The US government has its eye on Theranos, the blood-testing company once valued at $9 billion.
In an inspection last November that has just come to light, the US Centers for Medicare and Medicaid Services (CMS) found that one of the company's laboratories was "not in compliance" with the conditions required for certification.
"It was determined that the deficient practices of the laboratory pose immediate jeopardy to patient health and safety," the agency concluded.
Even without knowing the details — the complete CMS report has not yet been released — this kind of language "implies serious infractions that require immediate remedy," Jerry Yeo, director of clinical chemistry laboratories at the University of Chicago, told Tech Insider. "It is highly unusual and rare for a [government-certified] lab to get such a grave warning letter from CMS."
He called it "a very damning letter, but necessary to protect the safety and well-being of patients."
The Theranos lab's five areas of noncompliance, detailed in a cover letter to the report sent to the company and uploaded by The Verge, were:
- analytic systems
- laboratories performing high-complexity testing (laboratory director)
- laboratories performing high-complexity testing (technical supervisor)
- laboratories performing high-complexity testing (testing personnel)
The deficiency related to hematology, a broad category that includes many of the basic requirements of laboratory tests, was the most serious. That was the one categorized as posing "immediate jeopardy" to patients. Only 0.5% of labs in the country are deficient in hematology, according to a January 2016 report from CMS. That means that just 95 out of more than 17,000 labs surveyed had deficiencies in this category.
The other deficiencies found at the Theranos lab were also relatively rare: 1.3% of labs are deficient in meeting the requirements for their analytic systems, 1.5% are deficient in meeting the requirements for a laboratory director, 0.3% are deficient in meeting the requirements for a technical supervisor, and 0.5% are deficient in meeting the requirements for testing personnel.
Here's what CMS requires for a lab to be in compliance with testing personnel, for example:
The laboratory must have sufficient number of individuals who meet the qualification requirements concerning State licensure, if applicable, and the educational requirements for High complexity personnel ... to perform the functions of high complexity personnel ... for the volume and complexity of testing performed.
According to Yeo, who reviewed the CMS letter, these kinds of deficiencies — especially in so many different areas — are not standard problems.
"I can see getting some deficiencies but getting serious deficiencies on something as basic as having qualified personnel is very disconcerting," he said. "My read on this is that CMS must have found that there is a pattern of serious violations that have gone on for a while."
Theranos has 10 days from the day it received the letter, January 25, to submit evidence to CMS showing that they have corrected the deficiencies.
Eleftherios Diamandis, a professor of laboratory medicine and pathobiology at the University of Toronto who has been skeptical about Theranos before, reviewed the letter from CMS and told Tech Insider that this qualifies as "a very serious incident ... which may cause the lab to lose its license."
Still, he was careful to note that it's hard to evaluate accurately without the full report detailing exactly what the deficiencies are.
A "lab usually goes into panic mode to correct the deficiency within 10 days," he said, but it's difficult to know yet whether Theranos will be able to so quickly correct the problems CMS found.
In a statement, Theranos played down the deficiencies, noting that the report from months ago "does not reflect the current state of the lab."
As the survey took place we were simultaneously conducting a comprehensive review of our laboratory's systems, processes and procedures ... We are still reviewing the report, but we addressed many of the observations during the survey and are actively continuing to take corrective action. To be clear, [the hematology deficiency] does not apply to the whole lab, and none of these findings relate to our Arizona lab, where we currently process over 90 percent of our tests.