Eargo Fined $34M to Resolve False Claims Allegations

California consumer hearing aid company Eargo was fined $34.37 million to settle allegations of submitting or causing submissions of hearing aid claims for reimbursement to the Federal Employees Health Benefits Program (FEHBP) that contained unsupported hearing loss diagnosis codes.
 
Certain FEHBP health insurance plans elect to offer a hearing aid benefit, which varies from plan to plan. FEHBP carriers offering this benefit require claims for hearing aid devices to include a hearing loss-related diagnosis code. These diagnosis codes must be supported by a hearing loss diagnosis, typically based on a hearing test.
 
“The FEHBP plays a vital role in ensuring the health and wellbeing of our nation’s dedicated civil servants and their families,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division told the press. “The Department of Justice is committed to the integrity of this program and will pursue appropriate remedies against providers who misuse it.”
 
“Public servants rely on the FEHBP to keep their families healthy,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “Billing the program for medical devices patients may not need raises costs across the board. We are proud to hold Eargo accountable for its alleged use of unsupported diagnosis codes.”
 
“Submitting unsupported claims to the FEHBP, knowingly and otherwise, harms the American taxpayer,” said Deputy Inspector General Norbert E. Vint of OPM Office of the Inspector General (OPM-OIG). “I am incredibly grateful to our investigative staff and partners at the Department of Justice for their unwavering commitment to protecting the integrity of the FEHBP and preserving the trust fund for the health care of our nation’s dedicated civil servants.” 
 
The U.S. alleged that from 2017 to 2021 Eargo submitted the unsupported hearing-loss related diagnosis codes—called “superbills”—to FEHBP beneficiaries for reimbursement for hearing aid devices. It was further alleged that from Feb. 2020 to Sept. 2021 Eargo continued the illegal practice even after completing internal review of billing and coding practices in January 2021.