Elizabeth Holmes barred from running lab for 2 years

CMS has banned Elizabeth Holmes, founder and CEO of Palo Alto, Calif.-based Theranos, from owning or operating a medical laboratory for at least two years.

Regulators also revoked the certification for Theranos' lab in Newark, Calif., and prohibited the lab from taking Medicaid and Medicare payments for its services. Last November, a CMS inspection revealed five major categories of infractions at the Newark lab. The company submitted a correction plan in February, but CMS concluded it was insufficient.

"We accept full responsibility for the issues at our laboratory in Newark, Calif., and have already worked to undertake comprehensive remedial actions," Ms. Holmes said in a statement. "Those actions include shutting down and subsequently rebuilding the Newark lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures."

CMS also levied a monetary penalty for an unspecified amount against the embattled blood-testing startup.

The sanctions take effect in 60 days.

More articles on Theranos:

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Theranos recalls tens of thousands of tests: 7 things to know

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