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Government report slams Theranos for quality control, unqualified personnel

Unlicensed personnel reviewed and released patient test results

Photo by Kimberly White/Getty Images for Fortune

Theranos' blood tests often failed to meet the lab's own standards, a redacted inspection report released by the US Centers for Medicare and Medicaid Services revealed today. Theranos also employed unqualified staff and had them review patient test results. Because of this, and other errors, a Theranos lab posed "immediate jeopardy to patient safety."

"We’ve made mistakes in the past."

Despite not having completed the proper training, members of Theranos' Newark, California laboratory staff ran and reported test results to patients over a period of months in 2015. The document also reveals that Theranos put its customers at risk when it failed to have a manual on hand that outlined the actions staff needed to take when quality control results didn't meet the lab's own criteria. In addition, Theranos failed to document calibration of the machine it uses for hematology tests. It also didn't ensure proper quality control for a test used to determine how long blood takes to clot before reporting results to patients. A CMS spokesperson declined to elaborate on the contents of the document.

"We’ve made mistakes in the past in the Newark lab," Theranos spokesperson Brooke Buchanan told The Verge in an emailed statement. "But when the company was made aware of the deficiencies," Theranos "dedicated every resource to remedy those failures."

The 147-page redacted report that the US government sent to The Verge late today describes the results of an inspection that occurred in November 2015. It comes two months after the public release of a letter that CMS sent to Theranos at the end of January. The letter stated that the blood-testing company had 10 days to take action and fix deficiencies identified by inspectors during the inspection that ended in December. If Theranos failed to fix these issues, its lab could have lost its certification and CMS could have canceled its approval for Medicare payments, forcing the lab to shut down. CMS also said that it could fine the company up to $10,000 for each day that the lab was non-compliant. Some of the information contained in the inspection report was previously reported by The Wall Street Journal, but until now the exact nature of the deficiencies found at Theranos' Newark lab had not been made public. Today's report, which The Wall Street Journal has obtained in full, reveals just how careless Theranos was with its tests and the way it managed personnel.

One testing staff member had a bachelor's degree in "Liberal Studies"

Out of the 11 testing personnel files that US officials reviewed, eight "did not include any documentation of training" for a device prior to running patient blood tests on that device (the document was redacted at Theranos' request, so it's unclear which machine it was referred to). In addition, two out of three technical supervisors couldn't produce documentation showing that they had the right training for hematology or immunology tests. The inspectors also found that between June 1st and September 21st, 2015, unlicensed staff members reviewed patients' test results — even though the lab "has a sufficient number of individuals who meet the qualification requirements," the report states. One member of Theranos' testing staff, for instance, had a bachelor's degree in "Liberal Studies," inspectors noted.

The redacted report also appears to substantiate the conclusions of a study published this week, which showed that results from some of Theranos' blood tests are systematically lower than they should be. In the case of the blood clotting test, quality control data showed that patient test results were "lower than it should have been reported," the report states.

Theranos' inventions performed poorly

In addition, the unredacted report that the WSJ obtained shows that 13 tests conducted on Theranos' inventions have been performing poorly. For instance, 29 percent of the quality control checks performed on the company's inventions in October 2014 fell outside the normal range. In early February, a hormone test run on Theranos proprietary machines failed 87 percent of quality control checks. The WSJ also reveals that a test used to detect prostate cancer failed quality control verifications 22 percent of the time between April and May 2015.

The startup has already submitted a correction plan for these deficiencies. These changes included hiring a new lab director and voiding patient "results associated with any findings that were not consistent with the quality standards the lab holds itself to today," Buchanan told The Verge. Theranos also told the WSJ last month that it had notified all patients who were affected by the findings.

These gestures may not be enough to save Theranos' reputation. In January, Theranos' most prominent partner, the drugstore chain Walgreens, asked Theranos to stop sending blood samples collected at its clinics inside Walgreens stores to its Newark Lab. Walgreens has suspended Theranos laboratory testing services at its store in Palo Alto, California. One month later, the Financial Times reported that the drugstore company was trying to sever ties with the company. Theranos currently operates 40 clinics inside Walgreens stores in Arizona.