We now know the full extent of the concern over compliance issues at Theranos’ Newark, California lab thanks to new documents TechCrunch has obtained under the Freedom of Information Act (FOIA).
The Centers for Medicare and Medicaid Services (CMS) began a federal investigation into the practices at Theranos’ main facility in Newark last fall involving erratic test results and unqualified personnel.
The newly released letter and documentation dated March 18, 2016, highlight what CMS labeled “serious deficiencies” in the testing at Theranos’ main lab, putting patient health and safety in “immediate jeopardy.”
CMS found the blood analysis startup continued to fail compliance requirements since an initial visit in November 2015, and again accused Theranos of being out of alignment with at least five CLIA condition-level requirements in January 2016, including hematology testing, analytic systems, a sufficient lab director for complex-level testing for proper technical workers and proper technical supervision.
CMS gave Theranos 10 days to get with the program before leveling fines of up to $10,000 per day for every day the lab continued to be out of accord.
However, Theranos asked for an extension from CMS in February of this year, which CMS granted.
By March 2016, CMS found Theranos’ main lab continued to side-step compliance issues and decided the startup’s reasoning for compliance was unsatisfactory.
CMS granted the startup time to address the deficiencies and submit a corrective course of action since then. Theranos has also been busy hiring a new medical board, a new lab director and more qualified personnel to appease the federal agency.
However, the recent U-turn may not be enough to reverse the damage done.
Theranos founder Elizabeth Holmes is now under criminal investigation from the U.S. Attorney’s Office, as well as an investigation from the Securities and Exchange Commission for possibly defrauding investors. She may even be barred from operating her own company for up to two years.
Theranos spokesperson Brooke Buchanan shared with TechCrunch a portion of the ongoing communication with CMS earlier this month, adding, “The company continues to work closely with regulators and is cooperating fully with all investigations.”
And Holmes told Maria Shriver during a recent interview on the Today Show she felt “devastated [we] did not catch and fix these issues faster.”
However, Theranos failed to adequately adjust practices and comply with CMS time and time again. Though it seems the board stands by their founder and the company is working on getting into alignment with federal agencies, it may be too little, too late to patch up relations in the public eye.
A CMS spokesperson declined to elaborate on the documents out today, but you can view for yourself the correspondence between the two organizations.