Following the raid, the companyâ€™s co-founders resigned
from the board of directors
Microbiome testing company, uBiome, a biotechnology developer that offers at-home direct-to-consumer (DTC) test kits to health-conscious individuals who wish to learn more about the bacteria in their gut, or who want to have their microbiome genetically sequenced, has recently come under investigation by insurance companies and state regulators that are looking into the companyâ€™s business practices.
reported that the Federal Bureau of
Investigation (FBI) raided the companyâ€™s San Francisco headquarters in
April following allegations of insurance fraud and questionable billing
practices. The alleged offenses, according to CNBC, included claims that
uBiome routinely billed patients for tests multiple times without consent.
Hospital Review wrote that, â€œBilling documents obtained by The Wall Street
Journal and described in a June 24 report further illustrate uBiomeâ€™s
allegedly improper billing and prescribing practices. For example, the
documents reportedly show that the startup would bill insurers for a lab test
of 12 to 25 gastrointestinal pathogens, despite the fact that its tests only
included information for about five pathogens.â€
Company Insider Allegations Trigger FBI Raid
In its article, CNBC stated that â€œcompany insidersâ€
alleged it was â€œcommon practiceâ€ for uBiome to bill patientsâ€™ insurance
companies multiple times for the same test.
â€œThe company also pressured its doctors to approve tests
with minimal oversight, according to insiders and internal documents seen by CNBC.
The practices were in service of an aggressive growth plan that focused on
increasing the number of billable tests served,â€ CNBC wrote.
FierceBiotech reported that, â€œAccording to previous
reports, the large insurers Anthem, Aetna, and Regence BlueCross BlueShield
have been examining the companyâ€™s billing practices for its physician-ordered
testsâ€”as has the California Department of Insuranceâ€”with probes focusing on
possible financial connections between uBiome and the doctors ordering the
tests, as well as rumors of double-billing for tests using the same sample.â€
Beckerâ€™s Hospital Review revealed that when the FBI
raided uBiome they seized employee computers. And that, following the raid,
uBiome had announced it would temporarily suspend clinical operations and not
release reports, process samples, or bill health insurance for their services.
The company also announced layoffs and that it would stop
selling SmartJane and SmartGut test kits, Beckerâ€™s reported.
uBiome Assumes New Leadership
Following the FBI raid, uBiome placed its co-founders Jessica
Richman (CEO) and Zac
Apte (CTO) on administrative leave while conducting an internal
investigation (both have since resigned from the companyâ€™s board of directors).
The companyâ€™s board of directors then named general counsel, John Rakow, to be interim CEO,
After serving two months as the interim CEO, Rakow resigned
from the position. The interim leadership of uBiome was then handed over to
three directors from Goldin
Associates, a New York City-based consulting firm, FierceBiotech
reported. They include:
Four testing products remain available for in-home testing
on the uBiome website:
- Explorer: allows consumers to learn about their microbiome through advanced DNA sequencing.
- SmartGut: identifies microbes in the gut that affect health and detects micro-organisms associated with gut illnesses, such as irritable bowel syndrome (IBS), inflammatory bowel disease (IBD), ulcerative colitis, and Crohnâ€™s disease.
- SmartJane: a womenâ€™s health screening test that genotypes 19 strains of Human papillomavirus (HPV), four sexually-transmitted diseases (chlamydia, gonorrhea, syphilis, and mycoplasma genitalium), and the balance of vaginal flora.
- SmartFlu: a nasal microbiome swab that detects bacteria and viruses associated with the flu, the common cold, and bacterial infections.
What Went Wrong?
Richman and Apte founded uBiome in 2012 with the intent of
marketing a new test that would prove a link between peoplesâ€™ microbiome and their
overall health. The two founders initially raised more than $100 million from
venture capitalists, and, according to PitchBook,
uBiome was last valued at around $600 million, Forbes
Nevertheless, as a company, uBiomeâ€™s future is uncertain. Of
greater concern to clinical laboratory leaders is whether at-home microbiology
self-test kits will become a viable, safe alternative to tests traditionally performed
by qualified personnel in controlled laboratory environments.
Dark Daily reported on the controversy surrounding
this trend in â€œAt-Home
Microbiology Tests Trigger Concerns about Scientific Value and Impact from
Microbiologists and Clinical Laboratory Scientists,â€ October 16, 2017.
Itâ€™s a trend worth watching.
Insiders Describe Aggressive Growth Tactics at uBiome, the Health Start-up Raided by the FBI Last Week
FBI Investigating uBiomeâ€™s Billing Practices
Turmoil Persists at uBiome with New Management Overhaul Amid FBI Probe: Reports
uBiome Appoints John Rakow as Interim Chief Executive Officer
Another Shakeup at uBiome: Interim CEO Quits
Microbiome Startup uBiome Cofounders on Administrative Leave after Reports of FBI Raid
Microbiome Testing Startup Under Scrutiny for Billing Practices
At-Home Microbiology Tests Trigger Concerns about Scientific Value and Impact from Microbiologists and Clinical Laboratory Scientists