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• Moreover, in accordance with Section 1902(a)(9)(C) of the Social Security Act and 42 C.F.R. §§ 440.30(c) and 493.1809, payment under the Medicaid program, Title XIX of the Social Security Act, will no longer be available to the laboratory for all laboratory services effective September 5, 2016. See 42 C.F.R. § 440.2(b).

As the laboratory was previously advised, the above sanctions cannot be avoided by the closure of the laboratory, discontinuation of testing, voluntary withdrawal from the CLIA program, or changes in certificate to a lower level of testing.

Appeal Rights

If Theranos, Inc. does not believe that the determination upon which imposition of the sanction is based is correct, the laboratory may request a hearing before an administrative law judge (ALJ) of the Departmental Appeals Board (DAB) in accordance with 42 C.F.R. §§ 493.1844 and 498.40 - .78. A request for hearing must be filed electronically no later than sixty (60) calendar days after the date this letter is received. See 42 C.F .R. § 493 .l 844(f); DAB Civil Remedies Division Procedures (CDRP), § 2(b) (Effective January 1, 2015). You should file your request for an appeal (accompanied by a copy of this letter) via the DAB Electronic Filing System website (DAB EFile) at dab.efile.hhs.gov. Should you choose to file an appeal, you are required to e-file your appeal request unless you received a waiver from the DAB. See DAB CDRP §§ 2(b) and 6, available at www.hhs.gov/dab/divisions/civil/procedures/%20divisionprocedures.html. Please note: all documents must be submitted to DABE-File in Portable Document Format ("pdf').

A hard copy of the hearing request should be sent to:

Karen Fuller, Manager
State Oversight and CLIA Branch
Division of Survey and Certification
Centers for Medicare & Medicaid Services
90 Seventh St., Suite 5-300 (SW)
San Francisco, California 94103-6707

The request for hearing must contain a statement as to the specific issues and findings of fact and conclusions of law in this determination with which the laboratory disagrees and the basis for the laboratory's contention that the specific issues and/or findings and conclusions are incorrect. Evidence and arguments may also be presented at the hearing, where counsel may represent the laboratory at its own expense.

If a hearing is conducted and CMS' determination is upheld, the laboratory win be assessed a fee to cover the government's cost related to the hearing. See 42 C.F.R. § 493.643(d)(2).

As noted above, if a timely request for hearing is filed, i.e., by September 5, 2016, CMS will not revoke the CLIA certificate until after an ALJ hearing that upholds the sanction determination. However, cancellation of all Medicare payments is effective September 5, 2016, regardless of whether a hearing is requested. See 42 C.F.R. § 493.1844(d)(1)-(3) and (h)(1).

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