uBiome Places Co-CEOS on Administrative Leave, Taps Interim CEO as Billing Investigation Continues

CEO's empty desk in corner office

Days after the Federal Bureau of Investigation raided the offices of Bay Area-based uBiome over allegations of illegal billing practices, the company’s board of directors placed Jessica Richman and Zac Apte, the co-founders and co-chief executive officers of the company, on administrative leave.

To helm the company during the investigation, uBiome’s board of directors named John Rakow, the company's general counsel, as interim CEO. Additionally, uBiome’s board of directors said it will form a special committee to oversee an independent investigation into uBiome's billing practices.

While little has been publicly disclosed about the concerns over the company’s billing practices, there are some unconfirmed stories about the potential billing to patients with private Medicare plans. Billing government plans for tests that are not deemed medically necessary may violate federal laws. Additionally, there were complaints that physicians in California were ordering uBiome tests for patients without prior consultation.

Rakow, who joined uBiome last year, said he wants company stakeholders to know that uBiome leadership will cooperate with the FBI investigation, as well as an investigation by the California Department of Insurance into the billing practices. Rakow said he wants to ensure that the allegations against the company are fully resolved and noted that uBiome is ready to take any corrective actions needed.

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Founded in 2012, uBiome uses advanced technology to analyze the microbiomes on the human body. The company has four primary consumer products, SmartGut, SmartJane, Explorer and Explorer Plus. Explorer is a consumer product that helps people understand the role that food and lifestyle can play in gut wellness. SmartGut is a stool test that identifies microbes in the gut for patients with chronic gut conditions such as IBD, IBS, Crohn’s Disease and ulcerative colitis. SmartJane is a women’s health test that genotypes all 19 clinically relevant strains of HPV, identifies four common sexually transmitted diseases (chlamydia, gonorrhea, syphilis, and mycoplasma genitalium), and surveys more than 20 vaginal microbes associated with bacterial vaginosis and other conditions.

Rakow said he remains confident in the company and its products.

"My confidence is based on the significant clinical evidence and medical literature that demonstrates the utility and value of uBiome's products as important tools for patients, health care providers and our commercial partners. We look forward to continuing to demonstrate this clinical utility and value at a time of growing demand in the market,” Rakow said.

After the raid was reported, uBiome said it does not have any control over physician billing. A uBiome spokesperson told BioSpace that the company is “cooperating fully with federal authorities on this matter. We look forward to continuing to serve the needs of healthcare providers and patients.”

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