After investigations revealed major problems at its blood-testing lab in California, the high-profile medical startup Theranos is in deep water with the Centers for Medicare and Medicaid Services (CMS). As Ars has reported before, the company faces sanctions, including losing its approval to test human samples.

But, according to a Wednesday report in The Wall Street Journal, the sanctions may also include banning Theranos' CEO and founder, Elizabeth Holmes, and its president, Sunny Balwani, from owning or running any lab for at least two years. The potential ban was mentioned in a letter dated March 18 from the CMS to Theranos. The letter has not been publicly disclosed, but WSJ reporters viewed it.

According to those reporters’ sources, Theranos had 10 days to respond, which it did. The CMS is now looking over its response. If the agency is still displeased with Theranos’ performance, the revocation of its approval to test blood samples and the ban could go into effect within 60 days. Theranos could still appeal the decision, the WSJ noted, but appeals rarely succeed. Between 2001 and the end of 2010, the CMS did not lose a single such case.

The dire situation is likely to have sparked the company's move last week to appoint several respected medical experts to its advisory panel. Theranos said that the experts will help with “advising Theranos regarding the full integration of its technology into routine clinical practice, and publication and presentation in scientific journals and at scientific meetings… The members who are laboratory directors in their own institutions will work with the company to help inspect its clinical laboratories, and help the clinical laboratory directors with the implementation of best in class lab procedures and processes.”

Theranos—once valued at $9 billion for promising revolutionary devices that could perform a wide variety of medical tests with just a few drops of blood—has been dogged in recent months with questions on the accuracy and reliability of its tests, as well as the conduct of its workers. A recent federal inspection report found that the company’s blood tests failed quality controls nearly 30 percent of the time, and the company failed to fix the problems and inform doctors of incorrect test results.

At the time, Theranos spokesperson Brooke Buchanan responded, writing: “We’ve made mistakes in the past in the Newark, CA lab, but when the company was made aware of the deficiencies, we have dedicated every resource to remedy those failures.”