Eargo target of DOJ criminal investigation, withdraws 2021 guidance

Eargo was informed it is the target of a criminal investigation by the U.S. Department of Justice related to insurance reimbursement claims the company has submitted on behalf of its customers covered by federal employee health plans. Eargo said it is cooperating with the investigation. In addition, the company “intends to work with the government with the objective of validating the process to support any future claims that the company may submit for reimbursement.” As previously disclosed, Eargo has been the subject of an ongoing claims audit by an insurance company that is the company’s largest third-party payor. The company has been informed by the insurance company that the DOJ is now the principal contact related to the subject matter of the audit. In light of this information, Eargo is withdrawing its financial guidance for the fiscal year ending December 31, 2021.