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Theranos, Holmes sanctioned by CMS

July 8, 2016Theranos has received notice from the Centers for Medicare & Medicaid Services regarding the imposition of sanctions arising from the 2015 survey of its Newark, Calif., laboratory. The sanctions, which do not immediately take effect, include:

  • Revocation of the laboratory’s CLIA certificate which, as dictated by the regulations, includes a prohibition on owners and operators of the lab from owning, operating or directing a lab for at least two years from the date of revocation.
  • Limitation of the laboratory’s CLIA certificate for the specialty of hematology.
  • A civil money penalty.
  • A directed portion of a plan of correction.
  • Suspension of the laboratory’s approval to receive Medicare and Medicaid payments for any services performed for the specialty of hematology.
  • Cancellation of the laboratory’s approval to receive Medicare and Medicaid payments for all laboratory services.

“We accept full responsibility for the issues at our laboratory in Newark, Calif., and have already worked to undertake comprehensive remedial actions. Those actions include shutting down and subsequently rebuilding the Newark lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures,” Theranos founder and CEO Elizabeth Holmes said in a statement. “While we are disappointed by CMS’ decision, we take these matters very seriously and are committed to fully resolving all outstanding issues with CMS and to demonstrating our dedication to the highest standards of quality and compliance.”

While the revocation would not take effect for two months, the company said it will not conduct any patient testing in the Newark lab until further notice. During this period, the company will continue to work with CMS to resolve and remediate outstanding issues in the Newark lab, and will continue to provide services to its customers through its Arizona lab.

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