uBiome, the health start-up just raided by the FBI, had been double billing insurers

KEY POINTS

  • The FBI showed up at uBiome’s San Francisco office on Friday.
  • Employees were asked to hand over their computers after federal agents broke down the door, according to a person familiar with the matter.
  • The company is being investigated over how it bills health insurers for its microbiome health tests.

The FBI raided the San Francisco office of health start-up uBiome on Friday, because of the questionable ways the company has billed consumers.

Federal agents showed up at the office at 360 Langton Street in the South of Market neighborhood for “court-authorized law enforcement activity,” an FBI spokesperson wrote in a statement to CNBC, adding that the investigation is “ongoing. The Wall Street Journal first reported on the raid.

UBiome sells health tests called SmartGut and SmartJane for people who want to monitor their gut health. The company bills insurers after physicians prescribe the products.

In the past few months, CNBC spoke with three people familiar with the company’s operations and learned that uBiome was routinely charging patients’ plans twice for tests using the same sample and without notifying them. The people requested anonymity as they were not authorized to speak about uBiome.

Jessica Richman, uBiome’s CEO, could not be reached for comment. Richman told the Wall Street Journal that she had “no knowledge whatsoever,” of the search, but a person familiar with the matter told CNBC that some employees were told to stay home from work on Friday. The person, who asked not to be named because the matter is confidential, also said that the FBI broke down the door of the company’s offices and requested access to employees’ computers.

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