In a large bowl, gently combine the beef, egg, Parmesan, nutmeg, and ¾ teaspoon salt.
In a small bowl, combine the bread crumbs and milk. Let stand until absorbed, about 3 minutes. Add to the beef.
Add the spinach to the beef and mix gently. Shape into 20 meatballs.
Heat the oil in a large saucepan over medium heat. Brown the meatballs, about 7 minutes.
Add the sauce and simmer for 6 minutes or until the meatballs are cooked through.