The FBI is investigating whether lab-testing startup uBiome used improper billing codes and performed unnecessary tests for payments, people familiar with the case told The Wall Street Journal.
Additionally, the FBI is examining the physicians who ordered the uBiome tests.
Last fall, uBiome raised $83 million in a financing round. The company advertises itself as a business that tests patients' microbiomes. A spokesperson for the company declined to comment about the investigation to WSJ.
In April, FBI agents raided uBiome's San Francisco offices. Other federal and California agencies were also involved in the search. Since then, co-chief executives Jessica Richman, PhD, and Zac Apte have been placed on administrative leave. UBiome has also stopped performing tests that it billed insurers.
In one case, for which WSJ reviewed the billing codes, uBiome billed insurers for a lab test of 12 to 25 gastrointestinal pathogens. However, uBiome's tests only included information for about five pathogens.
Former uBiome leaders said the code was appropriate, a past employee told WSJ. Past employees have also said that uBiome would tweak coding depending on its reimbursement rate.
The company declined to comment to WSJ about its coding procedures.
Although many of the uBiome tests were approved by physicians, insurers were not provided documents that proved the tests were medically necessary. Claims often went unpaid, WSJ reports.
Many patients told WSJ that the tests were ordered after they filled out an online checklist about their symptoms. Emails indicate that uBiome would also offer patients repeat tests, according to documents reviewed by WSJ.
The company's board has begun an investigation into its practices.