$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Center Clinical Laboratory,
Petitioner,
- v. -
Health Care Financing Administration.
DATE: February 15, 1996
Docket No. C-95-160
Decision No. CR411
DECISION ON REMAND
Background
The procedural history of this case is contained in my prior
decision, CR358 (1995), and in the decision of the appellate panel
of the Departmental Appeals Board, DAB 1526 (1995), which reversed
my decision and remanded the case to me for further proceedings.
In its decision, the appellate panel has set forth the
interpretations of the regulations that govern the outcome of this
case. The appellate panel concluded that I erred in setting aside
the sanctions imposed by the Health Care Financing Administration
(HCFA) on procedural grounds. The panel determined instead that
HCFA had acted properly in imposing all of the sanctions in
question. DAB 1526, at 11 - 20.
In accordance with the appellate panel's directives on remand, I
have evaluated the evidence concerning the sole factual issue
remaining in this case: whether Petitioner had any condition-level
deficiency as determined by the State surveyors and HCFA. As the
appellate panel stated in the last paragraph of its decision,
[I]f the ALJ determines that Petitioner did have any
condition-level deficiency as determined by the State surveyors and
HCFA,
. . . [t]he ALJ merely has to affirm the principal sanctions
being imposed by HCFA: suspension, revocation, and cancellation of
Medicare payments. The regulations provide, as HCFA here
clarified, that HCFA's decision to revoke [Petitioner's CLIA
Certificate] becomes effective after a hearing decision by the ALJ
upholding HCFA's decision is issued. [42 C.F.R.] Section
493.1844(d). Moreover, alternative sanctions, such as a directed
plan of correction, are no longer relevant since they are designed
to prevent the principal sanctions from going into effect and
therefore may themselves continue in effect only until a suspension
or revocation becomes effective. Section 493.1810(d)(2).
DAB 1526, at 24.
The appellate panel has determined that HCFA acted properly in
imposing all of the sanctions in issue (id. at 11 - 20), that an
affirmation of the principal sanctions imposed by HCFA depends
solely on the existence of condition-level deficiencies (id. at 24)
and the other sanctions also imposed by HCFA are no longer relevant
(id.). Accordingly, I have reviewed the record as a whole and now
make the following findings material to the issues on remand.
Findings of Fact and Conclusions of Law
1. During February and March of 1993, the New Jersey Department of
Health, acting as agent for HCFA, surveyed Petitioner under the
Clinical Laboratory Improvement Act (CLIA). HCFA Exhibits (Exs.)
1, 1b, 127, 128.
2. Between May 27 and June 1, 1993, HCFA imposed various sanctions
under CLIA pursuant to its determination post survey that
Petitioner's deficiencies posed "immediate jeopardy" to patient
health and safety. HCFA Exs. 127, 128; see 42 C.F.R. 493.2
(definition of "immediate jeopardy").
3. HCFA's determination of "immediate jeopardy" is not reviewable
in this forum. 42 C.F.R. 493.1844(c)(6).
4. The principal sanctions HCFA imposed are the suspension and
revocation of Petitioner's CLIA certification and the cancellation
of Petitioner's approval to receive Medicare payment. HCFA Exs.
127, 128; 42 C.F.R. 493.2, .1806(b), .1807(a).
5. A condition-level deficiency means noncompliance with one or
more requirements identified as "conditions" within subparts G
through Q of 42 C.F.R. Part 493. 42 C.F.R. 493.2.
6. HCFA proved that, during the time of the February - March 1993
survey, Petitioner had condition-level deficiencies under 42 C.F.R.
Part 493, Subpart H (re participation in proficiency testing).
Pages 4 - 6, herein.
7. HCFA proved that, during the time of the February - March 1993
survey, Petitioner had condition-level deficiencies under 42 C.F.R.
Part 493, Subpart J (re the management of patient tests). Pages 6
- 10, herein.
8. HCFA proved that, during the time of the February - March 1993
survey, Petitioner had condition-level deficiencies under 42 C.F.R.
Part 493, Subpart K (re quality control of tests). Pages 11 - 13,
herein.
9. HCFA proved that, during the time of the February - March 1993
survey, Petitioner had condition-level deficiencies under 42 C.F.R.
Part 493, Subpart P (re quality assurance). Pages 13 - 14, herein.
10. HCFA proved that, during the time of the February - March 1993
survey, Petitioner had condition-level deficiencies under 42 C.F.R.
Part 493, Subpart M, insofar as they pertain to the
responsibilities of laboratory directors and supervisors. Pages 13
- 14, herein.
11. HCFA properly imposed principal sanctions against Petitioner.
Findings 4 - 10; DAB 1526, at 24.
Discussion
By way of overview, I note that all of the condition-level
deficiencies alleged and proven by HCFA are inter-related by facts
or logic. See Tr. 347 - 48. I find persuasive HCFA's use of
Petitioner's records to prove HCFA's contention that Petitioner had
incurred condition-level deficiencies as a laboratory performing
tests of moderate or high complexity. 1/ Petitioner had made its
records available to the surveyors during the February - March 1993
survey, and the records randomly selected for review by the
surveyors reflected ongoing chaotic, inconsistent, inadequate, and
sometimes aberrant methods for performing proficiency tests and
patient tests, identifying patient test specimens and reporting
patient test results, and performing required quality control
procedures. In the absence of any substantive or credible rebuttal
by Petitioner, the nature and extent of such problems establish
that Petitioner had violated the conditions for performing
proficiency tests (Subpart H), management of patient tests (Subpart
J), and quality control (Subpart K).
Since there is no evidence that Petitioner had taken meaningful
steps to ascertain and correct the foregoing condition-level
deficiencies, it is reasonable to conclude also that Petitioner has
failed to meet the condition-level requirements for quality
assurance (Subpart P) and for Petitioner's laboratory director and
supervisor to perform their duties as specified by the regulations
(Subpart M). The quality assurance condition requires the
laboratory to ensure the quality of its own work through a
continuing self-monitoring process, and the condition pertaining to
laboratory directors and supervisors requires that these
individuals effectuate their responsibilities so that proficiency
testing, patient testing, quality control, and other requisite
procedures are implemented in accordance with CLIA requirements.
42 C.F.R. Part 493, Subparts M and P.
Therefore, the evidence supports the conclusion that if Petitioner
had complied with the conditions for quality assurance and for its
laboratory director and supervisor to perform their
responsibilities as required by the regulations, Petitioner should
not have incurred condition-level deficiencies for performing
proficiency tests, patient test management, or quality control.
I discuss below the condition-level deficiencies proven by HCFA on
the basis of evidence which I find to be credible and essentially
unrebutted by Petitioner.
A. Petitioner was not in compliance with the condition of
participation governing proficiency testing of samples.
Subpart H of the regulations sets forth the condition for the
performance of proficiency tests by laboratories performing tests
of moderate or high complexity. 42 C.F.R. Part 493, Subpart H.
Proficiency testing is a system used to check a laboratory's
ability to perform certain patient tests. Tr. 900. Four times
each year, a proficiency testing organization approved by HCFA
sends out a set of five proficiency testing samples of unknown
values to the laboratory for testing by that laboratory. Tr. 900
- 02. The regulations are specific in requiring that the
laboratory: 1) test its proficiency samples in the same manner as
it tests its patient specimens; 2) test its proficiency samples the
same number of times as it routinely tests patient samples; 3)
document the handling, preparation, processing, examination, and
each step in the testing and reporting of proficiency testing
samples; and 4) maintain, for a minimum of two years, the relevant
records (including the attestation statement documenting that the
proficiency testing samples were tested in the same manner as
patient specimens). 42 C.F.R. 493.801(b).
During the February - March 1993 survey, the surveyors analyzed
Petitioner's records concerning its performance of proficiency
chemistry tests in 1992. See, e.g., HCFA Ex. 1 at 33; HCFA Ex. 97;
Tr. 899 - 908. The surveyors concluded that Petitioner was not
performing its proficiency tests in the same manner and with the
same frequency that it was routinely performing its patient tests.
HCFA Ex. 1 at 33. For example, in 25 out of the 27 proficiency
chemistry tests reviewed by one surveyor, Petitioner had tested its
proficiency chemistry samples more than once, even though the
results from these samples were all within the normal range. Tr.
904 - 12. In contrast, Petitioner did not retest any patient
specimen that had attained a normal result, and Petitioner did not
consistently retest patient specimens that attained abnormal or odd
results. Id. In addition, by comparing the contents of the
proficiency test reports and the documents Petitioner generated in
preparation of those reports, the surveyors found instances where
Petitioner reported proficiency test results which, according to
Petitioner's work papers, Petitioner had not attained. Tr. 907 -
08.
There is no logical reason for repeatedly testing proficiency
samples having normal results, especially when Petitioner appears
to know this from its routine practice of not testing patient
specimens more than once after attaining a normal result. Tr. 906.
Nor can Petitioner's retesting of numerous proficiency samples
having normal results be reconciled with its practice of failing to
retest patient samples even when those patient samples have very
odd or abnormal results. These disparities in methodologies
violate Petitioner's obligation to conduct its proficiency tests in
the same manner and for the same number of times that it routinely
performs patient tests. See 42 C.F.R. 493.801(b) and (b)(2).
In addition, the conclusion that Petitioner violated the
recordkeeping requirements of 42 C.F.R. 493.801(b)(5) is shown
by the absence of correlation between some of the proficiency test
results reported by Petitioner and the documents supplied to the
surveyors for review.
Petitioner acknowledges that the regulation governing proficiency
testing requires the laboratory to process proficiency test samples
in the same manner as it does patient specimens. P. Br. at 14.
Nevertheless, Petitioner argues that it was in compliance, even
though it did not test patient samples and proficiency testing
samples the same number of times. Id. Petitioner argues that its
practice does not violate the regulation. Petitioner's argument is
plainly wrong, however, as 42 C.F.R. 493.801(b)(2) quite
specifically requires that proficiency samples be tested the same
number of times as patient specimens.
On the basis of the foregoing evidence and the absence of any
credible proof supporting a contrary conclusion, I find that
Petitioner violated the condition for performing proficiency tests
in the manner required by 42 C.F.R. 493.801.
B. Petitioner was not in compliance with the condition of
participation governing patient test management.
Subpart J of the regulations sets forth the condition for patient
test management in laboratories performing moderate or high
complexity tests. 42 C.F.R. Part 493, Subpart J. To satisfy this
condition, the laboratory must employ and maintain a system that
provides for, inter alia, the proper identification, preservation,
and processing of patient specimens, and the accurate reporting of
results. 42 C.F.R. 493.1101. It is incumbent upon the
laboratory to ensure the reliable identification of patient
specimens as they are processed and tested to assure that accurate
test results are reported. 42 C.F.R. 493.1101, .1107.
The laboratory also must send test reports promptly to the
authorized individual who requested the test. 42 C.F.R.
493.1109. This means, for example, that the laboratory should have
in place an adequate system for reporting patient test results in
a timely, accurate, reliable, and confidential manner. 42 C.F.R.
493.1109(a). The laboratory must make available to the authorized
person who requested the test the "reference" or "normal"
ranges
determined by the laboratory, and the laboratory must develop and
follow written procedures for immediately reporting any imminent
life-threatening results or "panic values" to the authorized
individual who requested the test. 42 C.F.R. 493.1109(d), (f).
The laboratory must also retain copies of test records and test
reports for specified periods of time after the results are sent
promptly to the authorized individual who requested the test. 42
C.F.R. 493.1107, .1109. For example, immunohematology test
records and reports must be maintained by the laboratory for at
least five years, and pathology test reports must be retained for
a minimum of 10 years after the date of reporting. Id.
The evidence in this case establishes that Petitioner did not
comply with the condition of participation for patient test
management, for three reasons. First, Petitioner's practices did
not assure the proper identification of patient specimens. Second,
Petitioner failed to maintain the records required by regulation.
Third, Petitioner did not insure that test results were promptly
reported to the individual that requested them.
1. Petitioner failed to insure that patient specimens were
properly identified.
During their review of Petitioner's records and practices, the
surveyors discovered that Petitioner's identification of culture
plates was inadequate. A surveyor testified that the markings on
the culture plates indicated only the date the culture was made and
the last three digits of the patient identification number. Tr.
503, 505 - 07. This identification was inadequate because, as
explained at the hearing, the lab must have a record system that
permits the tracking of a patient specimen from entry to final
report. Tr. 246 - 48. However, the surveyors found it impossible
at times to confirm that patient specimens had been identified
correctly because neither the patients' names nor their
identification numbers had been entered in Petitioner's work
records. HCFA Ex. 1 at 14. Instead, Petitioner entered in its
records only the last one or two digits of the patients'
identification number, which, in its entirety, should consist of
nine digits containing also the year, month, day, and sequence in
which Petitioner had logged in the physician's request for testing
the specimen. Id. Even though Petitioner routinely entered the
testing date and date of specimen collection in its work records,
such entries were not adequate for accurately identifying patients
from Petitioner's work records. Id. Because in several cases
specimens were collected or tested on days that differed from those
on which the doctors gave their orders or when Petitioner received
the specimens, it was not appropriate to construe the two dates
appearing in Petitioner's work records as the missing digits from
the patient identification numbers. Id.
The surveyors found also that Petitioner accepted some urine
specimens in unlabeled containers, which, even if the patient's
name had been written on the lid of the container, presented the
risk of having the contents of the container associated with the
wrong lid and wrong patient name. Tr. 339 - 43, 351 - 52.
Petitioner admitted that it does not keep all information on the
specimen containers, but it alleges that it maintains all the
necessary information on the request forms, which are logged in
with the specimen. P. Ex. 15 at 3. However, the request forms and
log information reviewed by the surveyors contradict Petitioner's
allegations. Petitioner's records reveal that Petitioner: 1)
failed to include in its accession number system the dates on which
specimens were collected; 2) assigned duplicate numbers to some
specimens; 3) failed to assign consecutive numbers to specimens
collected from one collection station; 4) omitted the names and
addresses of some physicians who requested tests; and 5) failed to
indicate which of two collection stations the specimens came from.
Tr. 249 - 89.
2. Petitioner failed to keep adequate records of its test
results.
In addition to its inadequate identification of patient specimens,
Petitioner also was not in substantial compliance with the
regulation's recordkeeping requirements under the patient test
management condition. For example, Petitioner's supervisors were
unable to produce any work records to support the parasitology
results it reported for 1992. Tr. 415 - 17; HCFA Ex. 1 at 12 - 13.
The regulations require such records to be kept for a minimum of
two years. 42 C.F.R. 493.1107. Moreover, even though Petitioner
produced its 1993 work records for parasitology, its recordkeeping
systems or techniques were so defective that the surveyor was not
able to track various specimens from their accession report to the
actual work records. Tr. 415 - 17. Another surveyor described
similar unsuccessful attempts to establish a correlation between
Petitioner's immunohematology reports and actual work records. Tr.
915 - 17. Petitioner is required to maintain immunohematology
records for a minimum of five years. 42 C.F.R. 493.1107,
.1109. During the February - March 1993 survey, the surveyor
randomly selected for review the records and reports for 10
patients tested during a three-month period during 1992. Tr. 915
- 17. She could not find the actual work records for five of the
these 10 patients. Id.
Even though Petitioner later submitted a "quality control book" (P.
Ex. 6), purporting to substantiate the performance of the tests for
all 10 patients, the surveyor noted several reasons for doubting
the truth of the information contained in the book. First, the
book was submitted only after Petitioner had received notice of the
deficiencies. Tr. 918. Moreover, the tests in issue were done
manually and not on machines. Tr. 926. Even if a quality control
test should have been run on these types of tests, a laboratory
should not do a quality control test on actual patient specimens,
because a quality control test involves working with samples of
known values, whereas actual patient specimens have unknown values.
Tr. 918 - 22, 926, 928. The surveyor noted also that the contents
of the "book" later produced by Petitioner is highly suspect in
that it coincides in all respects with the information the surveyor
examined in the laboratory, except that it also has information
pertaining to the other five patients (and only the five other
patients) in issue for the same time period. Tr. 918 - 22. The
surveyor's observations are well-reasoned and persuasive. By
contrast, the testimony introduced by Petitioner in defense of the
existence of the "book" and its contents appears contrived and
conveniently self-serving. See Tr. 937 - 42; P. Ex. 15 at p. 4.
3. Petitioner failed to report test results in a timely and
accurate manner.
I found persuasive also HCFA's conclusion that Petitioner failed to
meet the timely test reporting requirements of Subpart J. One
surveyor testified from the review of Petitioner's records that
some tests were completed within 48 hours, but Petitioner took four
days to report those results. Tr. 530 - 35. With respect to the
requirement for reporting "panic values" or results having
life-threatening implications, HCFA showed that Petitioner's
records do not contain notations of what action, if any, was taken
on the reporting of "panic values." Tr. 314. Even if Petitioner
had written policies in place for providing prompt notice of "panic
values" to doctors or other authorized individuals who requested
the tests, Petitioner's agents and employees did not appear to
follow any consistent procedures when they were obligated to report
life-threatening results. Tr. 311 - 12. The surveyors found also
many instances where Petitioner failed to report abnormal or
spurious tests and inaccurately reported patient results. Tr. 318
- 39; HCFA Ex. 1 at 32.
Through the testimony of at least one of its witnesses, HCFA
acknowledged the various possibilities that may have accounted for
the grossly abnormal patient test results reviewed during the
survey: a bad test system, bad specimens, or patients who were
truly very ill. Tr.
889 - 90, 893. However, as also discussed below, if the abnormal
results were due to a bad test system or bad specimens, Petitioner
took none of the remedial actions required by the regulations.
Similarly, if the abnormal test results accurately reflected the
serious illness of patients, Petitioner failed to contact the
doctors in the manner required by Subpart J. Tr. 890 - 91. In
fact, the records reviewed by the surveyors show that, in several
instances, abnormal results appear to have been deliberately
deleted from patient reports. Tr. 892 - 95.
HCFA's evidence shows also that Petitioner was reporting incorrect
and incomplete normal ranges, in contravention of the regulatory
requirement that pertinent "reference" or normal ranges, as
determined by the laboratory performing the tests, be made
available to those who order or will utilize the tests. 42 C.F.R.
493.1109(d); HCFA Ex. 1 at 20 - 23. At the hearing, one of HCFA's
witnesses testified that Petitioner reported incorrect normal
ranges for potassium in its chemistry test results. Tr. 876 - 78.
Petitioner's failure to report the normal range of tests correctly
or completely is seen also in its reporting of only the normal
ranges for males in certain tests where the normal ranges are
gender-dependent. HCFA Ex. 1 at 22. I agree with HCFA's
interpretation that the regulation, in requiring that the pertinent
normal or "reference" ranges be made available, means that the
correct ones be made available. See 42 C.F.R. 493.1109(d). 2/
Petitioner did not prove its assertions that it reported "accepted
medical ranges" and used a "medically accepted formula" in
calculating the patient test results. See P. Ex. 15 at 5.
For the foregoing reasons, I conclude that HCFA has proven that
Petitioner had condition-level deficiencies in the management of
patient tests.
C. Petitioner was out of compliance with the condition of
participation governing quality control for labs performing
moderate or high complexity tests.
Subpart K of the regulations contains the requirements that must be
satisfied by laboratories performing tests of moderate or high
complexity in order to meet the condition of quality control. 42
C.F.R. Part 493, Subpart K. Quality control refers to techniques
for measuring the accuracy of tests by performing the tests on
materials for which the correct values are known. Tr. 353 - 54.
Under the regulations, a laboratory must establish and follow
written quality control procedures for monitoring and evaluating
the quality of the analytical testing process of each method to
assure the accuracy and reliability of patient tests and results.
42 C.F.R. 493.1201(b). As especially relevant to this case, the
regulation is specific that the laboratory must perform and
document its control procedures using at least two levels of
control materials each day of testing. 42 C.F.R.
493.1202(c)(4). In addition, the laboratory must take remedial
actions when appropriate and document such remedial actions. 42
C.F.R. 493.1219, .1221.
In order to ascertain the validity of Petitioner's quality control
data, the surveyors chose to review the control records for
Petitioner's platelet testing system, automated complete blood
count (CBC) system, and chemistry profiling system. HCFA Ex. 1 at
24. At the very basic level, the surveyors found that many of
Petitioner's control results were illegible, and no control results
were recorded on some days. Tr. 366 - 68; HCFA Ex. 1 at 24. These
facts support the conclusion that Petitioner was not performing the
required control tests on each day of testing.
At the hearing, one of HCFA's witnesses detailed the various
problems found in the review of Petitioner's control data for
platelet testing system. Tr. 362 - 92. She explained the
significance of the information contained in control product
inserts provided by the manufacturer, which list the true or target
values for the control material of a particular batch within a
particular lot. Tr. 357 - 58, 368 - 72. Petitioner's control
records for platelet testing were aberrant in the following
respects: 1) the recurrence of a few specific values; 2) the
appearance of the same two Low Level control values in 12 out of 15
instances; 3) the recurrence of consecutive identical sets of
Normal Level and High Level control results within a short period
of time; and 4) the absence of corresponding changes in the High
Level control values reported by Petitioner when the lot number and
target levels of the platelet controls changed. HCFA Ex. 1 at 24
- 26; Tr. 372 - 92. Based on these and like problems in
Petitioner's control records, I agree with the surveyors'
conclusion that Petitioner's quality control system for platelet
testing was unsatisfactory. HCFA Ex. 1 at 24 - 26.
The surveyors concluded also that Petitioner's quality control of
its CBC test system was unsatisfactory because the accuracy of
Petitioner's control data in this area could not be verified, for
several reasons. HCFA Ex. 1 at 26. At the hearing, one of the
surveyors explained the workings of a Coulter Counter analyzer,
which performs the CBC tests for Petitioner and should
automatically print out dates and sequence numbers. Tr. 395 - 98.
However, the analyzer printouts provided by Petitioner did not have
the dates or proper sequence numbers, and Petitioner had discarded
the carbon copies of its original analyzer printouts. Tr. 398 -
401; HCFA Ex. 1 at 26. In addition, the information on the
originals was very difficult to read. Id. Without sequencing
numbers, there was no way for the surveyors to know when the
control data were generated: whether they were generated on
certain days and used for other days, or generated on each day of
patient testing as required by the regulations. Tr. 399 - 400.
Even though the surveyor could not be certain whether Petitioner
had falsified its CBC control data, she testified that laboratories
have been known to generate multiple copies of control results on
a day when their analyzer is operating properly, so that these
control results could be used on other days when their equipment is
not operating properly or when they do not care to run control
tests. Tr. 402 - 04. This testimony underscores the importance of
having verifiable control data in order to satisfy the condition
for quality control.
In the area of patient chemistry testing, the surveyors discovered
that Petitioner was calculating certain results incorrectly, and
was not investigating or correcting problems that produced spurious
test values. See HCFA Ex. 1 at 20 - 23. Petitioner was using the
wrong formula to calculate low density lipoprotein (LDL), which
caused the wrong results to be reported. HCFA Ex. 1 at 22 - 23;
Tr. 567 - 77. Petitioner could not identify a reference source for
the single normal LDL range it was reporting for both sexes.
Petitioner claimed to have been relying on the same range reported
by the previous laboratory owner for the LDL tests. HCFA Ex. 1 at
22; Tr. 565 - 68.
In addition, the surveyors found frequent instances of biased
results in the small sample of Petitioner's records randomly
selected for review. HCFA Ex. 1 at 21; Tr. 542 - 62. That is to
say, instead of finding patient values equally distributed around
the mean of the normal range for a particular test (i.e., 50
percent above and 50 percent below), the surveyors found higher
percentages of results at either above the mean to create a
positive bias, or at below the mean to create a negative bias.
Thus, due to such biases, Petitioner was obtaining an unusually
high percentage of abnormal values. HCFA Ex. 1 at 21.
Even though Petitioner's records provided repeated indications of
possible malfunctioning of its test systems or equipment (e.g., Tr.
389 - 92, 893), Petitioner undertook no remedial action as required
by the regulations. Instead, Petitioner likely deleted information
from its test reports by manually overriding certain machine
generated data that reflected the existence of its systemic or
equipment problems. Tr. 893 - 95.
This and like evidence of record prove that Petitioner failed to
satisfy the condition of quality control.
D. Petitioner's deficiencies in proficiency testing, patient test
management, and quality control demonstrate that Petitioner failed
also to comply with the conditions of participation governing
quality assurance and those governing laboratory directors and
supervisors.
Subpart P of the regulations contains the requirements for the
condition of quality assurance. 42 C.F.R. Part 493, Subpart P.
For quality assurance, the laboratory must have ongoing monitoring
and evaluation of its test management system and quality control
system. 42 C.F.R. 493.1703, .1705. For example, the
regulations require that the laboratory assess its quality control
system to determine whether its corrective actions have effectively
responded to the following: 1) problems identified during the
evaluation of calibration and control data for each test method; 2)
problems identified during the evaluation of patient test values
for the purpose of verifying the reference range of a test method;
and 3) errors detected in reported results. 42 C.F.R. 1705. In
addition, the laboratory must document all quality assurance
activities and make such records available to the Department of
Health and Human Services. 42 C.F.R. 493.1721.
Subpart M of the regulations contains the requirements for
laboratory directors and supervisors to perform certain specified
responsibilities. In a laboratory performing moderate and highly
complex tests, a laboratory director must provide overall
management and direction in accordance with the regulations, and
his responsibilities include ensuring that proficiency test samples
are tested as required under Subpart H, ensuring that quality
control and quality assurance programs are established and
maintained, and ensuring that all necessary remedial actions are
taken and documented. 42 C.F.R. 493.1403, 493.1407, 493.1445.
In a laboratory performing highly complex tests, there must be a
general supervisor whose responsibilities include being accessible
to testing personnel, providing day-to-day supervision of high
complexity testing, and ensuring that acceptable levels of analytic
performance are maintained. 42 C.F.R. 493.1459, 493.1463. In
addition, the general supervisor may be delegated the laboratory
director's responsibility for assuring that all remedial actions
are taken whenever test systems deviate from the laboratory's
established performance specifications and ensuring that patient
test results are not reported until all corrective actions have
been taken and the test system is properly functioning. 42 C.F.R.
493.1463(b)(1), (2).
The problems discussed in the earlier sections of this decision and
substantiated in the record support the conclusion that Petitioner
failed to comply with the conditions for quality assurance and that
its laboratory director and general supervisor failed to perform
their responsibilities in accordance with the regulations. Because
of Petitioner's deficiencies in the areas of proficiency testing,
patient test management, and quality control, Petitioner's
integrity depended upon its supervisor and director performing
their duties properly and undertaking meaningful quality assurance.
Only by complying with the regulatory requirements for quality
assurance and laboratory directors and supervisors found in
Subparts P and M could Petitioner have begun to eliminate on its
own the continuing systemic problems found by the surveyors.
However, whether it was Petitioner's noncompliance with Subparts P
and M that caused the condition-level deficiencies under Subparts
H, J, and K, or vice versa, the results were the same: Petitioner
did not conduct the required self-evaluation, was not ascertaining
its own mistakes and problems, and did not implement any of the
necessary remedial actions through its director or supervisor.
For these reasons, I conclude that Petitioner had failed to comply
with the conditions at 42 C.F.R. Part 493, Subparts P and M.
Conclusion
For the reasons discussed above, I find that Petitioner was out of
compliance with a number of Medicare Conditions of Participation.
I conclude, therefore, that HCFA was authorized to impose the
principal sanctions of revocation of Petitioner's CLIA certificate
and cancellation of Medicare payments to Petitioner.
________________________
Mimi Hwang Leahy
Administrative Law Judge
1. Petitioner has not disputed that the regulations governing
laboratories performing moderate or high complexity tests apply to
its operations.
2. The reporting of incorrect and incomplete normal ranges
shows also that Petitioner violated the conditions of quality
control and quality assurance, discussed below.