Theranos Files Plan to Address CMS Complaints

Brian Buntz

February 16, 2016

3 Min Read
Theranos Files Plan to Address CMS Complaints

Blood-testing firm Theranos has submitted a plan to Centers for Medicare and Medicaid Services (CMS) to address deficiencies outlined in a letter from the agency that summarized that the company may have jeopardized patients.

Brian Buntz

CMS staff is presently reviewing a plan Theranos submitted Friday to correct deficient testing practices discovered by government inspectors, according to Bloomberg.

In a letter issued in late January,  CMS said the Newark, CA, lab's "deficient" hematology testing practices "pose immediate jeopardy to patient health and safety," including "serious injury, or harm, or death to individuals." CMS, which certifies laboratories under the Clinical Laboratory Improvement Amendments law, also had reported deficiencies in the company's  director, technical supervisor, and testing personnel in the lab.

The company released a statement noting that the findings "included standard and condition-level deficiencies, and one finding at the 'immediate jeopardy' level, based on a condition-level deficiency in one specific area - hematology." It added: "To be clear, that finding does not apply to the whole lab, and none of these findings relate to our Arizona lab, where we currently process over 90 percent of our tests."

Some of the company's biggest clients, most notably Walgreens and BlueCross, are threatening to cut ties with the company in the wake of negative news surrounding the company, including a series of damning articles from the Wall Street Journal, the release of 483 letters from FDA, and the aforementioned CMS letter. After the CMS letter was issued, Walgreens issued a statement that it will not work with Theranos for blood tests until "all issues raised by [regulatory authorities] have been fully resolved."

Details of Theranos' plan to address the problems haven't been made public yet.

The company, however, has hired a new lab director to oversee the changes and is working to correct personnel problems outlined in the CMS letter.  

The problems outlined in the letter related to the company's facility in Newark, CA--not its Arizona lab near Phoenix where it performs the majority of its tests.

In related news, Propublica released an interview with the Wall Street Journal reporter John Carreyrou, who had received a tip from a person alleging that "things were not as they seem at Theranos" and that the company may have endangered public health.

"I had ex-employees telling me that they questioned the accuracy of the Edison machine [Theranos' proprietary lab instrument], and that Theranos was also doing things like diluting small blood samples in order to create a bigger volume to run them on commercial analyzers," he told Propublica.

The company had received $750 million of funding and had been valued at $9 billion--similar to lab testing behemoths Labcorp and Quest Diagnostics.

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