Thomson Reuters
Elizabeth Holmes, CEO of Theranos, attends a panel discussion during the Clinton Global Initiative's annual meeting in New York
Theranos CEO Elizabeth Holmes and President Sunny Balwani may be banned from the blood-testing business for two years, according to a report from the Wall Street Journal.
In a letter uploaded by The Journal, the Centers for Medicare and Medicaid Services said it plans to revoke Theranos' California lab's license. The other letter, not yet released to the public, details the two-year suspension of Balwani and Holmes, which would bar them from owning or operating any lab.
Barbara Cammarata, a lawyer at Sidley Austin LLP, told The Journal that the penalties are some of the most severe that CMS can dish out. "They're in a lot of trouble," she told The Journal.
The sanctions, per the March 18 letter, were, "Based on the finding of immediate jeopardy and the laboratory's failure to meet all CLIA Condition-level requirements, and based on the failure by the owners and director of the laboratory to comply with certificate requirements and performance standards as evidenced by the deficiencies cited during the CLIA certification and complaint survey completed on December 23, 2015."
The sanctions outlined in the CMS letter include:
- Revoking the California lab's CLIA license after 60 days.
- Barring the lab from the Medicare program.
- Cancellation of the lab's approval to receive Medicare payments.
- Limiting Theranos' hematology CLIA certification after eight days.
- The lab could also be fined $10,000 per day for each day it isn't compliant with CMS.
- Providing CMS with a list of all the physicians and clients who have used the lab since January 2014.
This is developing.