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Theranos reaches $4.65 million settlement with Arizona Attorney General office

Theranos has also reached agreement with Centers for Medicare and Medicaid Services over the revocation of their operating certificates.

Beth Jones Sanborn, Managing Editor

Embattled blood-testing giant Theranos has reached a $4.65 million settlement with the Arizona Attorney General's office that includes full refunds for every Arizona resident who purchased a Theranos blood test between 2013 and 2016, the company and the Arizona AG announced Tuesday.

The refunds are regardless of whether Theranos was paid for the tests, or whether the test results were voided or corrected. Between 2013 and 2016, Theranos sold approximately 1.5 million blood tests to more than 175,000 Arizona residents, the AG's office said.

[Also: Theranos faces lawsuit from former investor Partner Fund Management]

The state had alleged that the company's advertisements misrepresented the "method, accuracy, and reliability" of its blood tests. It also said the company was not in compliance with federal regulations enshrined in the Clinical Laboratory Improvement Amendments.

Theranos said in a statement that "including all consumers who had tests over that time period demonstrated the company's commitment to resolving the issue amicably on behalf of Arizonans and working collaboratively with state officials."

[Also: Theranos shuts down labs, wellness centers, lays off more than 300 workers]

The settlement did not include any actual admission of liability, however Theranos confirmed it will not own or operate a CLIA-licensed laboratory in Arizona for two years, effective March 28, 2017. They will also pay the AG's office $200,000 in civil penalties and $25,000 in attorneys' fees and other legal costs.

The company has also reached an agreement with the Centers for Medicare & Medicaid Services whereby CMS' revocation of the company's CLIA operating certificates will be withdrawn and its civil monetary penalty against the Theranos will be cut down to $30,000.

[Also: Theranos appeals sanctions imposed by Centers for Medicare and Medicaid Services]

Their agreement also stipulates that Theranos will not own or operate a clinical laboratory within the next two years, which is consistent with the business plans the company professed last fall.

Twitter: @BethJSanborn

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