CASE | DECISION |JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Preferred Family Medicine,

Petitioner,

DATE: February 03, 2003
                                          
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Centers for Meidcare & Medicaid

 

Docket No.C-01-806
Decision No. CR999
DECISION
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DECISION

Preferred Family Medicine (PFM or Petitioner) (1) is a physician-based clinical laboratory located in Madison Heights, Michigan, which is certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. § 263a et seq. Petitioner appeals the decision of the Centers for Medicare & Medicaid Services (CMS) (2) to impose sanctions against it. The sanctions include revoking Petitioner's CLIA certificate for at least one year and cancelling its approval to receive Medicare payments. For the reasons discussed below, I sustain CMS's determinations.

I. Background

On April 10, 2000, the Michigan Department of Consumer & Industry Services (State Agency) conducted a complaint investigation survey and reported its findings to CMS. See CMS exhibit (Ex.) 4. Based on the survey results, in a letter dated May 29, 2001 (revised on June 22, 2001, to correct a typographical error, see Petitioner's Hearing Request; CMS Exs. 2, 3), CMS determined that improper referral, collaboration, and nonintegration occurred during specific 1998 and 1999 testing events, such that Petitioner was out of compliance with CLIA requirements. Specifically, CMS found that a comparison of proficiency testing (PT) results reported to Medical Laboratory Evaluation (MLE) (3) by Petitioner's laboratory and two other laboratories in Michigan indicated that the results reported by the three laboratories showed "strong evidence of improper referral, or collaboration, or both." (4) (5) CMS stated that the condition level requirement at 42 C.F.R. § 493.801(b)(3) was out of compliance because: routine integration of Petitioner's PT samples into its regular workload using its routine methods did not occur; Petitioner referred certain PT samples to another laboratory for analysis; and collaboration occurred in the administration of PT samples prior to the testing event reporting due date. CMS also stated that Petitioner's laboratory director did not fulfill his responsibility for assuring PT samples were tested as required, thus failing to fulfill his responsibility for the overall operation and administration of the laboratory, a condition level violation of 42 C.F.R. § 493.1441. CMS then stated it was imposing the principal sanctions of cancelling Petitioner's approval to receive Medicare payment for its services and was (absent a request for hearing on Petitioner's part) revoking Petitioner's CLIA certificate. CMS Exs. 2, 3. CMS later supplemented the list of statutory and regulatory citations upon which it relied in making its determination that Petitioner was out of compliance by including the condition level requirement at 42 C.F.R. § 493.801 and the standard at section 493.801(b)(4) and 42 U.S.C. § 263a(i)(4). CMS Ex. 11.

Petitioner requested a hearing. The case was assigned to me for hearing and decision. CMS submitted a motion for summary affirmance of the revocation of Petitioner's CLIA certificate and cancellation of its approval to receive Medicare payments (CMS Br.), accompanied by 23 exhibits. Petitioner submitted a motion in opposition (P. Br.), accompanied by four exhibits. CMS submitted a reply (CMS R. Br.). In the absence of objection, I admit CMS Exs. 1 - 23 into evidence. Also in the absence of objection, I admit Petitioner's exhibits (P. Exs.) 1 - 4 into evidence, even though they include duplicates of exhibits submitted by CMS.

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 the revocation of Petitioner's CLIA certificate and the cancellation of Petitioner's approval to receive Medicare payments.

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. Public Law No. 100-578, amending section 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a et seq.; see H.R. Rep. No. 899, 100th 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); 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, Inc., DAB No. 1820, at 3 (2002).

A laboratory that holds a CLIA certificate of accreditation is permitted to perform moderate and high complexity tests and must participate in the PT program outlined in 42 C.F.R. Part 493, Subpart H. Under its 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 moderate or 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).

A laboratory must treat and analyze PT samples in the same manner as patient samples. 42 C.F.R. § 493.801(b); 42 C.F.R. § 493.61(b)(1); 42 U.S.C. § 263a(d)(1)(E). 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. 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). 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. § 263a(i)(4).

CMS or its designee (such as the State agency here) conducts validation inspections to determine a laboratory's 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, DAB No. 1820, 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 state monitoring. 42 C.F.R. § 493.1806.

A laboratory is entitled to a hearing before an 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 conditions. The laboratory has the ultimate burden of rebutting, by a preponderance of the evidence, CMS's prima facie case. Preferred Family Clinic, DAB CR975, at 4; citing Emil S. Sitto, M.D., DAB CR935 (2002), 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 (GEV), slip op. at 25 (D.N.J. May 13, 1999).

The regulations state also that the purpose of CLIA enforcement is:

(1) To protect all individuals served by laboratories against substandard testing of specimens.

(2) To safeguard the general public against health and safety hazards that might result from laboratory activities.

(3) To motivate laboratories to comply with CLIA requirements so that they can provide accurate and reliable test results.

42 C.F.R. § 493.1804(a)(1) - (3).

IV. Discussion

I make findings of fact and conclusions of law (Findings) to support my decision. I set forth each finding, below, in bold and italics, as a separately numbered heading.

1. Summary disposition is appropriate where, as here, Petitioner has not demonstrated any dispute regarding genuine issues of material fact.

Summary disposition is appropriate where there are no disputed issues of material fact and where the only questions that must be decided involve either questions of law or the application of the law to the undisputed facts. A party opposing summary disposition must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R.Civ. P. 56(c); Preferred Family Clinic, DAB CR975, at 4. A party may not simply state that it disputes an allegation of fact in order to avoid the entry of summary disposition. Instead, it must describe the asserted facts credibly in order to establish a dispute.

CMS is requesting summary affirmance here as a matter of law because it asserts that no material facts are in dispute. Petitioner opposes summary affirmance, asserting that several issues need "to be resolved for, which a hearing is required." P. Br. at 14. Specifically, Petitioner states that the issues which need to be heard are: 1) whether a finding of physical transport is necessary to establish an intentional referral under the plain meaning of the CLIA statute and regulations; 2) whether CMS is engaging in an abuse of discretion by imposing the most severe sanction when the regulations require a weighing of factors and a range of sanctions; 3) whether Petitioner should be held responsible for the acts of a low-level employee where Petitioner had no knowledge or reason to know of the alleged prohibited conduct; 4) whether CMS has the authority to sanction Petitioner when, at the time of the complaint investigation survey, it was fully compliant with CLIA; and 5) whether CMS is estopped from sanctioning Petitioner as it had previously been sanctioned by CMS's "deeming authority." P. Br. at 14 - 15.

I find that no issues of material fact exist in this case. Petitioner's arguments, instead, raise disputed issues of law or how the law effects undisputed material facts. Thus, no hearing is necessary and I am deciding the case based on the record before me

2. Petitioner admits that its laboratory technician averaged the results of PT tests with two other laboratories and submitted them to MLE, which constitutes an intentional referral of a PT sample to another laboratory and is a violation of 42 C.F.R. § 493.801(b)(4) and of the condition at 42 C.F.R. § 493.801.

Petitioner admits numerous times in the record before me, including in the sworn affidavits of its laboratory director, Jason Talbert, M.D., its principal partner, Marc F. Weisman, D.O., its attorney, Robert S. Iwrey, Esq., and its laboratory technician, Marilyn Nichols, that Ms. Nichols averaged Petitioner's PT test results with two other laboratories where she also worked (6) and reported those results to MLE. CMS Ex. 7, at 4 - 5; CMS Ex. 8, at 1; CMS Ex. 9, at 1; CMS Ex. 10, at 1; CMS Ex. 18, at 1 - 2; P. Ex. 1; P. Br. at 4 - 5. Petitioner asserts, however, that Drs. Talbert and Weisman were unaware at the time that Ms. Nichols was averaging test results, and that Ms. Nichols in fact tested all the PT samples on site and did not send the samples to an outside laboratory. P. Br. at 4 - 5. Petitioner argues from this that Ms. Nichols' conduct does not rise to the level of an intentional referral of a PT sample (a violation of 42 C.F.R. § 493.801(b)(4) mandating a one-year revocation of Petitioner's CLIA certificate pursuant to 42 U.S.C. § 263a(i)(4)), but is only an inter-laboratory communication (a violation of 42 C.F.R. § 493.801(b)(3), where revocation is permissible, but is not mandatory). Petitioner argues specifically that "if the regulations and the statute intended intentional referral to mean the same thing as inter-laboratory communications there would be no reason to purposely distinguish them and provide a mandatory sanction for one and not the other." P. Br. at 2. Petitioner acknowledges, however, that Departmental Appeals Board (DAB or Board) precedent is against its interpretation. P. Br. at 3.

I find that in this case the averaging by Petitioner's employee of three laboratories' PT test results and the reporting of those results to MLE constitutes an intentional referral of a PT sample under 42 C.F.R. § 493.801(b)(4). There is no doubt that in averaging the test results Ms. Nichols actions were intentional. Further, the Board has held that 42 C.F.R. § 493.801(b)(4) is not limited to cases where a physical transfer is established. The Board stated that:

The ALJ in Southfield focused on the wording of the provision at 42 C.F.R. § 493.801(b)(4), concluding that the wording indicates a physical transfer of the PT sample. We agree that the use of the word "send" in the first sentence of that section indicates a physical transfer. Contrary to what the ALJ in Southfield stated, however, that sentence is not presented as a definition of "intentional referral" but can be read as a separate prohibition. The second sentence of that section states: "Any laboratory that HCFA determines intentionally referred its . . . [PT] samples to another laboratory for analysis will have its certification revoked for at least one year." HCFA could reasonably read this sentence as applying to constructive referral as well as actual physical transfer, particularly in circumstances where the facts render physical transfer unnecessary for the outside analysis to take place. As noted by the ALJ in Blanding . . . , the dictionary definition of "refer" includes "to direct the attention or thoughts of," and "to direct to a person, place, etc., for information or anything required." Id. at 21 citing Random House College Dictionary, revised ed. 1980, at 1108.

* * *

When the regulations are considered as a whole, reading section 493.801(b)(4) to encompass a constructive referral such as what occurred here is a better reading. Limiting the concept of a referral to a physical transfer is inconsistent with the underlying purposes of the condition for certification. Adopting the values achieved in another laboratory (either with or without having done the tests in one's own laboratory) clearly undercuts the general concept that the PT sample be tested in the same way as regular patient specimens in the laboratory are tested so that the results truly measure the proficiency of the laboratory reporting the PT result.

Stanley Boykansky, M.D., DAB No. 1756, at 15 - 16 (2000), citing Oakland Medical Group, P.C., DAB No. 1755, at 21 - 22 (2000); see Mark Gary Hertzberg, M.D., P.C., DAB No. 1805 (2001). Petitioner has provided no evidence or argument (P. Br. at 1 - 5) which would cause me to re-visit the Board's interpretation. In this case, Petitioner's admitted averaging of Petitioner's PT test results with those of two other laboratories (and as the Board acknowledged it is irrelevant whether the PT tests were done in a petitioner's own laboratory) undercuts the general concept that a PT sample be tested in the same way as regular patient specimens are tested, because as a consequence of such averaging the PT results do not measure the proficiency of the laboratory reporting the PT results. (7) Circumventing the requirement defeats the purpose of the CLIA requirements, which is to ensure the accuracy and reliability of laboratory tests and thus the health and safety of those tested. I find Petitioner's violation of the standard at 42 C.F.R. § 493.801(b)(4), given the potentially serious consequences attendant to allowing facilities to circumvent the PT process, to be enough in itself to constitute a violation of the condition at 42 C.F.R. § 493.801. See Stanley Boykansky, M.D., DAB No. 1756, at 16.

I note Petitioner's argument that it should not be held responsible for Ms. Nichols' conduct because she was a "low level" employee (8) and because Drs. Talbert and Weisman did not know at the time that she was averaging the PT test results because Dr. Talbert had instructed her to comply with COLA and CLIA regulations. P. Br. at 8 - 10. I accept for the purposes of this decision that Drs. Talbert and Weisman were unaware that Ms. Nichols was averaging test results. Petitioner notes COLA's position (where COLA reinstated Petitioner), acknowledging the Restatement of Agency 2d (1958) § 217C, that in a punitive damages situation (here applied, however, in the context of a revocation of accreditation) the act of an agent (here Ms. Nichols) should only be imputed to a principal (here Drs. Talbert and Weisman and PFM) if the principal authorized the act, was reckless in employing the employee in a managerial capacity, or ratified the act. However, this is not the view of the Board or of ALJs at the Board, either with regard to Petitioner's responsibility for the actions of Ms. Nichols or of Petitioner's arguments regarding the principles of agency to avoid responsibility for Ms. Nichols conduct. See Stanley Boykansky, M.D., DAB No. 1756, at 19 - 20; Melvin C. Murphy, M.D., DAB CR590, at 7 (1999) (The statute and applicable regulations which implement CLIA make the laboratory responsible for the actions of its employees where the employee has intentionally referred its proficiency testing samples to another laboratory for analysis); Melvin Murphy, M.D., DAB CR590, at 7 (Contrary to Petitioner's arguments, the issue of Petitioner's responsibility under CLIA is not resolved by principles of State agency law. Petitioner has responsibility under CLIA to comply with all CLIA requirements. Petitioner bears that responsibility regardless whether it . . . authorizes or is aware of conduct by its employees.); and 8 (Petitioner had a statutory duty to assure that proficiency tests were being performed onsite and not elsewhere. It had an additional duty to maintain test records onsite . . . Petitioner may not evade its responsibility to comply with the requirements of CLIA on the ground that [its owner] delegated responsibility to operate the laboratory . . . and then assert that [its owner] was unaware of [its laboratory director's] actions.). Cf. Sentinel Medical Laboratories, Inc., DAB No. 1762, at 12 - 14 (2001).

I note also that Drs. Weisman and Talbert both state in their affidavits that they realized the importance of implementing real changes in the manner in which their laboratory was run after receiving notice of the pending denial of COLA accreditation in September 1999 (CMS Ex. 8, at 3; CMS Ex. 9, at 3) and that Dr. Talbert stated that ". . . as part of my on-going efforts, I have taken on a more involved role in the day-to-day operations of the laboratory and have insisted upon strict compliance with COLA and CLIA regulations as well as PFM's Quality Assurance Plan." P. Ex. 8, at 3 - 4. Had Drs. Talbert and/or Weisman been more involved previously, it is possible that Ms. Nichols might not have subverted the PT process. Their acknowledgment that they could have done more does not mitigate against the sanction imposed by CMS.

3. Petitioner's CLIA certificate must be revoked for at least one year, and the other remedy imposed by CMS, cancellation of Petitioner's approval to receive Medicare payment for its laboratory services, is reasonable.

Where a laboratory intentionally refers its PT samples to another laboratory, the regulations require that its CLIA certificate be revoked for at least one year. 42 C.F.R. § 493.801(b)(4); 42 U.S.C. § 263a(i)(4). As I have found that Petitioner here intentionally referred its PT samples to another laboratory by averaging its PT test results with two other laboratories, I am required to uphold CMS's revocation of its CLIA certificate for one year. However, I also find the revocation and the cancellation of Petitioner's approval to receive Medicare payment to be eminently reasonable in this case given the gravity of Petitioner's offense and how the circumvention of PT testing can affect the purpose of CLIA. See Edison Medical Laboratories, Inc., DAB No. 1713, at 12 (1999).

Petitioner argues that CMS is engaging in an abuse of discretion by imposing the most severe sanction, revocation, against it where the regulations require a weighing of factors and a range of sanctions under 42 C.F.R. § 1804(d), which lists a series of factors CMS is to consider in making a determination regarding which sanction to impose against a laboratory. I do not agree with Petitioner. Where there is an intentional referral, as here, CMS must revoke a laboratory's CLIA certificate. Moreover, even if I had found that only an inter-laboratory communication had occurred here, it does not follow that CMS was obliged to impose a sanction other than revocation of Petitioner's CLIA certificate. It is within CMS's discretion to make the determination as to which sanction to impose. See Edison Medical Laboratories, Inc., DAB No. 1713, at 20. Further, section 1804(d) gives CMS wide latitude in determining what factors should be considered when determining what sanction to impose ("(d) Choice of sanction: Factors considered. CMS bases its choice of sanction or sanctions on consideration of one or more factors that include, but are not limited to, the following . . . ").

4. The other legal arguments raised by Petitioner are unavailing to mitigate the sanctions imposed.

I have dealt with some of Petitioner's arguments above, specifically determining that: 1) a finding of physical transport is not necessary to establish an intentional referral under the plain meaning of the CLIA statute and regulations; 2) CMS did not engage in an abuse of discretion by revoking Petitioner's CLIA certificate; and 3) Petitioner is liable for the actions of Ms. Nichols whether or not its laboratory director or principal partner had knowledge of the prohibited conduct at the time. However, Petitioner argues also that CMS should not have sanctioned Petitioner when, at the time of the complaint investigation survey, it was fully compliant with CLIA. Petitioner also argues that CMS should be estopped from sanctioning Petitioner as it was previously sanctioned by CMS's "deeming authority," COLA.

Petitioner's arguments essentially amount to an assertion that it is unfair (citing the doctrine of laches) to sanction it for conduct that occurred in 1998 and 1999, which it corrected, and which did not result in the loss of its COLA accreditation. P. Br. at 10 - 12. Petitioner notes that under a definition of the doctrine of laches (one definition of which Petitioner cited as "neglect, for an unreasonable and unexplained length of time under circumstances permitting diligence, to do what in law should have been done, which neglect results in disadvantage to another. P. Br. at 11, n.1) I should find in its favor here. However, even if the doctrine of laches was applicable to federal government action, Petitioner's definition does not even apply in this case to justify the relief requested.

I do not find CMS's conduct in this case to be unfair. I agree with CMS, and with the district court denying Petitioner's motion for a temporary injunction referred to above, that any perceived delay on CMS's part in sanctioning Petitioner was not unreasonable or unexplained. Any such delay appears to have been caused by COLA's failure to notify CMS of its accreditation activities (especially troublesome given that CMS was already investigating two other laboratories employing Ms. Nichols which also had PT deficiencies). CMS. Ex. 22, at 4 - 5. Moreover, the district court recognized that the law allows CMS to ignore COLA's finding and corrective action plan and to impose stiffer sanctions for the same conduct addressed by COLA. (9) Id. at 5. Moreover, in a supplemental opinion, the same court stated that "[s]ince this Court finds as a matter of fact that COLA is not an administrative arm of CMS and has no authority over CMS, COLA's findings are immaterial to CMS' present complaint investigation." CMS Ex. 23, at 4 (a decision consisting of the case titled Preferred Family Medicine, P.C., v. Thompson, No. 01-72447, slip op. at 3 (E.D. Mich. Aug. 28, 2001), in which the court concluded that Petitioner's due process rights were not infringed by CMS's alleged contravention of "administrative res judicata" due to COLA's having already conducted an investigation, instituted discipline, and assisted in implementing a corrective action plan).

CMS is not bound by COLA's findings, as 42 C.F.R. § 493.563(a)(i) authorizes CMS to:

. . . conduct an inspection of an accredited laboratory that has been issued a certificate of accreditation on a representative sample basis or in response to asubstantial allegation of noncompliance.

An accredited laboratory is subject to validation inspections. CMS is not bound to ignore noncompliance by a laboratory just because the laboratory is accredited. 42 C.F.R. §§ 493.563, 493.569(a).

Further, neither the State Agency or CMS made a finding that after the survey in April 2001 (which here covered only PT testing requirements, not all CLIA requirements) Petitioner was in compliance with CLIA requirements. Accreditation and CLIA certification are not the same. An accredited laboratory may be deemed to meet CLIA requirements, but such status ends when CMS determines, based on a validation or complaint survey, that a laboratory is not in substantial compliance.

Finally, neither Congress or the Secretary has placed a time limit on CMS's exercise of its enforcement authority under CLIA. Imposing such a time limit could undermine CMS's ability to carry out the enforcement purposes of CLIA; to protect individuals against substandard testing of specimens, to safeguard the public against health and safety hazards, and to motivate laboratories to comply with CLIA requirements to provide accurate and reliable test results.

V. Conclusion

As I have found that Petitioner intentionally referred PT samples to another laboratory for analysis, I must uphold CMS's one-year revocation of Petitioner's CLIA certificate, and I also uphold CMS's suspension of Medicare payments for Petitioner's laboratory services.

 

JUDGE
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Richard J. Smith
Administrative Law Judge

FOOTNOTES
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1. This case was initially captioned "Jason Talbot, DO, Preferred Family Medicine," as that is how the May 29, 2001 notice letter attached to Petitioner's hearing request was addressed. However, there is no Jason Talbot, DO. Instead, at all relevant times, Jason Talbert, M.D. has been the laboratory director of PFM (see CMS exhibit 8). I am re-captioning the case simply "Preferred Family Medicine," as Dr. Talbert has not requested a hearing separate from PFM.

2. The Health Care Financing Administration (HCFA) has been renamed the Centers for Medicare & Medicaid Services (CMS). In this decision I refer to CMS only, and any reference to CMS shall apply to both names.

3. Petitioner performed tests requiring it to participate in an approved PT program to evaluate test performance. MLE provides such a program.

4. In the case of Preferred Family Clinic, DAB CR975 (2002), the Administrative Law Judge (ALJ) found that the petitioner had knowingly compared the results of PT tests with two other laboratories, one of which is the Petitioner here (and the PT tests and testing events involved are those upon which Petitioner has been sanctioned in this case). The ALJ also upheld CMS's remedy determinations, which included the revocation of the petitioner's CLIA certificate and the cancellation of the petitioner's approval to receive Medicare payments. Although I make my findings in this case separate from the ALJ's decision in Preferred Family Clinic and based on the evidence adduced and argument presented in this case, I do refer below to the ALJ decision in Preferred Family Clinic.

5. After an earlier survey of Petitioner's facility by COLA (formerly the Commission on Office Laboratory Accreditation), Petitioner's accrediting organization, COLA recommended denying Petitioner accreditation as a result of COLA's finding that Petitioner had knowingly compared the results of PT tests or submitted PT tests to another laboratory prior to the PT program end-date for receipt of results (as well as deliberate disregard for COLA standards and policies and failure to adhere to COLA-imposed required improvements). CMS Ex. 14. COLA reconsidered its decision following Petitioner's implementation of a plan of correction. CMS Ex. 19. However, COLA did not notify CMS in September, 1999, regarding its initial decision to deny accreditation to Petitioner, despite its duty to do so. COLA's failure to notify the State Agency or CMS of its decision to deny Petitioner accreditation caused a delay both in the State Agency's survey of Petitioner and in the ability of CMS to decide whether to impose sanctions against Petitioner. See CMS Ex. 22, at 4 (an exhibit consisting of a decision in the case titled Preferred Family Medicine, P.C. v. Thompson, No. 01-72447, Medicare and Medicaid Guide (CCH) 300,799 (E.D. Mich. July 31, 2001), at 802,789 (a decision denying Petitioner's motion for a temporary restraining order to bar CMS's cancellation of Medicare payments to Petitioner)).

6. Preferred Family Clinic and Oakland Family Practice. See Preferred Family Clinic, DAB CR975, at 8 - 9.

7. Because Petitioner has admitted that Ms. Nichols averaged PT test results with two other laboratories, and because I find such averaging constitutes a deficiency requiring a one-year revocation of Petitioner's CLIA certificate, I need not investigate whether or not CMS has otherwise made a prima facie case for the other deficiencies alleged in CMS's notice letter, including deciding whether the requirements for laboratory director at 42 C.F.R. § 493.1441 were met. However, if I were to specifically address the other deficiencies identified by the State Agency, and adopted by CMS, I would uphold them.

8. In the COLA survey of Petitioner's facility, Ms. Nichols is described as a "Gen. Sup." or general supervisor, which appears to be a responsible and not a "low level" position. CMS Ex. 15, at 5. However, regardless of Ms. Nichols' precise title, she was responsible for the PT testing program at Petitioner's facility and I agree with CMS that it is troubling that Petitioner seeks to minimize her status here.

9. The court noted that it was troubled by the fact that the law allows COLA to make determinations concerning violations, communicate with a laboratory, work out a plan of correction, and then have CMS come in later and vitiate the plan. The court recognized, however, that CMS had the right to ignore COLA's findings and corrective plan and to impose stiffer sanctions for the same conduct for however long a time it desired. CMS Ex. 22, at 5. Given the very important purposes of the CLIA requirements, and the need for vigilance on the part of laboratories, laboratory directors, and owners to ensure compliance with the requirements, I am less troubled. The final responsibility for compliance with CLIA (and hence for the health and safety of those being tested) lies not with an accrediting organization but with CMS.

 

CASE | DECISION | JUDGE | FOOTNOTES