FEDS PROBE FRAUD BY COCHLEAR AMERICAS
Top Executives Depart in Wake of Investigation

Denver, CO (March 11, 2004)--Apparently Enron and Cochlear Americas executives may soon have something in common. In a move that comes as no surprise to the industry, Cochlear Limited admitted Thursday that the U.S. Department of Justice is investigating criminal violations of Medicare and Medicaid law by its Americas subsidiary in Colorado.

News wires report DOJ is focusing on kickbacks to physicians and audiologists that have been reported in detail on this website since 2000. These illegal inducements include monetary and in-kind payments that control the referral patterns for implant surgeries, artificially inflate the costs of the procedure, and severely limit the number of centers that can perform cochlear implants.

The probe apparently has teeth. Cochlear CEO Jim Miller and a senior audiologist immediately defected to Cochlear's main competitor Advanced Bionics Corporation in a deal negotiated by Cochlear itself. Furthermore, the company does not deny wrongdoing, insisting only that their practices represent a "gray area" of law.

For more information, see the following announcements, or click here for the most recent media articles.

Cochlear Americas Announcement

Cochlear Slumps as Investigation Launched

Cochlear Executives Defect in Wake of US Probe

US Probe Cuts $4 Off Cochlear

For a full list of fraudulent billing and shipping practices by cochlear implant manufacturers, see our Fraud and Abuse webpage.

You may also contact ORM at fraud@cochlear.org.