On Friday, agents from the Federal Bureau of Investigation raided the uBiome Inc. offices in San Francisco for what is reportedly an investigation into the biotech startup’s billing practices.
“I can confirm that special agents from the FBI San Francisco Division are present at 360 Langton Street in San Francisco conducting court-authorized law-enforcement activity,” an FBI spokeswoman told the Wall Street Journal. “Due to the ongoing nature of the investigation, I cannot provide any additional details at this time.”
CNBC San Francisco Bureau Chief Sally Shin posted a video on Twitter on Friday showing special agents in Defense Criminal Investigative Service vests exiting the uBiome headquarters. The Journal reported that the investigation is over its billing practices, according to an unnamed source.
“We are cooperating fully with federal authorities on this matter,” a uBiome spokeswoman told Gizmodo in an email. “We look forward to continuing to serve the needs of healthcare providers and patients.”
uBiome secured $83 million in funding last year, amounting to a total valuation of $298 million. The company “uses machine learning, artificial intelligence, and advanced statistical techniques, as well as our patented precision sequencing™ process to analyze the microbes in your sample,” according to its website.
Its at-home microbiome test, which is supposed to give you quantitative insights on your digestive health, is called SmartGut. It offers several other similar tests under the names Explorer, which targets the digestive track, and SmartJane, a health test for women. The company describes its products as “an insurance-reimbursed test ordered by a health-care provider.”
Over a dozen one-star customer reviews of the product on the Better Business Bureau’s website have disparaged the company, calling its practices everything from “unethical” to a “scam.”
“I got this test done several years ago, they billed my insurance company $2790 for services I didn’t ask for,” Jennifer L wrote in March of this year. In December 2018, a commenter under the name Crystal A said uBiome billed her insurance company twice, “resulting in my insurance sending me TWO checks to pay UBiome with.”
Chris T wrote in April of last year, “This company states that a one time SmartGut kit is $89 on their website. I ordered one and 6 weeks later my insurance was billed $2,500.00.” While Sarah U that same month called uBiome “a total insurance scam.”
And it seems uBiome’s CEO, Jessica Richman, has been largely in the dark to, or simply glossing over, the litany of these allegations over billing issues and the recent investigation, saying in an interview last week that “compliance is our highest value” when asked about the company’s billing practices.