In Brief: CMS Issues Warning Letter To Theranos; Prime Obtains $700 Million Credit Facility
CMS Issues Warning Letter To Theranos On Testing Platforms
The Centers for Medicare & Medicaid Services (CMS) has issued a warning letter to Palo Alto-based medical laboratory Theranos, saying the “deficient practices of the laboratory pose immediate jeopardy to patient health and safety.”
The immediate jeopardy declaration was for Theranos’ hematology testing apparatus, although CMS also found deficiencies in its analytic systems and its overall supervision.
Theranos obtained a $9 billion valuation based in part of its claimed development of a platform that could perform most laboratory tests involving just a few drops of blood. But last year the U.S. Food and Drug Administration restricted use the platform to a single test. The company has also been the subject of highly skeptical reporting by the Wall Street Journal.
Theranos issued a statement saying that “it’s important to note this particular (CMS) survey was conducted months ago and is not a reflection of the current state of our lab in Newark, CA. As the survey took place we were simultaneously conducting a comprehensive review of our laboratory’s systems, processes and procedures to ensure that we have best-in-class quality systems.” It added that the inspection did not include its Arizona facility, where it currently conducts 90% of its tests.
Theranos said that since the inspection it has hired a new lab director and clinical consultant.
Prime Obtains $700 Million Credit Facility
Hospital operator Prime Healthcare Services has received a $700 million credit facility jointly from Wells Fargo and Barclays Banks.
Prime CEO Prem Reddy, M.D., indicated that the facility would be used to further the company’s acquisition of hospitals. "This financing is a significant step in furthering our growth strategy of turning around and improving essential community hospitals throughout the country,” he said.
The facility is comprised of a $400 million revolving credit line, a $200 million term loan and access to a $100 million “accordion” credit. That last feature allows an increase in loan amounts if it is for a specific goal, such as acquiring a particular healthcare facility.
Prime owns or operates 37 acute care and rehabiliation hospitals in 11 states.
Kaiser Discloses Reasons For Website Issues
Oakland-based Kaiser Permanente issued a statement this week explaining why consumers had recent issues accessing its website.
The Oakland-based Kaiser attributed the slowdown to an increase in what it described as “post-holiday” surge in website traffic that led to intermittent outages. It noted that at no time was its website completely unavailable.
The company said the slowdown did not involve a hack or other malicious activity.
“We regret the intermittent access problems last week,” Kaiser said in a statement.
