Elizabeth Holmes, CEO and Founder of Theranos.
Elizabeth Holmes, the disgraced and imprisoned founder of the infamous blood testing startup Theranos, has been barred from participating in federal health programs for 90 years, the paper reported. Friday’s announcement from the health department.
This exclusion means that Ms. Holmes will be prohibited from receiving payments from federal health programs for services or products, which will significantly limit her ability to work in the medical field. She will also no longer be eligible to participate in Medicare, Medicaid, or other federal health programs. Her term is 90 years, and for Ms. Holmes, now 39, this exclusion will be for the rest of her life.
The exclusion was announced by Inspector General Christie Grimm of the Department of Health and Human Services’ Office of Inspector General.
Holmes is serving an 11-year, three-month prison sentence for defrauding investors in Theranos, a blood testing startup he founded in 2003. At the time, Holmes claimed to have developed a unique technology that could perform hundreds of medical tests using only a small amount of force. A small drop of blood from a finger prick. This remarkable advocacy of hers allowed her to forge lucrative partnerships that boosted her company’s valuation to an astonishing $9 billion in 2014. But in reality, the technology never worked. The company went bankrupt in 2018, and she was convicted of fraud in 2022.
In today’s announcement, the Department of Health pointed out that the statutory minimum period of exclusion for convictions like Holmes’ is only five years. However, other factors are also taken into account when determining the period, such as the period over which the fraud was committed, the length of the prison sentence, and the amount of restitution ordered. In addition to the 11-year sentence, Holmes was ordered to pay approximately $452,047,200 in restitution, HHS-OIG noted.
“Accurate and reliable diagnostic testing technologies are essential to our nation’s public health infrastructure. Misstatements related to the reliability of these medical products endanger patient health and undermine our nation’s health care system. It can lead to mistrust,” Grimm said. “As technology evolves, so do our efforts to protect patient health and safety, and HHS-OIG will continue to use its removal authority to protect the public from bad actors.”
HHS-OIG also excluded former Theranos President Ramesh Balwani from federal health programs for 90 years. Mr. Balwani was also convicted of fraud and is serving a nearly 13-year sentence.
