The large COVID-19 testing outfit at the center of a federal investigation will “wind down” its operations and lay off 150 employees, the company said Friday afternoon.
Illinois-based Center for COVID Control has been the subject of an NBC Bay Area investigation for several weeks now.
A statement from the company said one of its founders, Akbar Syed, made the announcement to regional site operators.
Syed said he is “shifting our focus away from operating the test collection marketing and management firm to responding and cooperating with legal probes, and to clearing our good names,” according to the statement.
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Syed and his wife, Aleya Siyaj, run CCC.
A spokesman said some headquarters employees will remain on staff, including a limited number of senior managers for “legal, state health data reporting, finance, etc.” Other workers will “no longer be needed after February 4,” he said.
Center for COVID Control test sites quickly popped up all over the country. There were more than 300, according to the company, including locations in Mountain View, San Jose and San Ramon. All CCC locations have been voluntarily closed the past two weeks, after the company’s practices faced increasing scrutiny from NBC Bay Area, other news reporters, and finally regulators.
Many patients complained they did not receive results despite waiting hours in line for a test. At the same time, Medicare inspectors found that CCC’s lab vendor repeatedly mishandled tests, rendering tens of thousands of patients’ samples useless to determine if they had COVID-19. Last week, the Minnesota Attorney General said the company’s test results “are often deceptively riddled with inaccurate and false information.”
“We’re holding these companies accountable,” he said.
This past weekend, the FBI searched CCC’s headquarters and its partner laboratory, Doctors Clinical Laboratory in Rolling Meadows, Illinois. The lab has received more than $150 million taxpayer dollars from the federal government, according to a CDC database of COVID-19 payments. The total includes more than $10 million in additional payments made this week alone -- after the FBI search took place, according to the database.
The Health and Human Services department’s chief watchdog, its Inspector General, confirmed it is investigating both CCC and DCL, but declined to say exactly why.
“HHS-OIG agents participated in a joint law enforcement activity with the FBI in Rolling Meadows, IL,” said Spokesperson Yvonne Gamble this week. “We have nothing else to provide at this time."
Calls to Doctors Clinical Laboratory for comment were referred to Center for COVID Control. A spokesman for CCC said Center for COVID Control and the DCL are separate companies, but noted CCC has an agreement with DCL for “management services.”
Although CCC’s core office will essentially shutter, its local test sites could reopen under different names. Earlier this week, a company representative told NBC Bay Area that its 300 or so local sites are independently run and that CCC’s founders had freed those independent operators from any obligations to CCC. So, the local sites would be free to reopen under new names and affiliate with new labs, a spokesman said.
“Center for Covid Control founders Aleya Siyaj and Akbar Syed this week encouraged the independent operators of the affiliated 300-plus test collection sites to continue their valuable work of containing this virus by seeking affiliations with other vendors and to seek their own CLIA certified laboratory relationship,” the Friday statement said.
DCL is among the top 15 companies that have received the most federal money for COVID testing and treatment, according to the CDC database.
Some Center for COVID Control patients said CCC workers told them to leave their private health insurance information off their intake forms, which would leave payment for the COVID test to the federal government. A handwritten sign on the front of the Mountain View location, provided to NBC Bay Area by a CCC patient, shows instructions on how to fill out patient forms.
“Insurance: no. Test is free,” it said.
A CCC spokesman said CCC did not tell patients to withhold health insurance information.
“What you describe is non-CCC policy, not directed by CCC, and of course is unacceptable,” he said.
