White Lake Family Medicine, P.C., (Petitioner) is a Michigan-based, physician-owned clinical laboratory certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. § 263a et seq. In this action, Petitioner appeals a determination by the Centers for Medicare & Medicaid Services (CMS) to impose sanctions against it. Those sanctions include canceling Petitioner's approval to receive Medicare payment for its services, and revoking its CLIA certificate. This matter now comes before me on CMS's request for summary judgment. For the reasons discussed below, I grant summary judgment in CMS's favor and thereby sustain CMS's determination.

I. Background

Petitioner is a physician office laboratory (POL) located in White Lake, Michigan. Petitioner's laboratory director is David Leszkowitz, D.O. During the first half of 2000, Petitioner performed routine chemistry and endocrinology testing and participated in proficiency testing (PT) conducted by the American Association of Bioanalysts (AAB). In 2001, the AAB reported to the Michigan Department of Consumer and Industry Services (MDCIS) that, in March and June 2002, Petitioner submitted PT results in various areas of testing that were nearly identical to those submitted by another Detroit area POL operated by Tisa K. Gabriel, D.O. (TKG). CMS Ex. 1. The AAB grading reports showed that in March 2000 Petitioner submitted PT results on five samples in each of five areas, for a total of 25 values, results that were precisely identical to those submitted by TKG for every sample. CMS Ex. 2. The AAB grading reports further showed that in June 2000 Petitioner submitted PT results in three samples that were identical to those submitted by TKG. CMS Ex. 3. The PT submissions for both Petitioner and TKG were signed by the same analyst, Nicholas M. Dippold. CMS Exs. 4, 5.

On March 20, 2001, a MDCIS surveyor conducted an onsite inspection of Petitioner. CMS Ex. 7. The surveyor examined laboratory logs maintained by Petitioner for March 10 and June 12, 2000, the dates on which Petitioner certified it performed the PT. The results reported in the logs did not match the PT reports Petitioner submitted to AAB. The surveyor concluded that Petitioner was out of compliance with two CLIA conditions, proficiency testing and laboratory director. CMS Ex. 10. Regarding the former, the surveyor cited the discrepancies between the PT results Petitioner recorded in its log books and sent to AAB, and further cited the identical PT results both Petitioner and TKG submitted to AAB. Id. at 2 - 6. As to the latter deficiency, the surveyor found no evidence that Petitioner's laboratory director had ever reviewed the PT results or instituted procedures for monitoring the competence of testing personnel. Id. at 8 - 9.

CMS, by letter dated September 12, 2001, informed Petitioner that it was not in compliance with CLIA requirements because improper referral, collaboration, and non-integration occurred during specific 2000 testing events. Specifically, the letter stated that the laboratory was out of compliance with: 42 C.F.R. §§ 493.801 (enrollment and testing of samples); 493.1441 (laboratory director); and 493.801(b)(1), (3), and (5) (proficiency testing). The letter also cited statutory and regulatory "Requirements for Certificate," 42 U.S.C. § 263a(d)(1)(E), 42 C.F.R. § 493.61(b)(1), and 42 C.F.R. § 493.801(b)(1), (2), and (3), under which a laboratory agrees to treat PT samples in the same manner as materials derived from patients and referred to it for laboratory examinations or other procedures in the ordinary course of business. The letter advised that because of Petitioner's failure to meet CLIA conditions, and because of its referral of PT samples to another laboratory for analysis, CMS would suspend Petitioner's CLIA certificate, effective September 24, 2000, cancel its approval to receive Medicare payments for its services, and revoke its CLIA certificate for at least one year. CMS Ex. 19.

Petitioner timely requested a hearing, and the case was assigned to me. CMS has moved for summary disposition, which Petitioner opposes. CMS has filed 12 exhibits, marked as CMS Exs. 1 - 12. Petitioner submitted a Response to CMS's Motion for Summary Judgment (P. Br.). CMS filed a reply brief. In the absence of objection, I admit CMS Exs. 1 - 12.

II. Issue

The issue in this case is whether Petitioner failed to comply with one or more CLIA conditions of participation, thereby giving CMS the authority to impose remedies, including canceling Petitioner's approval to receive Medicare payments and revoking Petitioner's CLIA certificate.

III. Statutory and Regulatory Background

In order to ensure the accuracy and reliability of laboratory tests, and thus the health and safety of those tested, CLIA creates a federal certification process for laboratories that perform clinical diagnostic tests on human specimens. Pub. L. No. 100-578, amending § 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a et seq.; see H.R. Rep. No. 899, 100^th Cong., 2d Sess. 8 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3829. To be certified, a laboratory must meet the conditions of certification set out in the statute and regulations. 42 U.S.C. § 263a(f)(1)(E); 42 C.F.R. § 493.1 et seq. The statute gives the Secretary of Health and Human Services (Secretary) broad enforcement authority, including the authority to suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more conditions. Each condition represents a major division of laboratory services or required environmental protections. Standards are specific components of the conditions. RNA Laboratories, DAB No. 1820, at 3 (2002).

Laboratories holding CLIA certificates must participate in the PT program outlined in 42 C.F.R. Part 493, Subpart H. Under these provisions, each laboratory must enroll in an approved PT program that meets specific criteria set out at Subpart I of Part 493. 42 C.F.R. § 493.801. A laboratory performing high complexity testing "must successfully participate" in an approved PT program for each "specialty, subspecialty, and analyte or test in which it is certified under CLIA." 42 C.F.R. § 493.803(a).

CMS approves certain organizations, such as AAB, to administer proficiency tests under CLIA. 42 C.F.R. §§ 493.931 and 933, respectively, require that these approved proficiency-testing services send out, three times each year at approximately equal intervals, proficiency test samples to be analyzed by each laboratory for routine chemistry and endocrinology. A minimum set of five samples are sent for each testing event. The participating laboratories then perform the tests and submit their results on forms provided by the testing services. The testing services grade the results and report them to CMS. To determine the accuracy of a laboratory's response for qualitative and quantitative chemistry tests or analytes, the testing service must compare the laboratory's response for each analyte with the response that reflects agreement of either 90 percent of 10 or more reference laboratories, or 90 percent or more of all participating laboratories.

A laboratory must analyze PT samples in the same manner as patient samples. 42 C.F.R. § 493.801(b). The PT samples must be integrated with the laboratory's regular patient workload, and the tests must be performed by the same personnel who routinely do the testing using the laboratory's routine testing method. 42 C.F.R. § 493.801(b)(1). The integration of PT samples must be attested to by the laboratory director and the individual who performs the testing. Id. PT samples must be tested the same number of times as routine patient samples. 42 C.F.R. § 493.801(b)(2). Records documenting each step taken in the testing of PT samples are required. 42 C.F.R. § 493.801(b)(5).

A laboratory may not engage in inter-laboratory communications pertaining to PT results until after the due date by which a laboratory must report its results to the PT program. 42 C.F.R. § 493.801(b)(3). It must not refer PT samples, or portions of PT samples, to another laboratory for any analysis that it is certified to perform in its own laboratory. 42 C.F.R. § 493.801(b)(4); 42 U.S.C. § 263(a)(i). If a laboratory intentionally refers PT samples to another laboratory for analysis, its CLIA certificate must be revoked for at least one year. 42 C.F.R. § 493.801(b)(4); 42 U.S.C. § 263(a)(i)(4).

Additionally, a participating laboratory is required to have a director who provides overall management and direction in accordance with 42 C.F.R. §§ 493.801, 493.1441, and 493.1445. The laboratory director must attest to the routine integration of testing samples into the patient workload using the laboratory's routine methods. 42 C.F.R. § 493.801(b)(1). The laboratory director is responsible for ensuring that all PT samples are tested properly in accordance with the regulation and that all PT reports are reviewed by appropriate staff and to identify any problems that need corrective action. 42 C.F.R. § 493.1445(e)(4)(i) and (iii).

CMS, or its designee (such as the State Agency), conducts validation inspections to determine compliance with CLIA requirements. 42 C.F.R. § 493.1780(a). A laboratory's failure to comply with even a single condition in an area of testing offered by that laboratory may be grounds for suspension or revocation of its CLIA certificate. RNA Laboratories at 3; Ward General Practice Clinic, DAB No. 1624, at 2 (1997). CMS may suspend, limit, or revoke the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions, and may also impose alternative sanctions such as a directed plan of correction or monitoring by the State. 42 C.F.R. § 493.1806.

A laboratory is entitled to a hearing before an administrative law judge (ALJ) to contest the imposition of CLIA remedies. The CLIA regulations incorporate by reference the hearing procedures and the request for review provisions in 42 C.F.R. Part 498, Subparts D and E. 42 C.F.R. § 493.1844(a)(2) and (3). CMS has the burden of coming forward with sufficient evidence to prove a prima facie case that the laboratory is not complying with one or more CLIA condition. The laboratory has the ultimate burden of rebutting, by a preponderance of the evidence, any prima facie case of noncompliance that is established by CMS. Edison Medical Laboratories, Inc., DAB No. 1713 (1999); Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. HHS, No. 98-3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999).

IV. Discussion

Garden City Medical Center is readily distinguishable from the facts of this proceeding, as that case involved CMS's reliance on affidavits to assert its case. What CMS has done here is to offer the raw data on which its based its conclusions that Petitioner was not in compliance with CLIA requirements. In response, Petitioner has offered no declarations or affidavits by its staff disputing the accuracy of the documents offered by CMS as exhibits. In fact, Petitioner has offered no evidence or documents at all in support of its position. Nor has Petitioner offered arguments as to how CMS's exhibits might be inaccurate in what they on their face purport to demonstrate. See Oakland Medical Group, P.C., DAB No. 1755, at 9 (2000) (Summary judgment deemed appropriate where Petitioner did not supply documents or affidavits to support its defense). Indeed, Petitioner does not specifically challenge any of the factual underpinnings of CMS's case, only how those facts are to be interpreted. As discussed below, Petitioner's specific argument that CMS failed to make a prima facie case that Petitioner was not in compliance with CLIA requirements, in that CMS failed to introduce evidence showing an intentional referral of a PT sample, relies on an erroneous reading of the regulations. As to Petitioner's position that the PT reporting forms were ambiguous, I note that the reporting form document speaks for itself in what it requires by way of attestation.

Under these circumstances, summary judgment is appropriate.

As noted above, clinical laboratories must enroll in PT programs that meet defined criteria. 42 C.F.R. § 493.801. Each participating laboratory must test its samples independently, as if they were patient specimens, and must report the results of its test to an approved testing service. Here it is uncontested that Petitioner in March 2000 sent PT results that were identical to those submitted by TKG in all five sample areas and in June 2000 sent results identical to those submitted by TKG in three sample areas. It is further undisputed that the same individual, Nicholas M. Dippold, was employed by both Petitioner and TKG, and was the person who submitted the PT results for both laboratories to AAB.

Petitioner here argues, however, that there is no evidence that Petitioner intentionally referred the PT samples to another laboratory. Petitioner argues that the specific section of CLIA applicable to this case, 42 U.S.C. § 263a(i)(4), relates to the prohibition against a laboratory intentionally referring PT samples to another laboratory. Petitioner further contends that the implementing regulations at 42 C.F.R. §§ 493.801(b)(4) and 493.1840(b) repeat the admonition that a laboratory cannot send PT samples to another laboratory for analysis. Petitioner asserts that there is no evidence whatsoever here that Petitioner referred or sent its PT samples to another laboratory for analysis. Petitioner cites to numerous ALJ decisions for the proposition that an actual referral of PT samples to another laboratory is required before CMS can impose sanctions on a laboratory under CLIA.

Petitioner's reading of the regulations and prior decisions is misguided. The actual physical conveyance of PT samples from one laboratory to another is not required to trigger the prohibition expressed in 42 C.F.R. § 493.801(b)(4), as identical results in PT results can alone establish that improper communication had occurred. In Emil S. Sitto, M.D., DAB CR935 (2002), ALJ C.C. Hughes recognized, on the basis of expert testimony, that "the likelihood of two laboratories arriving at the same value for a proficiency test result is very low because of the variable involved in the testing processes," adding, "In fact, even if one person twice performed the same test on the same sample in the same laboratory with the same equipment, the test results would not be duplicated. Sitto at 6 (emphasis in original).

In RNA Laboratories, Inc., and Ter-Zakarian Medical Clinic, DAB CR829 (2001), ALJ S.T. Kessel characterized as "powerful circumstantial proof that Petitioners engaged in prohibited communications," evidence that for one testing event, the petitioner and another laboratory reported identical results for the nine analytes in five samples provided by AAB. RNA Laboratories at 6. In affirming ALJ Kessel's decision, an appellate panel of the Departmental Appeals Board (Board) agreed with Judge Kessel's finding that "the logical inference to be drawn from the evidence [of identical results] was that Petitioners had collaborated in obtaining or reporting the results." RNA Laboratories, Inc., and Ter-Zakarian Medical Clinic, DAB No. 1820, at 8 (2002 ). Here the evidence of prohibited collusion between Petitioner and TKG is even more striking: in this case two testing events were involved, with all the results for 25 samples being identical in the first event (CMS Ex. 2), and 17 of 25 samples being identical in the second event (CMS Ex. 3).

Under these circumstances, it is not necessary for CMS to produce direct proof that the samples were actually carried, sent, or communicated to another laboratory. The identical values "detected" in the PT results will support a finding of referral. Mark Gary Hertzberg, DAB No. 1805 (2001); Stanley Boykansky, M.D., DAB No. 1756 (2000); and Oakland Medical Group, DAB No. 1755 (2000). In Oakland, the Board found that referral could be established by circumstantial evidence, with the weight of the evidence demonstrating "that the PT results [the petitioner laboratory] reported were not the result of its own testing, but were obtained from another laboratory's testing." Oakland at 17.

Petitioner's reliance on Southfield Medical Clinic, DAB CR667 (2000), for the proposition that an actual referral of PT samples to another laboratory is required for the prohibition stated in section 493.801(b)(4) to occur, is unavailing. The Board in Oakland specifically rejected the ALJ's analysis of the referral regulation in Southfield "as requiring the actual physical transfer of the sample from one laboratory to another be established through direct evidence." Oakland at 17. The Board concluded:

Id. at 18.

Thus, I find that Petitioner's PT results, identical to those of another laboratory, are sufficient in themselves to establish CMS's prima facie case of noncompliance. When Petitioner then had the burden of rebutting by a preponderance of the evidence that prima facie case, it presented no evidence.

Moreover, even more damning to Petitioner's cause is the evidence from its own laboratory log books. CMS Exs 8, 9. The log books reveal discrepancies between the results Petitioner achieved from the PT performed on-site and the results reported to AAB:

Thus, only three of the 50 sampling results (the 6/12/200 FT4/1, FT4/4, and HDL/5) reported to AAB were replicated in Petitioner's own log books. These facts are established by Petitioner's records themselves and are not contradicted by Petitioner in any way. Petitioner has offered no explanation why it reported results to AAB that were different from the PT results records in its own logs.

I therefore find that these discrepancies are also legally sufficient to establish the "communications" and "referral" violations prohibited by 42 C.F.R. § 493.801(b)(3) and (b)(4).

Petitioner denies that its laboratory director, Dr. Leszkowitz, failed to fulfill his responsibilities for the operation and administration of the laboratory, arguing that he was never given the opportunity, after the discovery of the problems at the laboratory, to make a corrective action plan pursuant to 42 C.F.R. § 493.1441(e)(4)(iv). Petitioner further asserts that Dr. Leszkowitz had no knowledge of what it termed "Mr. Dippold's seditious activities." P. Br. at 24. Petitioner maintains that Dr. Leszkowitz was not even aware that Dippold also worked for TKG, let alone that Dippold was using the results he achieved at TKG's laboratory as the results he reported on Petitioner's forms to AAB. Petitioner denies that Dr. Leszkowitz can be held responsible for the failure to sign the reports of the PT results, given what it considered to be an ambiguity on the PT reporting forms supplied by AAB, forms approved by CMS. According to Petitioner, these forms (CMS Ex. 4) call for the signature of either the technical consultant or the laboratory director. Petitioner argues that the signature of Dippold as its technical consultant on the forms somehow relieved Dr. Leszkowitz of any responsibility for signing the forms. Petitioner concludes that this deficiency contained within the AAB PT reporting forms raises a question of fact as to any signature requirements and Petitioner's compliance with those requirements.

As discussed above, 42 C.F.R. § 493.1441 requires that a laboratory have a qualified laboratory director who provides management and direction in accordance with 42 C.F.R. § 493.1445. Section 493.1445 sets out the director's specific responsibilities, which encompass the overall operation and administration of the laboratory, including the employment of personnel who are competent to perform test procedures and report test results promptly, accurately, and proficiently, and for assuring compliance with regulations. As part of his specific responsibilities, the director must ensure that the laboratory is enrolled in an approved PT program, and that the testing samples are tested as required, and he must attest to the propriety of the PT. 42 C.F.R. §§ 493.801(b)(5), 493.1445(e)(4). The qualifications for a qualified laboratory supervisor who provides technical supervision are set forth at 42 C.F.R. § 493.1449. The laboratory supervisor is also responsible for the laboratory's participation in an approved PT program. 42 C.F.R. § 493.1451(b)(3).

In light of these regulations and unambiguous Board language, it is beyond serious argument that Dr. Leszkowitz failed to meet his responsibilities as Petitioner's laboratory director. While the regulations require a laboratory director to supervise the PT procedures and results, it is readily apparent that those responsibilities devolved on Dippold through Dr. Leszkowitz's indifference or design. Dr. Leszkowitz's signature does not appear on any of the 12 PT results submitted in March and June 2000. CMS Exs. 4, 5. Dr. Leszkowitz's purported lack of knowledge of Dippold's employment with TKG provides no excuse when confronted by the explicitness of the regulations. Petitioner has not even asserted that Dr. Leszkowitz ever compared the PT results recorded in the laboratory's log books with the results sent to AAB. Even a cursory review would have disclosed the obvious discrepancies between the PT entries in the log books and the PT results sent to AAB. Petitioner's assertion that Dippold was some sort of "renegade" (P. Br. at 5) or "rogue laboratory technician" (P. Br. at 7) is tantamount to an admission that Petitioner and its laboratory director failed abjectly to do what it and he were obliged by law to do: Dr. Leszkowitz failed to exercise the supervision of Dippold that was required by the regulations. The Board's decision in Stanley Boykansky, M.D., supra, is a dispositive treatment of this argument, and it leaves no doubt that the facts here support the citation.

Moreover, Petitioner's arguments about the alleged ambiguity in the AAB attestation forms are simply not persuasive. Dippold signed these forms in two capacities, one as the analyst performing the testing procedure, then also as the technical supervisor overseeing the testing procedure. The purpose of the regulations promulgated under the authority of CLIA was to ensure the integrity of laboratory results. PT is the method employed by the regulations to achieve that integrity. It is highly questionable whether the regulations were designed so that the same person could perform the tests and then attest that he or she performed the tests properly and reported the results accurately. Additionally, there is nothing in the record before me to show that Dippold possessed the educational and professional credentials required by 42 C.F.R. § 493.1449 to qualify as a laboratory supervisor and thus attest to the accuracy of the PT results. (See CMS Ex. 11). Thus, Dr. Leszkowitz further failed in his responsibility as Petitioner's laboratory director, under 42 C.F.R. § 493.1445, to employ an individual who had the required credentials to perform the PT.

Petitioner offers many other arguments why CMS's determination to revoke its CLIA certification should be overturned. Petitioner asserts that, as a physician office laboratory, its proposed CLIA revocation would result in the sacrifice of patient care, as it would no longer be permitted to perform the simple "waived" tests that are necessary for the routine day-to-day functioning of a medical practice. Petitioner decries what it characterizes as the "Draconian and unfair" (P. Br. at 6) nature of CMS's action in revoking its CLIA license, under the circumstances presented here. Petitioner contends that Congress, in enacting CLIA, intended to give more flexibility in the imposition of sanctions, eliminating the choice between the revocation of a license or the imposition of no sanction at all. Petitioner argues that CMS has here misapplied the congressional intent behind CLIA, by preventing Petitioner from providing necessary laboratory services to patients for at least two years with no regard to patient health care considerations. Petitioner maintains that under the interpretation of CLIA advanced by CMS a physician owner of a laboratory is at the mercy of a laboratory technician who is dishonest. Petitioner further asserts that it is a victim of a CMS flawed PT system which does not mandate a "scrambled testing" method that would be more difficult to manipulate.

The common thread of all these arguments regarding the propriety and fairness of CMS's proposed remedies is that they raise issues that are beyond my jurisdiction to address. I do not have the authority to hear and decide equitable arguments such as those advanced by Petitioner. New Millennium CMHC, Inc., DAB CR672 (2000). My authority in cases involving CMS is limited to hearing and deciding those issues which the Secretary of this Department has delegated authority to me to hear and decide, as set forth in 42 C.F.R. §§ 498.3 and 498.5. The regulations authorize me only to hear and decide cases involving specified initial determinations by CMS. I have no authority to fashion extraordinary relief. Oberry Community Mental Health Center, DAB CR986 (2002). Nor do I have the authority to address whether the regulations promulgated by this Department to implement CLIA conform with intent of Congress in enacting CLIA. This is not the proper forum to raise these issues.

V. Conclusion

For the reasons discussed above, I sustain CMS's determination to cancel Petitioner's approval to receive Medicare payment for its services and to revoke its CLIA certificate for at least one year.

Richard J. Smith

Administrative Law Judge