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FBI searches COVID-19 testing firm after claims of fraud, faulty tests

By Calley Hair
FBI searches COVID-19 testing firm after claims of fraud, faulty tests
The makeshift nature of pop-up testing sites -- which often operate out of tents and trucks -- make them hard to regulate.  Photo by John Angelillo/UPI | License Photo

Jan. 24 (UPI) -- Federal agents searched the Illinois-based headquarters of a pop-up COVID-19 testing chain and its primary lab, following allegations in multiple lawsuits that the company issued faulty test results and engaged in fraudulent insurance billing practices.

State and federal agencies are investigating the company, Center for COVID Control, and the lab, Doctors Clinical Laboratory, located in Rolling Meadows, Ill. FBI agents executed a search warrant at the site on Saturday, a representative of the FBI's Chicago office told USA TODAY.

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Until earlier this month, the company operated 300 testing locations across 26 states. It has billed the federal government for more than $120 million to test uninsured patients.

The company headquarters and the lab are listed at the same address, though a Center for COVID Control representative previously told NBC News that there is "no cross-ownership" between the two.

RELATED Officials struggle to regulate pop-up COVID-19 testing sites

Saturday's FBI search was the latest step in a series of probes into the company. Last week, the Minnesota Attorney General's Office filed a consumer protection lawsuit accusing the Center for COVID Control of "deceptive and fraudulent practices." The suit claims that the company failed to deliver test results in a timely manner or failed to deliver them altogether, and claims they issued false negative results.

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The company is also under investigation by the Oregon Department of Justice, the Illinois Attorney General's Office and the Centers for Medicare and Medicaid Services, a branch of the U.S. Department of Health and Human Services.

"We take seriously any allegations of fraud or misbehavior by COVID-19 testing sites," Dr. Lee Fleisher, chief medical officer and director of CMS's Center for Clinical Standards and Quality, said in a statement. He added that the agency "is aware of several alleged instances of misconduct by this company's labs."

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According to the Minnesota complaint, staff at the testing sites would falsely list patients with public or private insurance as uninsured, which would qualify the company for reimbursement from the federal government.

Across the country, state and federal officials are struggling to monitor the massive industry of COVID-19 testing sites that have popped up in the last year or so.

High demand, rapidly evolving pandemic conditions and the makeshift nature of the testing sites -- which often operate out of tents and trucks -- have opened the door to bad actors ready to take advantage of desperate patients, regulators report.

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"These conditions change so rapidly," Gigi Gronvall, a senior scholar at the Johns Hopkins Center for Health Security in charge of developing the COVID-19 Testing Toolkit, told Kaiser Health News. "It's not a surprise that these conditions were totally ripe for consumers to be gouged and to get fraudulent tests."

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At its peak, the Center for COVID Control reported collecting 80,000 samples per day. Its testing sites have been closed since Jan. 14.

According to a statement from the company, leaders will use the "operational pause" to "train additional staff on sample collection and handling, customer service and communications best practices, as well as compliance with regulatory guidelines."

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