Controversial Genetic Testing Company in Receivership

By Pat Anson, Editor

A controversial genetic testing firm under federal investigation for healthcare fraud has been placed into court-ordered receivership – a form of bankruptcy – that could lead to the restructuring and sale of the company. The CEO and founder of Proove Biosciences has also left the company.

In an interview with STAT, former CEO Brian Meshkin blamed the company's financial problems on “erroneous and damaging” reports that were based on “false allegations” by disgruntled former employees.

Proove Biosciences specializes in DNA testing that the company claims can improve the effectiveness of pain management treatment and determine whether a patient is at risk of opioid addiction.

Proove logo.png

In June, FBI agents raided the company’s headquarters in Irvine, California. Former and current employees who were interviewed by STAT said the agents were focused on possible kickbacks to doctors who encouraged patients to take Proove’s DNA tests. Physicians reportedly could make $144,000 a year in kickbacks that were called “research fees.”

In July, PNN reported that Proove was linked to a Medicare fraud case, in which three Indiana healthcare providers allegedly “caused Proove Bioscience… to falsely and fraudulently bill various health care programs for genetic tests... that were not medically necessary and never interpreted."

Proove was not named as a defendant in the Indiana case. In an email to PNN, Meshkin said Proove had cooperated with investigators.

“Proove has cooperated with both the FBI and US Attorney’s office on this case," said Meshkin. "With regards to tests being 'medically necessary', Proove received written and signed determinations of medical necessity supporting the tests ordered and billed to insurance carriers just like every other laboratory which requires such a determination on a test requisition form. Thus Proove operated appropriately and consistent with usual and customary practices."

Meshkin also defended Proove research, published in the Journal of Addiction Research & Therapy, which claimed to show the effectiveness of its genetic tests.The publisher of the journal, OMICS International, has been accused by the Federal Trade Commission (FTC) of deceiving researchers and readers about the true nature of its publications and peer review process.

"Proove can only speak to its experience with this particular journal,” Meshkin said in an email to PNN. "Specifically for papers submitted to this journal, our R&D team and academic collaborators engaged in documented, extensive peer-review, received suggested edits and provided responses to the suggested edits to the manuscripts submitted for review and publication. Thus, Proove would certainly consider the publications accepted from Proove-affiliated authors in that journal to be 'peer-reviewed'."

According to the FTC complaint filed last August, OMICS  has created hundreds of "open access" online medical journals that publish articles with little or no peer review. Researchers are also charged significant fees to get their articles published by OMICS, a "pay to play" policy that some consider unethical because it diminishes the quality of academic journals and the peer review process.

Proove has aggressively promoted its genetic tests with healthcare providers around the country. A pain clinic in Montana, for example, had a Proove “patient engagement representative” employed on site at the Benefis Pain Management Center in Great Falls.

“We had a meeting one day and here are these people from Proove Biosciences. They told us they were doing a research project,” said Rodney Lutes, a physician assistant who was later fired by Benefis. “They wanted to come to Benefis, into the pain department, and test our patients.  We were told this would be at no cost to the patient. My understanding was that they weren’t going to charge anybody, but I found out afterwards they were charging insurance companies.

“They said providers who participated in this would get some form of payment for participating in the program and for filling out all the paperwork.”

Lutes’ supervising physician at the clinic was Katrina Lewis, MD, a pain management specialist at Benefis who is listed as a member of Proove’s Medical Advisory Board.  Lewis apparently plays a significant role at the clinic, even though she only works there part time. Benefis has denied that Lewis or any of its employees received kickbacks from Proove for referring business to them.

STAT reported that Proove’s restructuring was apparently ordered by Mike Leavitt, a Proove board member, who also served as Utah governor and secretary of the Department of Health and Human Services. Leavitt’s investment firm, Leavitt Equity Partners, provided about $7 million in funding to Proove, according to Meshkin.

A former Proove manager told STAT that she initially felt good about going to work for the company, but soon had misgivings about Proove's research and billing practices.

“It sucked the life out of me, on an integrity level,” said Rhonda Frantz-Smith. “It got more and more corrupt.”