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In a statement issued late Thursday, Theranos announced that it had received notice from the US Centers for Medicare and Medicaid Services (CMS) that it is facing severe sanctions. In addition to the Holmes lab ban, the feds have revoked the company’s California lab license, issued an unspecified monetary penalty, and announced that Theranos will no longer receive Medicare and Medicaid payments for all lab services. The company was also given a list of corrective measures. It’s a huge setback for the biotech firm, once heralded as the future of the industry.

Theranos came under intense scrutiny last October following a scathing report in the Wall Street Journal questioning the company’s claim that it could perform a slew of blood tests using just a few drops of blood, while also citing deficiencies in its laboratory practices. Earlier this year, the CMS told the startup that its California facility posed “immediate jeopardy to patient safety,” and that it needed to get its act together. Theranos was unable to remedy the problems, resulting in the sanctions.

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Image: By Photo by Max Morse for TechCrunch TechCrunch – TechCrunch Disrupt San Francisco 2014, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=45609023

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