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Health Insurer Orders Theranos To Stop Drawing Patients' Blood

More bad news for the medical-technology "unicorn."

[Photo: Flickr user Partha S. Sahana]

Another day, another snag for Theranos, the blood-testing startup with a $10 billion valuation.

On the heels of federal health inspectors citing the company's California lab with "deficiencies" that put patients in "immediate jeopardy," Capital BlueCross has ordered Theranos to stop drawing blood from patients at its retail store in Enola, Pennsylvania.

Capital BlueCross, Pennsylvania's largest insurer, had initially announced a partnership with Theranos in July 2011. Under the terms of the partnership, Theranos had a green light to perform blood tests at the Capital BlueCross retail store in Enola. But today, Capital BlueCross said in a statement that it "had requested and Theranos has agreed to suspend its proviso of the law draws in the Capital Blue retail store in Enola until further notice."

"Patient health and access to reliable health information are paramount to Theranos and Capital BlueCross," Theranos said in a statement. "Theranos is actively fixing all issues raised recently by CMS about our Newark, CA lab. Our highest priority is ensuring quality."

This news comes just one day after Walgreens ordered Theranos to stop sending the clinical laboratory tests collected from its 40 Theranos Wellness Centers at Walgreens pharmacy locations in Arizona to the startup’s California lab. Theranos initially claimed to have highly secretive proprietary technology that could perform hundreds of blood tests with a mere drop of blood. But in recent months, regulators and the press have questioned the reliability and efficacy of its methods.

Earlier this week, Theranos' facility in Newark, California, was cited for at least five deficiencies related to hematology, documentation, and oversight by the Centers for Medicaid and Medicare Services, or CMS. CMS threatened to suspend the laboratory's license, or impose sanctions, if Theranos did not provide a plan of action to resolve these issues within 10 days.

In a statement, Theranos stressed that it only processes about 5% to 10% of its lab work in the California lab. And CMS's findings do not extend to its lab in Arizona, where it processes the majority of its samples.

"This week’s CMS findings relate solely to certain aspects of a different lab—our Newark, CA lab—and do not reflect the current state of that lab," Theranos spokeswoman Brooke Buchanan said. "This is an issue that many other labs have faced, and we have been and will fix it quickly and completely, working with our regulators as we always do. We are open for business, confident in our technologies, and unwavering in our commitment to provide Arizonans with the care and service they deserve."

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