The Centers for Medicare & Medicaid Services (CMS) has revoked the CLIA certificate of Theranos’ Newark, CA, laboratory and banned the company’s CEO Elizabeth Holmes from owning, operating, or directing a lab for at least 2 years.
The revocation will be effective in 60 days from yesterday, when CMS announced its sanctions on Theranos following a review by the agency last year. CMS is one of numerous federal and state agencies to investigate the business model and diagnostic tests of Theranos, which once claimed that its diagnostic technology could run scores of tests using drops of blood.
Holmes is among “owners and operators” of the lab who are banned from owning, operating, or directing a lab for at least 2 years. In addition to the bans and revocation of CLIA certification, CMS also imposed sanctions that included:
- Limiting the lab’s CLIA certificate for hematology
- Imposing an unspecified “civil money penalty”
- Directing the company to submit a plan to correct the lab’s problems.
- Suspending the lab’s approval to receive Medicare and Medicaid payments for any services performed in hematology
- Canceling the lab’s approval to receive Medicare and Medicaid payments for all laboratory services.
Theranos said it will not conduct any patient testing in that lab “until further notice” and promised to work with the agency to address problems with the Newark lab—while continuing to serve customers through its other lab in Scottsdale, AZ.
“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,” Holmes said in a statement. “We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions.”
Those actions, Holmes said, include shutting down and rebuilding the Newark lab; rebuilding quality systems; adding “highly experienced” leadership, personnel, and experts; and improving quality and training procedures.
The CMS sanctions come a month after Walgreens ended its relationship with Theranos, shutting down all 40 Theranos Wellness Centers in its Arizona stores and saying it will no longer offer the company’s services.
Walgreens at the time cited the voiding of test results and CMS’ earlier rejection of a correction plan for the lab submitted by Theranos. In May, The Wall Street Journal reported that Theranos had voided all results for tests run on its Edison device in 2014 and 2015, while correcting some blood coagulation tests performed at the Scottsdale lab.