Theranos said last night it will appeal the sanctions imposed on its Newark, CA, laboratory by the Centers for Medicare & Medicaid Services (CMS).
The company filed a notice of intent to appeal the sanctions, which were imposed by CMS last month. CMS’ sanctions included revoking the lab’s Clinical Laboratory Improvement Amendments (CLIA) certificate, and banning the company’s CEO Elizabeth Holmes from owning, operating, or directing a lab for at least 2 years.
“Theranos is not conducting patient testing at its Newark facility,” the company said in a statement. “In addition, since CMS originally announced the imposition of sanctions, Theranos has made substantial progress toward correcting the deficiencies CMS identified,” Theranos said.
Theranos summarized its progress as appointing new laboratory leadership, strengthening its clinical policies and procedures, and revamping training programs.
“While the appeal is pending, Theranos intends to continue communicating with CMS regarding the possibility of reaching a mutually agreeable resolution to this matter,” Theranos added.
CMS is one of numerous federal and state agencies that have investigated the business model and diagnostic tests of Theranos, which once claimed that its diagnostic technology could run scores of tests using drops of blood.
On January 25, Karen Fuller, manager of CMS’ State Oversight and CLIA Branch, sent Theranos Director Sunil Dhawan, M.D., a letter declaring: “The deficient practices of the laboratory pose immediate jeopardy to patient health and safety.”
Holmes, who founded the company in 2003, 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.
CMS’ sanctions came 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.