A California lab, owned by Theranos, a Silicon Valley company, was targeted by the Centers for Medicare and Medicaid Services (CMS) for not being in compliance with its regulation, in November. The CMS is responsible for monitoring clinical laboratories. The lab was found to have gone through deficient practices, which could be a danger to health and safety of patients. The company has 40 retail locations across metro Phoenix. The company said it has already corrected the fallouts and would continue to meet regulations.

The CMS inspectors found five lab areas in problem, and the most serious one was hematology, when they inspected the Newark, Calif., lab on November 20. Following, the body has issued direction to Theranos to correct an infraction that has potential to cause harm.

The federal agency has provided Theranos with 10 days to come up with evidences of correction. Theranos' lab responded to the warning on 23 December."We value engagement with our regulators, and are committed to ensuring that all our labs operate at the highest standards, we are still reviewing the report, but we addressed many of the observations during the survey and are actively continuing to take corrective action", said Brooke Buchanan, a Theranos spokeswoman.

Besides to hematology, Theranos was not in accordance with standards in its analytic systems, lab director, technical supervisor and testing Personnel. The Company stated it had revised the policies and had changed personnel. Theranos had hired pathologist Kingshuk Das as its Newark lab director and Dr. Waldo Concepcion as new clinical consultant. If the Theranos is found not to bring improvement, then lab would be liable for paying $10,000 of fines for each day of non-compliance. The penalties could involve suspension of the lab's certificate.