ENFORCEMENT

CMS Scrutiny Continues for Theranos

By Ron Shinkman, Editor, Laboratory Industry Report

The Theranos saga has just entered its most critical state, as the Centers for Medicare & Medicaid Services (CMS) recommended the company’s CLIA certification be revoked for its California lab only days after its scathing inspection report was made public. CMS recommended that Theranos lose its CLIA certification unless the lab provides evidence why the recommended sanctions shouldn’t be imposed. That was based on an inspection that took place late last year where the agency determined Theranos’ hematology testing, analytics and high-complexity testing were not accurate and posed an immediate danger to patients. CMS has concluded that the corrective actions taken by Theranos were not credible, pointing out numerous instances where Theranos plans were non-specific. Theranos can appeal the revocation if it is imposed. It also recommended limitations on the lab’s performance of hematology assays that would take place almost immediately. Theranos faces a $10,000 daily fine for non-compliance. CMS has also requested a list of all providers who have used the lab since January to notify them of the ongoing issues at the facility.

Meanwhile, a group of researchers from one of the most prestigious teaching hospitals in the nation questioned the validity of Theranos’ testing platform and Theranos announced appointment of a new scientific and advisory board jam-packed with health care luminaries. For more in-depth coverage of this study and CMS’ actions concerning Theranos, see the April 21 issue of Laboratory Industry Report.

Finally, on Monday, Bloomberg and The Wall Street Journal reported that in a memo to Theranos partners the company revealed it is the subject of investigation by the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office for the Northern District of California. Theranos Chief Executive Officer Elizabeth Holmes also appeared on NBC’s Today show Monday morning in an interview with Maria Shriver and indicated she was "devastated" that her company didn’t catch problems earlier and vowed to fix them.

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