Federal investigators searched a California DNA testing lab Wednesday and hauled away boxes of documents as part of a health care fraud investigation, according to former employees familiar with the matter.
Proove Biosciences, an Irvine, Calif., firm that purports to determine a patient’s likelihood of becoming addicted to opioids, based on genetic tests and questionnaires, was raided by FBI agents and officers from the inspector general’s office of the Department of Health and Human Services.
About 25 agents arrived at 7:30 a.m. and banged on the company’s front door before gaining entrance and carrying away boxes of documents, according to local television news reports and the former employees, who spoke anonymously out of concern over possible legal reprisals.
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The former employees told STAT that Proove told employees to stay home for the day, and that offices of doctors affiliated with the company in California, Florida, and Kentucky were also raided by federal agents.
FBI spokeswoman Cathy Kramer told reporters only that the investigation involved “health care fraud,” that no arrests had yet been made, and the affidavit supporting the search warrant was under seal.
Proove CEO Brian Meshkin could not be reached for comment. The company has previously denied wrongdoing and said it has followed both “the letter and the spirit” of the law.
It released a statement late Thursday, saying in part, “Yesterday, federal agents came to the Irvine, California office of Proove Biosciences to serve a subpoena and execute a search warrant solely related to the collection of documents. This action was initiated by the U.S. Attorney’s office in the Southern District of California in San Diego. In the spirit of full cooperation, we have accommodated their requests. Despite some of the media coverage of this event, there was no “raid”, nor have there been any “arrests” or “indictments” issued. We will continue to cooperate with any future requests for information from the government.”
STAT reported in February that the FBI and inspector general were investigating Proove, which critics say has exploited public angst over opioid addiction for profit. A regulatory loophole allows many genetic testing companies, including Proove, to operate without government oversight on the medical value of their tests.
Proove, until recently one of the nation’s fastest-growing small businesses, lost many of its largest accounts with doctors’ offices who order Proove tests, and fired much of its staff, shortly after STAT’s report, former employees said.
Many Proove employees operated out of doctors’ offices, where former employees asserted patients were pressured to accept unnecessary tests. Experts said many doctors ordered tests in ways that suggested that they and the company could have been violating laws against kickbacks.
The firm’s tests of DNA, captured by swabbing inside a patient’s cheek, were unreliable, and many doctors ignored the results, according to former managers. Current and former employees also said unorthodox billing practices brought in million of dollars from Medicare and private insurers.