Theranos Files Plan to CMS for Fixing California Lab Problems

Theranos Inc. filed a plan to U.S. regulators to fix serious deficiencies at the company’s blood-testing lab in Newark, California, as founder Elizabeth Holmes works to regain credibility for her struggling startup.

The company submitted the proposed plan of correction late Friday to the Centers for Medicare and Medicaid Services, CMS spokesman Aaron Albright said in an e-mail.

“Our staff is currently reviewing it,” Albright said. 

Theranos also confirmed the filing, though it didn’t release details of the plan.

CMS said in late January that Theranos’s violations of federal regulations posed “immediate jeopardy” to patients’ health and safety.

Closely held Theranos attained a $9 billion valuation on Holmes’s claims that its technology was capable of performing lab tests more cheaply than rivals, in many cases using just drops of blood from a patient’s finger. The Palo Alto, California-based company now says it’s using its proprietary “nanotainer” collection-tube technology in only one of about 200 tests offered.

Walgreens Boots Alliance Inc. and the Pennsylvania insurer Capital BlueCross have said they’re curtailing use of Theranos’s tests while the shortcomings identified by CMS are addressed. Theranos has hired a new lab director and said it’s working quickly to correct other problems, including personnel issues, along with the defects tied to blood testing.

“We value engagement with our regulators, and are committed to ensuring that all our labs operate at the highest standards,” Theranos said in a January statement. The company noted at the time that the government findings didn’t apply to its Arizona lab, where most of its testing is done.

CMS is the main government regulator of clinical laboratory tests, with authority to inspect facilities and enforce standards. The U.S. Food and Drug Administration is responsible for approving some tests and devices.