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DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Western Division of Survey and Certification
San Francisco Regional Office
90 7^th Street, Suite 5-300 (5W)
San Francisco, CA 94103-6707

Refer to: WDSC-GKY

IMPORTANT NOTICE – PLEASE READ CAREFULLY

March 18, 2016

Sunil Dhawan, M.D., Director
Elizabeth Holmes, Owner
Ramesh Balwani, Owner
Theranos, Inc.
7333 Gateway Boulevard
Newark, CA 94560

CLIA Number: 05D2025714

RE:

PROPOSED SANCTIONS – CONDITIONS NOT MET IMMEDIATE JEOPARDY. IMPOSITION NOTICE TO FOLLOW IF PROPOSED SANCTIONS ARE IMPOSED.

Dear Dr. Dhawan^[1], Ms. Holmes, and Mr. Balwani:

This letter provides notice of sanctions the Centers for Medicare & Medicaid Services (CMS) is proposing to impose against the laboratory's Clinical Laboratory Improvement Amendments of 1988 (CLIA) certificate and of the laboratory's opportunity to submit in writing any evidence or information as to why the proposed sanctions should not be imposed. If the sanctions are imposed, we will provide the laboratory with a separate notice setting forth hearing rights and explaining the administrative appeals process.

CMS conducted a CLIA recertification and complaint survey at Theranos, Inc. ("Theranos" or "laboratory"). The onsite portion of the survey was completed on November 20, 2015; however, the survey concluded with the receipt of critical information received from the laboratory on December 23, 2015. Based on this survey, Theranos was found to be out of compliance with the following five CLIA Condition-level requirements:

D5024: 42 C.F.R. § 493.1215	Condition: Hematology;
D5400: 42 C.F.R. § 493.1250	Condition: Analytic systems;
D6076: 42 C.F.R. § 493.1441	Condition: Laboratories performing high complexity testing; laboratory director;
D6108: 42 C.F.R. 493.1447	Condition: Laboratories performing high complexity testing; technical supervisor; and,

↑ Theranos, Inc.'s February 12, 2016 submission states: "The laboratory directors during the period covered by the survey no longer hold any position with the lab." However, because Dr. Dhawan was the laboratory director at the time of the CLIA recertification and complaint survey concluded on December 23, 2015, we will continue to hold Dr. Dhawan responsible for all CLIA deficiencies cited. We will continue to address all notices related to the December 23, 2015 CLIA survey to Dr. Dhawan and Theranos, Inc. (We note that the February 12 submission indicates that Kingshuk Das, M.D., had since been appointed the laboratory's director.)

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[1] Theranos, Inc.'s February 12, 2016 submission states: "The laboratory directors during the period covered by the survey no longer hold any position with the lab." However, because Dr. Dhawan was the laboratory director at the time of the CLIA recertification and complaint survey concluded on December 23, 2015, we will continue to hold Dr. Dhawan responsible for all CLIA deficiencies cited. We will continue to address all notices related to the December 23, 2015 CLIA survey to Dr. Dhawan and Theranos, Inc. (We note that the February 12 submission indicates that Kingshuk Das, M.D., had since been appointed the laboratory's director.)

[1]