During its fourth-quarter earnings call this week, Inspire Medical disclosed that it has become the subject of a civil probe by the Department of Justice as part of a false claims investigation into reimbursements from Medicare and Medicaid.
The neurostimulation company, based outside Minneapolis, said in a filing that it had received a civil investigative demand, or CID, Jan. 17 from the U.S. district attorney’s office in Minnesota that was also related to potential violations of federal anti-kickback law.
“The CID requests information relating to the marketing, promotion and reimbursement practices associated with our products,” Inspire President and CEO Tim Herbert said on the company’s call with investors on Monday.
“We intend to fully cooperate with the investigation and provide the information requested,” Herbert added. “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.”
“We do not anticipate that the investigation will interfere with the work that we do to improve the lives of our patients,” he said.
The anti-kickback statute specifically prohibits payments in exchange for patient referrals, while the False Claims Act covers improper reimbursements from government payers.
Inspire’s minimally invasive nerve stimulator implant aims to treat obstructive sleep apnea without a face mask by controlling the muscles of the tongue in order to keep the airway open. In mid-2023, its pacemakerlike device received a new approval from the FDA broadening its use to a larger population of patients.
That’s paid off, according to the company—for the full year of 2024, sales were up 28% compared to the year prior, reaching $802.8 million. Annual net income, meanwhile, hit $53.5 million, versus a net loss of $21.2 million in 2023.
In the fourth quarter, Inspire said it brought on 72 new U.S. medical centers as customers, bringing its base to 1,435, and that it added 12 new sales territories to its more than 300 areas.
For 2025, the company predicts annual revenue will jump to between $940 million and $955 million—while it moves toward the full commercial launch of the next generation of its implantable pulse generator, the Inspire V, which received an FDA approval last year.