations with respect to the F-wave coding issue, the Company has agreed to pay $2.5 million to settle this dispute. The Company remains fully eligible to participate in all federal health care programs.

As part of the resolution, NeuroMetrix has also entered into a five-year Corporate Integrity Agreement with OIG.

"We are pleased to put this matter behind us rather than continue with protracted legal proceedings," stated Shai N. Gozani, President and CEO of NeuroMetrix. "The marketing programs at issue were discontinued several years ago and only involved a small fraction of our business. At NeuroMetrix, we take seriously our responsibility to abide by laws governing our business practices. We have a strong culture of compliance and we look forward to continuing to provide the highest quality diagnostic and therapeutic products to our physician customers."

These settlements resolve the DOJ's and OIG's investigation into these matters.

About NeuroMetrix

NeuroMetrix is a science-based medical device company advancing patient care through the development and commercialization of innovative products that aid physicians in the assessment, treatment, and repair of peripheral nerve and spinal cord injuries and disorders, and that provide regional anesthesia and pain control. To date, our focus has been primarily on the assessment of neuropathies. Neuropathies affect the peripheral nerves and parts of the spine and are frequently caused by or associated with carpal tunnel syndrome, diabetes, sciatica, and other clinical disorders. We market systems for the performance of nerve conduction studies and needle electromyography procedures. Our product pipeline includes a system designed to deliver pharmacologic agents such as anesthetics and corticosteroids in close proximity to nerves for regional anesthesia, pain control and the treatment of focal neuropathies. We are also developing neurostimulation-based devices that promote nerve fiber regeneration in acute peripheral nerve and spinal cord injuries. For more information, visit [ http://www.neurometrix.com ].

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NeuroMetrix Resolves Investigation into Past Sales and Marketing Practices