The Theranos case continues to resonate in the lab community, reminding professionals of the importance of validation, transparency, and accountability.
Elizabeth Holmes, the former CEO of Theranos whose company became synonymous with laboratory fraud, has formally requested an early release from federal prison, renewing attention on one of the most consequential scandals in modern diagnostics.
According to filings with the US Department of Justice’s Office of the Pardon Attorney, Holmes has asked President Donald Trump to commute her sentence, a request that remains under review. If granted, the commutation could shorten her 11-year sentence by nearly six years.
Holmes was convicted in 2022 on multiple counts of wire fraud and conspiracy for misleading investors about Theranos’ blood-testing technology. She began serving her sentence in 2023 at a minimum-security federal prison camp in Bryan, Texas, and is currently scheduled for release on December 30, 2031. Both CNN and ABC News report that a federal appeals court last year upheld Holmes’ conviction, sentence, and a $452 million restitution order that she shares with former Theranos President Ramesh “Sunny” Balwani.
When Hype Outruns the Science
For clinical laboratory professionals, the case remains a stark reminder of the consequences when scientific validation is subordinated to hype.
Theranos claimed it could run hundreds of diagnostic tests using only a few drops of blood—assertions that, if true, would have dramatically reshaped laboratory workflows, patient access, and cost structures. Instead, investigations revealed that the company relied heavily on conventional analyzers while misrepresenting the performance and use of its proprietary technology.
Elizabeth Holmes is currently serving an 11-year sentence at the Federal Prison Camp in Bryan, Texas, for defrauding investors in her company, Theranos; she began her sentence in May 2023 and is eligible for release in December 2031, though she recently asked President Trump to commute her sentence for early release. (Photo credit: Wikimedia Commons.)
The appeals court ruling reinforced a critical principle for the diagnostics industry: financial success, celebrity boards, and political connections do not insulate companies from accountability when analytical validity and transparency are lacking. Judges rejected arguments that legal errors tainted the trial and upheld restitution based on the full amount investors lost, underscoring how severely courts view deception tied to medical testing claims.
As noted by The Dark Report during Holmes’ trial in 2021, testimony provided a series of lessons about how directors of a CLIA-certified labs can be held accountable for violations of federal and state laws.
Why Theranos Still Matters
Holmes’ renewed online visibility has also drawn renewed attention within the laboratory and diagnostics community. According to the CNN article, in recent months, posts have reappeared on her X account, including messages praising Trump’s healthcare affordability efforts and asserting her innocence. While the White House does not comment on pending clemency petitions, the optics of a high-profile fraud case intersecting with presidential pardons, particularly in a second Trump term marked by several controversial commutations, has revived debate about accountability in healthcare innovation.
For laboratories navigating patient expectations, evolving regulatory oversight, and the growth of direct-to-consumer testing, the Theranos case remains a relevant point of reference. The case is frequently cited by regulators and payers as justification for stricter oversight of laboratory-developed tests, more aggressive enforcement actions, and heightened expectations for data integrity.
Regardless of whether Holmes’ sentence is ultimately commuted, her request serves as a reminder that trust in laboratory medicine is hard-won and easily lost. For professionals, the case underscores the importance of scientific rigor, transparent validation, and strong governance in maintaining credibility and trust.
Clinical laboratories face renewed Medicare payment uncertainty as a congressional funding impasse threatens to derail temporary PAMA relief, with new CLFS cuts scheduled to take effect in days unless lawmakers act.
Clinical laboratories are once again facing near-term Medicare payment uncertainty as congressional negotiations over a must-pass spending package stall, putting temporary relief from PAMA-driven cuts at risk just days before new reductions are scheduled to take effect.
The American Clinical Laboratory Association (ACLA) is closely tracking bipartisan, bicameral negotiations tied to a broader government funding deal that includes provisions to delay further cuts to the Medicare Clinical Laboratory Fee Schedule (CLFS). The proposal would push back additional PAMA-related reductions until Jan. 1, 2027, and update the private payor data CMS uses to set future Medicare rates. Without action, lab test reimbursement rate cuts are scheduled to go into effect on Jan. 31.
ACLA Backs PAMA Relief but Warns Structural Flaws and Imminent CLFS Cuts Remain
ACLA President Susan Van Meter said lawmakers appear increasingly aware of the structural flaws baked into PAMA’s rate-setting framework.
“ACLA appreciates that lawmakers on both sides of the aisle recognize the serious and ongoing problems posed by PAMA,” Van Meter said in a statement provided by the organization. (Photo credit: ACLA)
She emphasized that shifting the data collection period to more recent market information would represent a meaningful, though incomplete, step forward.
Under the legislative language outlined in the bill, Congress would revise the PAMA phase-in schedule by extending payment reduction caps through 2029, rather than allowing steeper cuts to resume sooner. The bill would also replace the 2019 private payor data CMS is currently set to rely on with data from 2025, addressing longstanding concerns from laboratories that Medicare rates are being calculated using outdated and unrepresentative commercial payment information.
“Updating the data collection period from 2019 to 2025 would move Medicare payment rates away from reliance on seven-year-old market data that would otherwise be used to set 2027 rates,” Van Meter said, according to the statement from ACLA. However, she cautioned that even with updated timelines, “CMS is unlikely to receive comprehensive and representative commercial data needed to set accurate Medicare rates.”
The stakes for laboratories are immediate. Without congressional action, new CLFS cuts of up to 15 percent on roughly 800 tests are scheduled to take effect on Jan. 31, adding to what ACLA described as “three previous rounds of reductions.” Lab professionals have repeatedly warned that cumulative cuts threaten the sustainability of community-based testing and could restrict patient access, particularly in rural and underserved areas.
PAMA Relief Tied to High-Stakes Funding Fight, Leaving Labs in Legislative Limbo
The PAMA provisions are embedded in a larger government funding package that now faces political headwinds. As reported in The Washington Post, Senate Democrats have indicated they will block the broader spending deal unless it is restructured, raising the possibility of a partial government shutdown. While the dispute centers on Department of Homeland Security (DHS) funding, failure to advance the package would also stall health-related provisions, including laboratory payment relief. There has been discussion about separating votes for DHS and Health and Human Services (HHS) spending, but it is not clear yet whether that will happen. The PAMA delays are tied into the HHS spending package.
That linkage is raising concern across the laboratory sector, where advocates argue that PAMA relief has long enjoyed bipartisan support and should not become collateral damage. Van Meter urged lawmakers to move quickly, calling the proposal “a down payment toward lasting PAMA reform” and pressing Congress to advance the bipartisan RESULTS Act this year.
For lab professionals, the outcome of the funding negotiations will determine whether temporary relief materializes—or whether another round of PAMA cuts proceeds as scheduled, further reshaping the Medicare testing landscape just as laboratories continue to adapt to tightening margins and rising operational costs.
New recommendations highlight the limited impact of routine urine drug testing in the ED while calling on laboratories to refine test menus, expand fentanyl screening, and improve clinician education to better support trauma care, behavioral health referrals, and evolving regulatory demands.
Emergency department (ED) drug testing remains a common but often misunderstood tool. New guidance from the Association for Diagnostics & Laboratory Medicine (ADLM) underscores the need for laboratories to take a more deliberate, evidence-based role in how testing is ordered, performed, and interpreted.
“Toxicology testing in the emergency department (ED) is generally performed to detect either drugs with recreational or misuse potential, or a broad array of toxic or poisonous compounds,” the guidance notes. This document focuses on the first category, historically referred to as “drugs of abuse” (DOA). While the term “abuse” “can imply a stigma, and is not a comprehensive term given the range of intended uses for these compounds,” it remains “a well-known historical term and description.”
Although resources exist for language describing individuals who use these substances, the document emphasizes that “there is no single preferred term to describe nonmedical use of these drugs.” Alternatives such as “recreational,” “controlled,” “illicit,” or “non-prescribed” drugs were considered, but “none of these terms fully captures the range of clinically relevant scenarios involving use of these compounds.” For this guidance, the term “drugs of misuse” is used “as a parallel to the historical DOA terminology,” while acknowledging that “future efforts should prioritize development of less-stigmatizing language that more accurately reflects the range of uses for these compounds.”
Urine Drug Testing
According to ADLM’s guidance, ED and laboratory staff should work collaboratively to establish objective protocols or clearly defined clinical rationales for ordering drug testing in both adult and pediatric patients, keeping in mind that urine drug testing (UDT) results rarely alter acute emergency management. Experts note that UDT is most often used in adults to assess trauma cases, altered mental status, or possible substance use contributing to psychiatric symptoms, yet routine testing has limited clinical value.
Studies indicate that UDT can prolong ED length of stay without significantly improving detection of substance use disorders beyond patient self-report. The American College of Emergency Physicians advises against routine drug screening in alert patients or delaying psychiatric evaluation while awaiting results, though some state regulations still require testing prior to involuntary commitment. These regulatory requirements place additional responsibility on laboratories to provide rapid reporting and maintain clear communication with receiving facilities.
Laboratories should educate ED and specialty providers regarding the limitations of UDT, including the potential for false positives and false negatives, and emphasize that detection of a substance may indicate past exposure rather than current impairment or clinical effect. Assessment of which drug testing methods best support pediatric care is particularly important, given the unique clinical considerations in this population.
Ongoing collaboration between ED and laboratory teams is essential to ensure that testing practices are aligned with clinical needs, patient populations, and available resources, while supporting downstream decisions such as resource allocation, behavioral health referrals, and patient safety.
Trauma Screening and Test Menus: Balancing Clinical Value, Regulation, and Evolving Drug Use
ADLM’s new guidance document also states that trauma care represents another frequent use case for ED drug testing, with the American College of Surgeons supporting substance use screening for all adult trauma patients. Yet laboratories are cautioned against overinterpretation. A positive drug test does not necessarily indicate impairment at the time of injury, and a negative result does not rule out intoxication. For lab professionals, this reinforces the importance of educating ED clinicians on test limitations, particularly detection windows and assay cross-reactivity.
Test menu design is a central operational issue. Strongly recommended assays for all EDs include opioids and opiates—specifically fentanyl and oxycodone—along with benzodiazepines, amphetamine-type stimulants, and cocaine. Despite decades of opioid-related morbidity and mortality, proficiency testing data show many laboratories have been slow to add fentanyl testing, which is not detected by traditional opiate immunoassays. Some states now mandate fentanyl inclusion, signaling a broader trend toward regulatory pressure as drug use patterns evolve. The guideline from ADLM recommends adding fentanyl to the test menu if the lab supports an ED.
Streamlining Panels and Specimens: Focusing ED Drug Testing on What Matters Most
At the same time, laboratories are encouraged through ADLM’s new guidance to remove assays with minimal clinical utility, such as propoxyphene and tricyclic antidepressants, which are prone to false positives and reflect outdated prescribing patterns. Testing for emerging drugs, toxic adulterants like xylazine, or novel psychoactive substances is generally not recommended due to rapidly shifting prevalence and limited impact on ED management.
The inclusion of tetrahydrocannabinol (THC) and its metabolites in ED drug testing remains debated, according to the guidance. Challenges include “evolving laws for drug scheduling, legalization or decriminalization of recreational use, and provisions for regulated medicinal use,” as well as increasing use of products containing other cannabinoids like CBD or delta-8-THC. A positive THC result can occur in patients using CBD products “due to the presence of THC in the preparation.” Overall, cannabinoid testing “provides limited clinically actionable information in the ED, except in specific populations such as pediatrics.”
Evidence shows that most studies “reported increased cannabinoid-related poisonings post-legalization, particularly in children.” THC use is also associated with conditions prompting ED visits, including “cannabinoid hyperemesis, psychosis, and trauma,” though providers should note that “THC metabolites can be detected in urine long after last use.” While some research has found negative outcomes such as “increased mortality or need for mechanical ventilation after trauma,” findings are inconsistent. Legalization appears to influence testing practices, as studies show “increasing rates of positivity as legalization progressed,” and drug test results may affect healthcare utilization, with one Canadian study reporting “fewer ED orders for imaging and laboratory testing, and increased use of observation units in THC screen-positive patients.”
The laboratory should “be aware of local and national regulations when designing panels” and provide flexible options, such as “separate drug panels with and without THC, and/or having THC as a standalone orderable test.”
Urine remains the preferred testing matrix due to availability and ease of use, though oral fluid testing offers potential advantages in witnessed collection and shorter detection windows. Blood-based testing is rarely useful for acute care outside of ethanol but retains value for epidemiological and forensic analysis. Specialized matrices, such as meconium or umbilical cord tissue, continue to play a role in newborn drug exposure assessment.
Overall, the guidance calls on laboratory leaders to move beyond passive test provision. Collaboration with EDs, regular review of test menus, provider education, and alignment with local drug trends are essential to ensuring drug testing supports patient care without adding unnecessary cost or complexity to emergency services.
This article was created with the assistance of Generative AI and has undergone editorial review before publishing.
Texas Attorney General Ken Paxton is challenging Epic Systems’ handling of pediatric medical records, alleging unlawful limits on parental access and raising broader questions about data control, compliance, and oversight for providers and laboratories.
For clinical laboratory leaders, the growing legal and regulatory scrutiny of electronic health record (EHR) vendors is no longer a peripheral issue. How patient data are controlled, shared, and accessed has direct implications for test ordering, result reporting, compliance, and patient trust. That context frames a new lawsuit filed by Texas Attorney General Ken Paxton against Epic Systems Corporation, one of the nation’s most dominant health IT companies.
Paxton alleges that Epic has unlawfully monopolized the EHR market and engaged in deceptive practices that restrict parental access to minors’ medical records, in violation of Texas law. Epic’s software houses more than 325 million patient records, representing roughly 90% of the U.S. population, according to the complaint.
Providers and EHRs restrict parental access to adolescent records primarily to comply with state and federal privacy laws. In many states, including Pennsylvania, minors age 13 and older can legally consent to certain types of care—such as mental health services, substance use treatment, sexual and reproductive health, and some infectious disease testing—without parental involvement. When a minor has the right to consent, providers are legally required under state law and HIPAA to keep that related protected health information confidential.
EHR systems like MyChart enforce these rules by automatically limiting parental access when a child turns 13 and masking sensitive results or medications to prevent accidental disclosure. These controls also align with national clinical guidance, including recommendations from the American Academy of Pediatrics, which emphasize protecting adolescent confidentiality to ensure teens seek care and communicate openly with clinicians.
The lawsuit claims Epic uses “exclusionary tactics” to suppress competition, including interfering with hospitals’ ability to use their own patient data and limiting interoperability with competing software. Paxton argues these practices result in incomplete or outdated health records being shared among providers, diminishing care quality for Texas patients and increasing costs for hospitals.
For laboratories, these allegations raise concerns about data liquidity and timely access to diagnostic information. In fragmented or restricted EHR environments, lab results may not follow patients across care settings, potentially affecting clinical decision-making and continuity of care.
Parental Access to Pediatric Records at the Center of Legal Challenge
The suit also focuses on Epic’s handling of pediatric records. Paxton alleges the company automatically restricts parental access to medication lists, treatment notes, and provider messages once a child turns 12. The attorney general argues Epic does not own this data and has no authority to withhold it.
“These deceptive practices undermine the fundamental right of parents to direct their children’s healthcare,” the lawsuit states, citing Texas Health & Safety Code § 183.006, which grants parents “complete and unrestricted access” to their minor children’s medical records.
“We will not allow woke corporations to undermine the sacred rights of parents to protect and oversee their kids’ medical well-being,” Paxton said. “This lawsuit aims to ensure that Texans can readily obtain access to these records and benefit from the lower costs and innovation that come from a truly competitive electronic health records market.”
The Epic lawsuit is part of a broader enforcement push. Earlier this year, Paxton’s office reached a settlement with Austin Diagnostic Clinic requiring full restoration of parental proxy access for patients ages 12 to 17. Civil investigative demands have also been issued to other EHR vendors operating in Texas.
For lab leaders, the case underscores increasing regulatory attention on how diagnostic data are governed inside EHR systems. As states and regulators challenge vendor practices around data access, interoperability, and patient rights, laboratories may find themselves navigating new expectations for transparency, parental access, and compliance—while also reassessing their dependence on a highly consolidated health IT ecosystem.
The agency says shifting certain companion diagnostic tests from Class III to Class II could reduce regulatory burden, shorten review timelines, and encourage more manufacturers to enter the market.
The US Food and Drug Administration (FDA) has released a proposal that could significantly alter the regulatory pathway for oncology companion diagnostics, aiming to reduce barriers to market entry while maintaining assurances of safety and effectiveness.
In a notice published Nov. 25 in the Federal Register, the FDA said it plans to reclassify certain companion diagnostic assays from Class III medical devices to Class II devices. The proposal applies to specific nucleic acid–based in vitro diagnostic tests that are indicated for use with a corresponding FDA-approved oncology therapeutic product.
Under the current framework, Class III devices require premarket approval (PMA), the
FDA’s most rigorous and resource-intensive review process. Class II devices, by contrast, are typically cleared through the 510(k) premarket notification pathway, which is generally faster and less costly for manufacturers.
FDA Cites Maturing Technologies and Robust Safety Data to Support Reclassification
According to the agency, Class II devices are those for which “general controls by themselves are insufficient,” but for which “there is sufficient information to establish special controls to provide assurance of safety and effectiveness.” These special controls can include performance standards, postmarket surveillance, patient registries, and the development of guidelines and recommendations.
The proposed reclassification would cover in vitro diagnostic devices intended to detect specific genetic variants or other nucleic acid biomarkers in human clinical specimens. These tests rely on nucleic acid amplification technologies and/or sequencing technologies and are specifically tied to approved cancer therapies.
“Based upon the extensive [premarket approval] data available to FDA … published peer-reviewed literature studying the longstanding and well-understood technologies, and data available to the agency demonstrating a lack of significant postmarket safety signals with oncology therapeutic nucleic acid-based test systems, FDA believes there is sufficient information to reclassify these devices from Class III (premarket approval) into Class II (special controls),” the agency wrote.
The FDA emphasized that the proposal reflects both the maturity of the underlying technologies and the agency’s experience overseeing these products once they are on the market. Many companion diagnostics have been used clinically for years, generating substantial performance and safety data.
Reduced Regulatory Burden Could Accelerate Market Entry and Patient Access
If finalized, the change could have meaningful implications for diagnostic developers and patients alike. The FDA said the reclassification would “decrease regulatory burden on industry” by allowing manufacturers to pursue the “less burdensome” and “generally more cost-effective” 510(k) pathway rather than PMA.
“A 510(k) typically results in a shorter premarket review timeline compared to a PMA, which ultimately may provide more timely access of these types of devices to patients,” the agency said. “FDA expects that the reclassification of these devices would enable more manufacturers to develop these types of devices such that patients would benefit from increased access to appropriately safe and effective tests.”
The proposal comes as demand continues to grow for precision oncology tools that match patients with targeted therapies based on genetic and molecular profiles.
Companion diagnostics are often essential for determining whether a patient is eligible for a specific cancer drug, making regulatory timelines a critical factor in how quickly new therapies can reach the clinic.
The FDA stressed that the proposal does not eliminate oversight, but rather shifts it to a framework the agency believes is more proportionate to the risk profile of these tests. Special controls would still apply, and manufacturers would remain responsible for demonstrating that their devices are safe, effective, and substantially equivalent to legally marketed products.
The agency is seeking public input before finalizing the order. Comments on the proposal will be accepted through Jan. 26, 2026, giving stakeholders across the diagnostics, pharmaceutical, and healthcare sectors an opportunity to weigh in on how the change could affect innovation, competition, and patient care.
If adopted, the reclassification could mark one of the most consequential regulatory shifts for oncology companion diagnostics in years, potentially accelerating development timelines while expanding access to precision testing for cancer patients.
What the VA’s New Baylor Genetics Contract Means for Clinical Lab Leaders.
For clinical laboratory leaders tracking the growing role of precision medicine in federal healthcare systems, the US Department of Veterans Affairs (VA) has taken another significant step toward broad genomic integration.
Baylor Genetics announced it has been awarded a multi-year national contract to provide pharmacogenomic (PGx) testing and germline genetic testing—including hereditary cancer analysis—to veterans across the VA’s nationwide network.
The company did not disclose the value of the multi-year award. However, federal contract filings indicate that at least one delivery order for PGx testing issued to Baylor Genetics in September was valued at $11.4 million, according to GovTribe.com, which tracks federal contract data.
Targeted Testing to Personalize Care Across the VA
Under the agreement, Baylor Genetics will supply PGx testing designed to help VA clinicians understand how a patient’s genetic makeup may influence their response to medications, particularly those used for mental health conditions. By identifying gene variants that affect drug metabolism and effectiveness, PGx insights can help shorten the time to symptom relief, reduce adverse effects, and support more individualized treatment plans.
The contract also includes hereditary cancer testing to identify genetic risk, inform active surveillance strategies, and guide care decisions for both patients and potentially at-risk family members.
Kengo Takishima, chairman and CEO of Baylor Genetics, noted, “By providing high-quality genetic insights, we aim to empower VA providers with the tools they need to improve treatment outcomes and ensure that those who have served our country receive the best possible care.”
These testing services will be available to all veterans across the VA system.
For lab leaders, the agreement signals continued federal investment in genomic tools that can shape personalized care at scale and highlights the expanding opportunities for laboratories positioned to support large, integrated health networks with advanced testing capabilities.
