Theranos plans to appeal CMS sanctions

Palo Alto, Calif.-based blood testing startup Theranos announced Thursday it plans to appeal CMS' sanctions on its Newark, Calif., lab.

In July, CMS revoked the lab's certification, banned it from receiving Medicare and Medicaid payments for services and levied a monetary penalty for an unspecified amount. At the same time, CMS banned founder and CEO Elizabeth Holmes from owning or operating a medical lab for at least two years.

These sanctions came after a November 2015 CMS inspection uncovered five major categories of infractions at the Newark lab. Theranos submitted a correction plan in February, but CMS said the plan was insufficient.

Theranos said in its Thursday statement it has halted patient testing at the Newark lab and has made "substantial progress toward correcting the deficiencies CMS identified" in the month since the sanctions were imposed. In particular, Theranos highlighted the new leadership at the lab, enhanced clinical policies and procedures, and revamped training programs.


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