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UBiome, a microbiome-related start-up investigated by the FBI for its billing practices, announced Wednesday that its co-CEOs had been put on administrative leave and that they had launched their own independent investigation.
In a statement, the company said the founders Jessica Richman and Zac Apte were no longer serving as general managers. UBiome's Board has appointed General Counsel John Rakow as Acting CEO.
"I want all of our stakeholders to know that we intend to cooperate fully with government authorities and private payers in order to satisfactorily resolve the issues that have been raised and we will take the necessary corrective measures to enable us to to become a stronger company. able to serve patients and health care providers, "Rakow said in a statement.
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The independent investigation will be overseen by a special committee, the company said. He did not provide any other details.
Federal agents raided the company's offices in San Francisco last week. A person familiar with the case said the FBI had heard allegations about the company's billing of microbiome testing to insurers and the payment of doctors who order uBiome tests to customers via a telemedicine service.
UBiome is a leader in a burgeoning microbiome test industry, where companies are looking to analyze the bugs in consumers' guts to provide various types of health information. Richman, who previously worked for Google, McKinsey, Lehman Brothers and Apte, an entrepreneur, co-founded the company in 2013.
With the clinical tests of ubiome, which must be ordered by a doctor, clients dabble their stool, vagina or nose and mail in a sample. The company sequences the different microbes in the sample to try to give an overview of the health of their customers.
UBiome works with a group of doctors who order testing via a telemedicine service, a common practice for companies selling their products online. However, some of the allegations reported to the FBI relate to the remuneration of physicians for returning patients to the tests. The FBI has also heard allegations that uBiome has changed some billing codes of insurers illegally.
In an interview two weeks ago with The Wall Street Journal, which had reported for the first time on the FBI's action last week, Richman had stated that "compliance was our greatest value" and had defended its billing practices.
The California Insurance Department also reviews the company's billing practices, as well as many private insurers, according to the newspaper.
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