Theranos founder and CEO Holmes banned from CA lab operations for 2 years

Elizabeth Holmes sitting at a table
Elizabeth Holmes, founder and CEO of Theranos

Theranos has received notice from the Centers for Medicare & Medicaid Services of specific impositions of sanctions due to a 2015 survey of the Newark, CA, lab.

The sanctions include revocation the lab's CLIA certificate which, in turn, would result in the barring of the laboratory’s owners and operators from owning and operating the lab for two years. That means the now-infamous Elizabeth Holmes, Theranos’ founder and CEO, will have to wait two years before gaining back control of her lab.

Theranos will also face a limited CLIA certificate in the specialty of hematology, a civil money penalty, suspension of the lab's approval for Medicare and Medicaid payments in hematology and all laboratory services, and a directed portion for a plan of correction.

Holmes has taken full accountability for the problems at the lab, and expressed in a statement that the company has “already worked to undertake comprehensive remedial actions.”

The planned actions include shutting down the lab and rebuilding it from the ground up, along with rebuilding its quality systems. When it comes to human capital, Theranos has plans to invest in “highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures,” Holmes said.

The CLIA revocation won’t take effect for 60 days, but the company will not conduct any new testing in the Newark lab until further notice. The Arizona lab will continue to provide services to customers.

Theranos and in turn, Holmes, have been making headlines for quite a while now due to concerns over the legitimacy of blood tests from Theranos-owned and operated labs. Some of the most recent news on that front came in March, when researchers noted that test results from Theranos had irregular results more often than those from rivals Quest Diagnostics ($DGX) and LabCorp ($LH).

Results published in the Journal of Clinical Investigation explained that test results from Theranos were outside the normal range for tests 12.2% of the time. Compare this to LabCorp, which sees irregular results only 8.3% of the time, and Quest, which produces irregular results only 7.5% of the time.

- here's the press release

Related Articles: 
Theranos slammed again after new study points to testing flaws
Theranos CEO opens up about lab transgressions, 'devastated' by the fallout