SAN FRANCISCO — The FBI has heard allegations about practices at UBiome, a startup which sells tests for the microbiome, involving improperly changing billing codes that are used in how its tests get reimbursed by insurers, a person familiar with the matter told STAT.
The FBI has also been told allegations that physicians who order UBiome’s tests for customers via a telemedicine service have been compensated in a way that may run afoul of law dictating how physicians may make referrals and get paid, that person said.
Special agents from the FBI on Friday searched UBiome’s San Francisco offices, the Wall Street Journal first reported. An FBI spokesperson confirmed to STAT that special agents from the agency’s San Francisco division were at the address where UBiome has its offices for law enforcement activity.
STAT could not confirm whether these allegations are the same ones that prompted the FBI to raid UBiome’s offices Friday, or whether these allegations are involved in the scope of the FBI’s investigation.
The Wall Street Journal reported earlier Friday that the FBI’s investigation covers UBiome’s billing practices.
STAT also has not been able to independently verify whether UBiome did engage in the type of billing practices and physician payment practices described in the allegations heard by the FBI.
UBiome sells several tests that must be ordered by a physician, including SmartGut and SmartJane. People swab their own poop or vagina and mail in the sample. Then UBiome sequences the different types of microbes in the sample to try to offer insights about their health.
People can go on UBiome’s website to begin the process of ordering these tests, but they must be signed off on by a physician before the order can go through. UBiome works with a network of physicians who order these tests via a telemedicine platform, as is common with companies that market prescribed tests or pills online. The allegations heard by the FBI involved the way that these physicians were compensated for referring patients to these tests, according to the person familiar with the matter.
UBiome seeks to get its physician-ordered tests paid for by major insurers. The allegations heard by the FBI involved claims that UBiome changed certain billing codes — a standard part of the process of how the makers of health tests try to get payment from insurers — in a way that may not be permitted by law.
In a story on Friday, CNBC reported that it has heard from three people who said that UBiome routinely charged patients’ plans twice for tests using the same sample — without notifying them. STAT has heard the same allegations, but has not been able to independently confirm them. It’s not clear whether the FBI is looking into this charge.
Prentice Danner, a spokesperson for the FBI’s San Francisco division, said he was unable “to confirm details, to include the subject or subjects of any activity.” He confirmed, however, “that special agents from the FBI San Francisco Division were present at 360 Langton Street in San Francisco conducting court-authorized law enforcement activity.” (That is the address where UBiome has offices.) Danner added: “Due to the ongoing nature of the investigation, I cannot provide any additional details at this time.”
Contacted by email on Friday afternoon, UBiome’s press line and its CEO Jessica Richman did not immediately respond to STAT’s request for comment. In an interview with the Wall Street Journal last week, Richman said that “compliance is our highest value” and defended UBiome’s billing practices as proper.
UBiome is a leader in a burgeoning industry of testing building off the emerging science of the microbiome. This idea is that your microbes in your gut and other parts of your body might have something to do with various aspects of your health. So UBiome and other competitors have emerged to characterize those bugs — even though there’s little science to back up their use for clinical decision making.
Kate Sheridan contributed reporting.
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