$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Primary Care Medical Group,
Petitioner,
v.
Health Care Financing Administration.
DATE: October 9, 1996
Docket No. C-95-161
Decision No. CR439
DECISION
I conclude that Petitioner, Primary Care Medical Group (a physician's office
operating a laboratory), is
subject to revocation of its CLIA 1/ certificate for a one-year minimum mandatory
period, and to
concomitant cancellation of Medicare 2/ payments for laboratory services.
In reaching this conclusion, I determine that the word "intentionally"
is defined differently in CLIA for
civil violations than for criminal violations.
PROCEDURAL BACKGROUND
Only civil violations are alleged in this case. By letters dated April 21,
1995 and May 23, 1995, the Health
Care Financing Administration (HCFA) of the United States Department of Health
and Human Services
(DHHS) notified Petitioner that it was revoking Petitioner's CLIA certificate
for one year and cancelling
Petitioner's approval to receive Medicare payments for its laboratory services
for one year. (In addition,
Medicaid payments were no longer going to be available to the laboratory for
the same period of time).
By letter dated July 19, 1995, Petitioner filed a request for hearing. On October
25, 1995, I held a hearing
in San Francisco, California. Subsequently, the parties filed briefs. 3/ Based
on the evidence and the law,
in light of the parties' arguments, I affirm HCFA's determination to revoke
Petitioner's CLIA certificate for
a one-year minimum mandatory period, with concomitant cancellation of Petitioner's
Medicare payments
for laboratory services.
ISSUES
There are two issues: 1) whether Petitioner intentionally referred its proficiency
testing samples to another
laboratory for analysis; and 2) whether Petitioner was otherwise deficient in
meeting CLIA requirements.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a physician's office operating a laboratory, located in Madera, California.
2. Theodore Johnstone, M.D., is Petitioner's owner and laboratory director. Tr. 337; P. R. Br. 4.
3. Petitioner's laboratory did testing in the following areas: general chemistry
(i.e., glucose, blood urea,
nitrogen, creatinine, total protein, cholesterol); isoenzymes; hematology (complete
blood counts and
platelet counts); and microbiology (gonorrhea screening only). Tr. 22, 255.
4. The results obtained from Petitioner's laboratory tests were used in the
treatment of Dr. Johnstone's
patients.
5. A laboratory receives proficiency testing samples three times a year. Each
testing is known as an
"event," with the first "event" occurring in January. Tr.
52, 118-119.
6. Petitioner's laboratory is enrolled in an approved proficiency testing program,
pursuant to 42 C.F.R.
493.801, conducted by the American Association of Bioanalysts (AAB).
7. Among the proficiency testing samples sent to Petitioner were hematology
samples and chemistry
enzyme samples.
8. Petitioner's hematology proficiency testing from the third testing event
(i.e., 3rd quarter) of 1994 is at
issue in this case. Tr. 119.
9. Petitioner's chemistry proficiency testing from the second testing event
(i.e., 2nd quarter) of 1994 is also
at issue in this case. Tr. 119.
10. David Dohi is a licensed medical technologist, who in September 1994 was
working part-time at
Petitioner [one day a week for two to three hours a day], full-time at the Madera
Community Hospital
(community hospital), and part-time at the hospital in Chowchilla [on call every
other weekend and on call
Wednesday nights]. HCFA Ex. 4; Tr. 262-263.
11. Mr. Dohi's duties for Petitioner's laboratory included drawing blood, doing
laboratory testing and
reporting the results. HCFA Ex. 5; Tr. 262.
12. Mr. Dohi did the testing of Petitioner's laboratory's 3rd quarter 1994
hematology proficiency testing
samples. Tr. 232-233.
13. Mr. Dohi did not do the testing of Petitioner's laboratory's chemistry
proficiency testing samples from
2nd quarter 1994. Tr. 245.
14. With respect to the instruments to be used by Petitioner's laboratory on
the proficiency test samples,
Petitioner had indicated to the AAB that it would be using the hemacytometer
for platelet counts, and the
Cell-Dyn 400 for the other hematology tests. Tr. 274-275.
15. At the time relevant to these proceedings, Dorothy Maurer was employed
by HCFA as a CLIA
Laboratory Expert. She has a background as a medical technologist. Tr. 17, 21.
16. On February 28, 1995, Ms. Maurer conducted a survey of Petitioner's laboratory
on behalf of HCFA
for the purpose of determining whether Petitioner was in compliance with requirements
imposed under
CLIA (Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. 263a), and
the implementing
regulations at 42 C.F.R. Part 493.
17. Pursuant to the survey, Ms. Maurer found three condition level deficiencies:
(1) enrollment and
testing of samples -- 42 C.F.R. 493.801; (2) patient test management -- 42 C.F.R.
493.1101; and (3)
laboratory director -- 42 C.F.R.
493.1441.
18. Ms. Maurer testified that she found computer generated printouts from a
Cell-Dyn 1600 among the 3rd
quarter 1994 proficiency testing documentation in Petitioner's files. Tr. 37-40.
These printouts, each of
which is titled "Cell-Dyn 1600 Specimen Data Report," contained various
hematologic values, including
platelet counts. HCFA Ex. 2 at 2-7.
19. The computer generated printouts from the Cell-Dyn 1600 are evidence that
Petitioner's hematology
proficiency samples were analyzed on a Cell-Dyn 1600.
20. Petitioner does not have a Cell-Dyn 1600. It has a Cell-Dyn 400, which
does not have the ability to
count platelets nor can it generate computer printouts.
21. Mr. Dohi admitted that he had run tests on Petitioner's laboratory's 3rd
quarter 1994 hematology
proficiency testing samples on both the Cell-Dyn 400 at Petitioner's laboratory
and the Cell-Dyn 1600 at
the community hospital laboratory. Tr. 234, 239, 269-271, 287-288; HCFA Exs.
4, 5.
22. Mr. Dohi knew he was retesting Petitioner's laboratory's 3rd quarter 1994
hematology proficiency
testing samples on the Cell-Dyn 1600 at the community hospital laboratory. Thus,
Mr. Dohi's action was
deliberate, not inadvertent.
23. Mr. Dohi stated that the reason he took Petitioner's laboratory's hematology
proficiency testing
samples to the community hospital laboratory and analyzed the samples on its
Cell-Dyn 1600 was that he
wished to verify the results he had obtained using Petitioner's Cell-Dyn 400
[he wanted to check and make
sure his numbers were fairly accurate or within the ...ballpark]. HCFA Ex. 5,
Tr. 239.
24. Mr. Dohi reported the platelet count results obtained from the Cell-Dyn
1600 printouts to the AAB for
3rd quarter 1994. Tr. 47, 286-287.
25. At Petitioner, platelet counts for patients are not done on a Cell-Dyn 1600.
26. Even though Petitioner reported platelet count values obtained from a Cell-Dyn
1600, Petitioner did
not indicate on the AAB reporting form, as it was required to do, that it had
used different equipment than
what it had indicated it would use. Tr. 275.
27. Mr. Dohi testified that, at Petitioner, he used the hemacytometer to do
the platelet counts. Tr. 238,
241, 244-245, 287.
28. Use of a hemacytometer is an appropriate and acceptable way to perform a platelet count. Tr. 115.
29. Mr. Dohi stated that he could not find the worksheet where he had written
the platelet values that he
had obtained using the hemacytometer. Tr. 286.
30. With the exception of the platelet count values, Petitioner submitted to
the AAB the values obtained
from using Petitioner's Cell-Dyn 400 for the hematology samples. Tr. 235.
31. A laboratory that obtains analysis of its proficiency testing samples from
another laboratory, regardless
of whether the laboratory reports to the proficiency testing agency its own
results or the results obtained
from the other laboratory, violates 42 U.S.C. 263a(i)(4), 42 C.F.R. 493.801(b)(4)
and 493.1840(b).
32. By retesting its proficiency testing samples in the community hospital
laboratory, irrespective of
whether Petitioner reported the community hospital laboratory results, Petitioner
violated 42 U.S.C.
263a(i)(4), 42 C.F.R. 493.801(b)(4) and 493.1840(b).
33. A laboratory must not send proficiency testing samples or portions of samples
to another laboratory for
any analysis which it is certified to perform in its own laboratory. 42 C.F.R.
493.801(b)(4).
34. Because neither Congress nor the Secretary has defined "intentionally"
as used in the context of 42
U.S.C. 263a(i)(4), 42 C.F.R. 493.801(b)(4) and 493.1840(b), one can infer that
the term is to be given
its common and ordinary meaning.
35. The definition of "intention" is a determination to act in a
certain way. Long, at 6 (citing Webster's
New Collegiate Dictionary, 1975 ed., at 601). When one acts "intentionally",
he or she acts deliberately.
Long, at 6.
36. "Intentionally referred" [as in "intentionally referred"
its proficiency testing samples to another
laboratory for analysis] requires not specific intent, but general intent, that
is, an intent to act. No guilty
knowledge, no culpability, no scienter is required. Motive is irrelevant. It
is necessary merely that a
person act deliberately, that is, not inadvertently.
37. The fact that Mr. Dohi committed the act of referring Petitioner's proficiency
testing samples to
another laboratory for analysis, with the knowledge that the samples were proficiency
testing samples, is
sufficient evidence to show that Petitioner violated 42 U.S.C. 263a(i)(4), 42
C.F.R. 493.801(b)(4) and
493.1840(b). Long, at 6.
38. It is irrelevant that Mr. Dohi was unaware that
his retesting of Petitioner's 3rd quarter 1994 hematology proficiency testing
samples in the community
hospital laboratory was prohibited by law.
39. Mr. Dohi's motive in referring Petitioner's proficiency testing samples
to another laboratory for
analysis is irrelevant under 42 U.S.C. 263a(i)(4), 42 C.F.R. 493.801(b)(4) and
493.1840(b).
40. To prove "intention" in the context of 42 U.S.C. 263a(i)(4),
42 C.F.R. 493.801(b)(4) and
493.1840(b), HCFA is not required to prove what Mr. Dohi was thinking when he
took the proficiency
samples to another laboratory and ran the tests there.
41. Petitioner intentionally referred its 3rd quarter 1994 hematology proficiency
testing samples to another
laboratory for analysis, in violation of 42 U.S.C. 263a(i)(4), 42 C.F.R. 493.801(b)(4)
and 493.1840(b).
42. As laboratory director, Dr. Johnstone was responsible for the actions of
Mr. Dohi in intentionally
referring proficiency testing samples to another laboratory for analysis, and
the fact that Dr. Johnstone had
no knowledge of Mr. Dohi's intentional referral of proficiency testing samples
to another laboratory for
analysis is irrelevant.
43. Petitioner did not test its 3rd quarter 1994 hematology proficiency testing
samples in the same manner
as patient samples were tested.
44. Petitioner did not test its 2nd quarter 1994 chemistry proficiency testing
samples in the same manner
as patient samples were tested.
45. Petitioner did not test its 3rd quarter 1994 hematology proficiency testing
samples using its routine
methods.
46. With respect to the chemistry isoenzyme test samples, Ms. Maurer testified
that they were run twice,
evidenced by a worksheet on which was reported two results for each test. Tr.
43-46. There should have
been only one set of answers.
47. Based on the evidence pertaining to the hematology proficiency testing [finding
21] and the chemistry
proficiency testing [finding 46], Petitioner did not test its proficiency testing
samples the same number of
times that it tested patient samples. Tr. 54; HCFA Ex. 1 at 4-5.
48. Petitioner failed to document the date it ran the tests on the proficiency
testing samples, when it
received the samples, and that the tests were done there (at Petitioner's laboratory).
Tr. 55, 59-60; HCFA
Ex. 1 at 6.
49. Petitioner failed to maintain specimen logs with respect to the proficiency
testing in chemistry and
hematology. Tr. 55, 60.
50. Petitioner failed to identify the technologist performing the proficiency
testing. HCFA Ex. 1 at 6; Tr.
55.
51. Petitioner failed to maintain copies of all proficiency testing records
for 1994. HCFA Ex. 1 at 7.
52. Relevant proficiency testing documentation, including copies of the attestation
statements for the
hematology samples for the third event and the chemistry samples for the second
event, were missing at the
time of the survey of Petitioner. Tr. 40-41, 52-53.
53. Mr. Dohi did not dispute that some proficiency test documentation was missing
at the time of the
survey. Tr. 238.
54. Mr. Dohi stated that he could not find the worksheet where he had written
the results obtained from the
Cell-Dyn 400. He admitted he had no proof that he had run the samples on the
Cell-Dyn 400. Tr. 271; see
also Finding 29.
55. Petitioner's documentation for the second event 1994 for chemistry proficiency
testing was incomplete.
Ms. Maurer was unable to locate the printout with the chemistry results and
could not document that the
tests had been performed. Tr. 57, 80, 102.
56. Moreover, Ms. Maurer could locate only one set of answers on a printout,
even though there were two
sets of results on the worksheet. [All printouts are required to be kept.] Tr.
44, 57. Mr. Dohi was unable
to find the documentation showing the other set of numbers. Tr. 123.
57. Dr. Johnstone and Mr. Dohi signed the attestation form accompanying the
proficiency testing samples,
and, by doing so, were attesting that the proficiency samples were tested in
the same manner as patient
samples. Tr. 204; HCFA Ex. 2 at 2.
58. Petitioner failed to meet the Condition for Enrollment and Testing of Samples,
in violation of 42
C.F.R. 493.801.
59. The procedure manual maintained by Petitioner was inadequate, old, and outdated. Tr. 61, 84.
60. With respect to patient specimens, Petitioner did not have in place written
policies and procedures to
assure positive identification and adequate tracking of the specimens. Tr. 65-66;
HCFA Ex. 1 at 9.
61. For all types of laboratory testing performed in a day, quality control
should be conducted on that day
for those tests. Tr. 67, 72.
62. Quality control in the area of hematology is performed for every eight hours of operation. Tr. 67.
63. Petitioner failed to perform quality control daily in hematology. Tr. 68;
HCFA Ex. 8. Petitioner failed
to perform and document two levels of hematology quality control materials each
day of testing. HCFA
Ex. 1 at 10.
64. Specifically, Petitioner failed to run hematology quality control on four
of 18 days in February 1995,
when patients were tested. HCFA Ex. 8 at 1; HCFA Ex. 1 at 10. Petitioner performed
quality control only
78 percent of the time in February 1995. Tr. 80.
65. Petitioner conducted gonorrhea screenings. Tr. 61-62, 255.
66. Petitioner did not have in place a tracking system for sending gonorrhea
cultures to other labs. Tr. 64-
65; HCFA Ex. 1 at 9.
67. Petitioner's procedure manual did not contain written procedures for gonorrhea testing. Tr. 75.
68. The temperature chart on Petitioner's incubator, an instrument used in
gonorrhea screenings, indicated
that the last time the temperature was documented (checked) was in November
1992. Tr. 63, 76; HCFA
Ex. 1 at 11.
69. Mr. Dohi admitted that the incubator was used for gonorrhea incubations
and that results were reported
on the gonorrhea cultures. Tr. 278.
70. Mr. Dohi admitted that he was unaware that the incubator thermometer was
broken until the survey.
Tr. 278.
71. Petitioner replaced the broken thermometer in March 1995. Tr. 259, 277; P. Ex. 5 at 48.
72. Mr. Dohi could not recall if he ever saw a positive culture. Tr. 278-279.
73. At the time of the survey, Petitioner did not have any culture media records
with respect to gonorrhea
screening. Tr. 77; HCFA Ex. 1 at 12.
74. Petitioner failed to meet the Condition for Patient Test Management set forth at 42 C.F.R. 493.1101.
75. As laboratory director, Dr. Johnstone was responsible for the overall management
and direction of
Petitioner in accordance with 42 C.F.R. 493.1445. 42 C.F.R. 493.1441.
76. Dr. Johnstone failed to ensure that Petitioner's laboratory's testing system
in hematology provided
quality testing, as evidenced by the records showing that quality control was
performed only 78 percent of
the required time in February 1995.
77. Dr. Johnstone failed to ensure that Petitioner's laboratory's proficiency
testing samples were tested as
required under subpart H of 42 C.F.R. Part 493. See Finding 58. This failure
is evidenced by the
following: proficiency tests on the hematology testing samples were run at two
sites with two different
instruments, there were two sets of answers for the chemistry isoenzymes proficiency
testing samples, and
documentation containing chemistry results, as well as other documentation,
was not available. Tr. 80; see
HCFA Ex. 1 at 14.
78. Dr. Johnstone had the ultimate responsibility for ensuring that Petitioner's
laboratory's proficiency
testing was performed in accordance with the requirements set forth at 42 C.F.R.
493.801.
79. Dr. Johnstone failed to ensure that quality control and quality assurance
programs were established and
maintained in Petitioner's laboratory, and he failed to identify failures in
quality as they occurred. 42
C.F.R. 493.1445(e)(5).
80. Petitioner's laboratory's procedure manuals did not have any documentation
for doing quality control.
Tr. 81; HCFA Ex. 1 at 15.
81. Dr. Johnstone failed to have in place a system by which to monitor the
competency of Petitioner's
laboratory employees. Tr. 82-83; HCFA Ex. 1 at 16; see also Finding 85.
82. Dr. Johnstone failed to ensure that Petitioner's laboratory procedure and
policy manuals were current,
complete and approved, especially regarding gonorrhea cultures and quality control.
HCFA Ex. 1 at 17;
Tr. 83-84.
83. Dr. Johnstone failed to assign in writing the duties and responsibilities
involved in all phases of the
patient testing process for Petitioner's laboratory's technical consultant,
technical supervisor, and testing
personnel. HCFA Ex. 1 at 17-18; Tr. 87-88.
84. Petitioner's laboratory last reviewed charts for completeness of laboratory
work documentation on
April 3, 1992. Tr. 84-86; HCFA Ex. 1 at 18-19.
85. Petitioner's laboratory did not have an ongoing mechanism to evaluate the
effectiveness of its policies
and procedures for assuring employee competence. Tr. 89; HCFA Ex. 1 at 19; see
also Finding 81.
86. Petitioner failed to meet the Condition for Laboratory Director, in violation of 42 C.F.R. 493.1441.
87. HCFA's Notice, dated May 23, 1995, provided Petitioner with adequate notice
that non-compliance
with respect to the laboratory director condition, in violation of 42 C.F.R.
493.1441, would independently
support revocation of Petitioner's CLIA certificate.
88. Petitioner's failure to meet the Condition for Laboratory Director forms
an independent basis for
HCFA's revocation of Petitioner's CLIA certificate under 42 C.F.R. 493.1814(a)(2).
89. The CLIA statute and applicable regulations require HCFA to revoke a laboratory's
CLIA certificate
for at least one year if the laboratory "intentionally refers" its
proficiency testing samples to another
laboratory for analysis. 42 U.S.C. 263a(i)(4); 42 C.F.R. 493.801(b)(4) and 493.1840(b).
90. Neither I nor HCFA has the discretion in this case to revoke Petitioner's
CLIA certificate for less than
the mandatory minimum period of one year, or to substitute any lesser sanction.
91. HCFA is required to cancel a laboratory's approval to receive Medicare
payment for its services where
the laboratory's CLIA certificate is revoked. 42 C.F.R. 493.1808(a) and 493.1842(a)(1).
92. I affirm HCFA's one-year revocation of Petitioner's CLIA certificate, with
concomitant cancellation of
Petitioner's Medicare payments for laboratory services.
DISCUSSION
The word "intentionally" requires careful analysis in determining
whether Petitioner "intentionally
referred" its proficiency testing samples to another laboratory for analysis.
This is the key issue in this
case, and I will
address it first; thereafter I will address the remaining alleged deficiencies. 4/
I. Intentional Referral of Proficiency Testing Samples to Another Laboratory for Analysis
A. Statute and Regulations
CLIA provides both civil sanctions and criminal sanctions:
Civil Sanctions
Any laboratory that the Secretary determines intentionally refers its proficiency
testing samples to
another laboratory for analysis shall have its certificate revoked for at least
one year and shall be subject to
appropriate fines and penalties as provided for in section (h) 5/ of this section.
42 U.S.C. 263a(i)(4).
Regulations which implement CLIA parallel the Act's requirement that the Secretary
revoke 6/ a
laboratory's CLIA certificate where that laboratory improperly refers a proficiency
testing sample to a
reference laboratory:
The laboratory must not send PT samples or portions of samples to another laboratory
for
any analysis which it is certified to perform in its own laboratory. Any laboratory
that HCFA determines
intentionally referred its proficiency testing samples to another laboratory
for analysis will have its
certification revoked for at least one year. Any laboratory that receives proficiency
testing samples from
another laboratory for testing must notify HCFA of the receipt of those samples.
42 C.F.R. 493.801(b)(4).
Adverse action based on improper referrals in proficiency testing. If HCFA
determines
that a laboratory has intentionally referred its proficiency testing samples
to another laboratory for analysis,
HCFA revokes the laboratory's CLIA certificate for at least one year, and may
also impose a civil money
penalty.
42 C.F.R. 493.1840(b).
Criminal Sanctions
Any person who intentionally violates any requirement of this section or any
regulation
promulgated thereunder shall be imprisoned for not more than one year or fined
under Title 18, or both,
except that if the conviction is for a second or subsequent violation of such
a requirement such person shall
be imprisoned for not more than 3 years or fined in accordance with Title 18,
or both.
42 U.S.C. 263a(l).
The implementing regulations regarding such criminal violations provide:
Definitions. Intentional violation means knowing and willful noncompliance
with any
CLIA condition.
42 C.F.R. 493.2.
Section 353 also [p]rovides for imprisonment or fine for any person convicted
of
intentional violation of CLIA requirements.
42 C.F.R. 493.1800(a)(3)(i).
Criminal sanctions. Under section 353(1) of the PHS [Public Health Service]
Act, an
individual who is convicted of intentionally violating any CLIA requirement
may be imprisoned or fined.
42 C.F.R. 493.1806(e).
B. Definitions of "Intentionally" under CLIA
I conclude that "intentionally" is defined differently in CLIA for
civil violations than for criminal
violations.
The word "intentionally" is found in both the civil section of CLIA
and the criminal section of CLIA:
civil:
Any laboratory that the Secretary determines intentionally refers [emphasis
added] its
proficiency testing samples to another laboratory for analysis . . . .
42 U.S.C. 263a(i)(4).
criminal:
Any person who intentionally violates [emphasis added] any requirement of this
section
or any regulation promulgated thereunder . . . .
42 U.S.C. 263a(l).
Although the term "intentionally" is used in both the civil and criminal
sections of CLIA, the term need not
be accorded the same meaning in each of these sections. Upon careful analysis,
I conclude that the term
"intentionally refers" as it appears at 42 U.S.C. 263a(i)(4) indeed
does not have the same meaning as the
term "intentionally violates" as it appears at 42 U.S.C. 263a(l).
To begin with, the phrases are different in
that one contains the word "refers" and one contains the word "violates."
This is discussed more fully
below.
1. Factual background
Petitioner is a physician's office operating a laboratory, located in Madera,
California. Theodore
Johnstone, M.D., is Petitioner's owner and laboratory director. P. Br. 2, P.
R. Br. 4. Petitioner's laboratory
did testing in the following areas: general chemistry (i.e., glucose, blood
urea, nitrogen, creatinine, total
protein, cholesterol); isoenzymes; hematology (complete blood counts and platelet
counts); and
microbiology (gonorrhea screening only). Tr. 22, 255. The results obtained from
Petitioner's laboratory
tests were used in the treatment of Dr. Johnstone's patients.
Proficiency testing is designed to determine a laboratory's accuracy in doing
testing for its patients. Each
laboratory enrolls in a proficiency testing program and is sent specimens [proficiency
samples] for testing,
approximately three times a year. The specimens are clearly marked as proficiency
testing samples, so the
technician receiving them knows they are test materials, not patients' specimens.
The laboratory that is
being tested is required to test the
proficiency samples the same way it tests patients' specimens.
3rd Quarter 1994 Proficiency Testing Samples
Pursuant to 42 C.F.R. 493.801, Petitioner is enrolled in an approved proficiency
testing program
conducted by the American Association of Bioanalysts (AAB). P. Br. 3. On September
22, 1994,
Petitioner's laboratory received certain hematology samples for testing. HCFA
Ex. 2, P. Br. 3.
David Dohi is a licensed medical technologist who, in September 1994, was working
part-time at
Petitioner's laboratory [one day a week for two to three hours a day], full-time
at the Madera Community
Hospital (community hospital), and part-time at the hospital in Chowchilla [on
call every other weekend
and on call Wednesday nights]. HCFA Ex. 4; Tr. 262-263. Mr. Dohi's duties for
Petitioner's laboratory
included drawing blood, doing laboratory testing, and reporting the results.
HCFA Ex. 5; Tr. 262.
On September 28, 1994, Mr. Dohi tested Petitioner's 3rd quarter 1994 hematology
proficiency testing
samples within Petitioner's laboratory, using Petitioner's laboratory equipment.
[The evidence is unclear
whether Mr. Dohi counted platelets at Petitioner. Tr. 92.] HCFA Ex. 2; Tr. 232-238;
P. Br. 3.
On September 29, 1994, Mr. Dohi, on his own initiative and without the knowledge
of Dr. Johnstone, took
Petitioner's 3rd quarter 1994 hematology proficiency testing samples to the
laboratory at the community
hospital, where Mr. Dohi was also employed. Mr. Dohi retested Petitioner's hematology
proficiency
testing samples in the community hospital's laboratory, using the community
hospital's laboratory
equipment. Tr. 239, 246, 316-317; P. Br. 4.
The computer printouts obtained from the community hospital's Cell-Dyn 1600,
as well as Mr. Dohi's
admission that he ran the proficiency test samples on that instrument, constitute
proof that Petitioner's
hematology proficiency samples were analyzed at a laboratory other than Petitioner's,
on an instrument
other than Petitioner's own Cell-Dyn 400.
Mr. Dohi was unaware that his retesting of Petitioner's 3rd quarter 1994 hematology
proficiency testing
samples, at the community hospital's laboratory, was prohibited by law. Mr.
Dohi's motive for retesting
Petitioner's hematology proficiency testing samples at the community hospital's
laboratory was to check the
results he had obtained at Petitioner's laboratory. Tr. 239, 266-267. P. Br.
4.
Dr. Johnstone was unaware that Mr. Dohi had retested Petitioner's 3rd quarter
1994 hematology
proficiency testing samples at the community hospital's laboratory until, during
a survey of Petitioner's
laboratory conducted on February 28, 1995, a CLIA Laboratory Expert employed
by HCFA, Dorothy
Maurer, told Dr. Johnstone so. Tr. 17, 21; P. Br. 6; P. R. Br. 4.
The survey of Petitioner's laboratory conducted by Ms. Maurer on behalf of
HCFA on February 28, 1995,
was done to determine whether Petitioner was in compliance with requirements
imposed under CLIA. Ms.
Maurer analyzed Petitioner's records concerning its performance of proficiency
testing in the 2nd and 3rd
quarters of 1994.
Ms. Maurer testified that, in examining the testing documentation relating
to the hematology proficiency
samples, she realized that she "had two sets of answers." Tr. 38.
Although Petitioner has a Cell-Dyn 400
on the premises, Ms. Maurer stated that she found computer generated printouts
from a Cell-Dyn 1600
among the 3rd quarter 1994 proficiency testing documentation in Petitioner's
files. Tr. 37-40. Petitioner's
Cell-Dyn 400 does not have the ability to count platelets nor can it generate
computer printouts.
The computer printouts discovered by Ms. Maurer, each of which is titled "Cell-Dyn
1600 Specimen Data
Report," contained various hematologic values, including platelet counts.
HCFA Ex. 2 at 2-7. According
to Ms. Maurer, it would not have been possible for Petitioner to have obtained
these printouts from its own
instrument, i.e., the Cell-Dyn 400.
The platelet count was the only Cell-Dyn 1600 result that was reported as if
it had been Petitioner's result.
With the exception of the platelet count values, Mr. Dohi submitted to the AAB
the values obtained from
using Petitioner's Cell-Dyn 400. Tr. 235. Mr. Dohi admitted that the platelet
count values he reported to
the AAB were those obtained from the Cell-Dyn 1600 at the community hospital's
lab. Tr. 47, 286-287.
2. Parties' arguments
Petitioner's arguments
Petitioner responds to HCFA's citation of the Long case [see HCFA's arguments,
infra]: "Long is simply
incorrect insofar as it states that 'intentionally' is not defined in the applicable
regulations. 42 C.F.R. Part
493, which contains
the regulations relied upon by HCFA as the basis for revoking Petitioner's CLIA certificate, states:
As used in this part, unless the context indicates otherwise . . . .
Intentional violation means knowing and willful noncompliance with any CLIA
condition.
42 C.F.R. 493.2.
Petitioner argues that the definition of "intentional violation"
found in at 42 C.F.R. 493.2 is to be applied
to the terminology used in 42 C.F.R. 493.801(b)(4) and [493.]1840(b). P. Br.
7; P. R. Br. 3.
Petitioner argues further that revocation of a Petitioner's CLIA certificate
pursuant to 42 C.F.R.
493.801(b)(4) and 493.1840 is improper unless Petitioner or its employees knowingly
and willfully
violated a CLIA condition. Petitioner adds that 42 C.F.R. 493.2 makes it clear
that no intentional
violation can occur without the putative offender's knowing and willful noncompliance
with a legal duty
imposed by the CLIA regulations. P. Br. 7.
Petitioner maintains that neither Petitioner nor any of its employees had a
specific intent to violate a CLIA
condition at the time Dohi verified the proficiency testing results obtained
at Petitioner's laboratory. P. Br.
11. Moreover, Petitioner contends that Dr. Johnstone was unaware of Mr. Dohi's
referral of proficiency
testing samples until the survey and thus could not have intended to violate
the CLIA regulation. P. Br. at
6.
HCFA's arguments
HCFA argues: "[T]he issue at hand is whether petitioner "intentionally
referred" its proficiency samples to
another facility, not whether there was an "intentional violation"
of a CLIA condition. Although the
elements necessary for proving whether there was an intentional referral may
be similar to those for
proving an intentional violation of a Condition, the definition itself is not
controlling in making the
determination in petitioner's case." HCFA R. Br. 2.
HCFA argues that criminal case standards, including the "'knowing and
willful' elements," and "'specific
intent' to do something which the law forbids," "should not be controlling
on this administrative
proceeding." HCFA R. Br. 2-3.
HCFA (HCFA Br. 23) quotes Long Medical Laboratory v. HCFA, DAB CR334 (1994):
A laboratory contravenes the prohibition against referrals of proficiency
tests by
deliberately referring proficiency testing samples to another laboratory. Inadvertent
referrals of such
samples do not contravene the prohibition. The necessary elements of a violation
consist of: (1) a referral
by a laboratory to another laboratory of a proficiency testing sample, and (2)
knowledge by the referring
laboratory that the sample it is referring is a proficiency testing sample.
If it is established that a laboratory
has deliberately referred a proficiency testing sample to another laboratory,
then that laboratory's motive
for referring the sample is irrelevant. The Act and regulations do not distinguish
between deliberate
referrals that are motivated by good intentions and those which are motivated
by some other purpose.
Long, supra, at 6.
HCFA continues: "With respect to the element of 'intent' that is contained
in both the statute and
regulation, the Administrative Law Judge [ALJ] in Long noted that while the
term is not defined, 'it is
apparent, from both the language of CLIA and the regulations, that it was intended
that this term be given
its common and ordinary meaning.' Long, supra, at 6. The ALJ then notes that
in Webster's New
Collegiate Dictionary, 1975 ed., at 601, 'Intention' is defined to mean a determination
to act in a certain
way. 'Intentional' or 'intentionally,' means to act by intention or design.
Id. 'Thus, when one acts
'intentionally,' he or she acts deliberately.'" Long, supra, at 6. HCFA
Br. 25-26. "[T]he knowledge
element...is satisfied by showing that the referring laboratory knew the sample
it was referring was a
proficiency testing sample as opposed to a patient sample." HCFA R. Br.
3.
3. Purpose of CLIA
The Clinical Laboratory Improvement Amendments of 1988 (CLIA), enacted by Congress,
require
certification of all laboratories that perform clinical diagnostic tests on
human specimens. CLIA was
established to address the issue of unacceptably high error rates at unregulated
laboratories and the dangers
to patients that these high laboratory error rates posed. H.R. Rep. No. 899,
100th Cong., 2d Sess. 14,
reprinted in 1988 U.S.C.C.A.N. at 3831; S. Rep. No. 561, 100th Cong., 2d sess.
3-4. Congress intended
CLIA to establish a single set of standards to govern all providers of laboratory
services, including those
which provide laboratory services to Medicare beneficiaries. See H.R. Rep. No.
899, 100th Cong., 2d
Sess. 8, reprinted in 1988 U.S.C.C.A.N. at 3828. 7/
The authority to enforce CLIA requirements is granted to the Secretary of Health
and Human Services
(Secretary). Under CLIA, the Secretary is authorized to inspect clinical laboratories
and, in effect, license
them to perform tests. 42 U.S.C. 263a (esp. 263a(b) and 263a(f)); 42 C.F.R.
493.1800; See Consumer
Federation of America and Public Citizen v. U.S. Dept. of Health and Human Services,
83 F. 3d 1497
(D.C. Cir. 1996).
The importance of proficiency testing as a means of measuring and ultimately
ensuring laboratory
competence was noted by Congress as follows:
The Committee's investigation focused particularly on proficiency testing
because it is considered
one of [the] best measures of laboratory performance. It is arguably the most
important measure, since it
reviews actual test results rather than merely gauging the potential for good
results . . .
Proficiency testing is a method of externally validating the level of a laboratory's
performance.
Proficiency testing is not currently conducted by HHS, but is conducted by private
agencies. . . . The
standard testing methodology currently in use involves sample test specimens
being sent by mail to a
laboratory by the proficiency testing agency. The laboratory then analyzes the
samples and returns the
results of the test to the proficiency testing organization. The proficiency
testing organization typically
calculates the mean of the test results, determines an acceptable range variation
based on standard
deviations from the mean, and reports the results to the lab.
The major problems identified by the Committee were lax Federal oversight and
direction, lack of
proficiency testing for many analytes, inconsistent criteria for acceptable
laboratory performance, and
improprieties by laboratories in handling specimen samples.
. . .
A significant deficiency in the current proficiency testing regime is its
inability to assure that
proficiency testing samples are treated like patient specimens. Samples are
mailed to laboratories, and
although proficiency testing organizations recommend that tests be treated in
the same manner as patient
samples, there was evidence that laboratories retest samples repeatedly to ensure
satisfactory results and
send proficiency testing samples out to other laboratories for analysis. The
only way to guarantee that
samples are treated by the same personnel, at the same speed, using the same
equipment as patient
specimens is though [sic] blind or on-site proficiency testing. The committee
learned, however, that such
testing can be quite expensive and may have to be used with discretion to assure
proper processing of
specimens.
H.R. Rep. No. 899, 100th Cong., 2d Sess. 8, reprinted in 1988 U.S.C.C.A.N. at 3828, 3836, 3837.
Thus, Congress, in enacting CLIA, was concerned about, among other things,
laboratories that were
sending their proficiency testing samples to other laboratories for analysis
or retesting to ensure a
satisfactory result. It is within this context that Congress authored the prohibition
on intentional referrals
of proficiency testing. The Act mandates revocation of a CLIA certificate for
improper referral of
proficiency testing samples by a laboratory. It states that:
Any laboratory that the Secretary determines intentionally refers its proficiency
testing samples to
another laboratory for analysis shall have its certificate revoked for at least
one year . . . .
42 U.S.C. 263a(i)(4).
4. Definition of "intentionally," as in "intentionally refers"
"Intentionally" is not defined in the CLIA statute, but some assistance
is found in the regulations.
"Intentional violation" is defined in the regulations as "knowing
and willful noncompliance with any CLIA
condition." 42 C.F.R. 493.2 ("Definitions").
The phrase "intentional violation" does not appear elsewhere in the
pertinent regulations, other than in the
definitions section, as just quoted, and as follows:
Section 353 also [p]rovides for imprisonment or fine for any person convicted
of intentional
violation of CLIA requirements.
42 C.F.R. 493.1800(a)(3)(i).
The phrase "intentionally violating" appears in the pertinent regulations,
also solely in connection with
criminal sanctions:
Criminal sanctions. Under section 353(1) of the PHS [Public Health Service]
Act, an individual
who is convicted of intentionally violating any CLIA requirement may be imprisoned
or fined.
42 C.F.R. 493.1806(e).
After careful study of the pertinent portions of the statute and the regulations,
I conclude that "intentional
violation" is defined by the regulations for the sole purpose of clarifying
the phrase "intentionally violates"
which is found in the CLIA statute only in the criminal section [42 U.S.C. 263a(l)].
The "knowing and
willful" requirement provided by the regulation is consistent with the
element of criminal offenses known
as "scienter," "culpability," or "guilty knowledge."
By providing a definition for "intentional violation", the authors
of the regulations have explicitly provided
guidance on how to interpret 42 C.F.R. 493.1800(a)(3)(i) and 493.1806(e). There
is little doubt that,
with respect to the imposition of criminal sanctions, in determining whether
there was an intentional
violation, the legal standard of "knowing and willful" is to be applied.
Criminal convictions, particularly for persons who work in health care, trigger
extremely serious
consequences. It is reasonable to require proof of specific intent before subjecting
a person to criminal
penalties under CLIA. CLIA has clearly delineated two distinct types of penalties
-- the first, directed at a
laboratory and involving civil sanctions (regarding the laboratory's CLIA certificate,
civil money penalties,
costs and the like); -- and the second, directed at a person and involving criminal
penalties (imprisonment
or a fine or both). [See 42 C.F.R. 493.1806 for available sanctions.]
Under CLIA, a laboratory is subject to inspection and a variety of civil penalties
for failing to comply with
CLIA standards. 42 U.S.C. 263a(g), (h), (i). ["Principal sanctions,"
such as suspension, revocation, and
limitation of the laboratory's CLIA certificate, are provided by 42 U.S.C. 263a(i).
"Intermediate" or
"alternative sanctions," such as directed plans of correction, civil
money penalties, and onsite monitoring
costs, are provided by 42 U.S.C. 263a(h).]
In sharp contrast are the CLIA penalties that are criminal in nature. 42 U.S.C.
263a(l). The potential
penalties include imprisonment for up to one year and a fine or both. Even more
serious, a repeat offender
can be imprisoned for up to three years and fined or both.
The regulations go to the effort of defining "intentional violation"
to ensure that sufficient scienter is
proved before a person can be convicted of a criminal violation under CLIA.
The fact that "intentional
violation" is specifically defined in the regulations [42 C.F.R.
493.2] suggests that the definition is different from its common and ordinary
meaning, and in fact, it is.
Nowhere do the regulations define the term "intentionally referred,"
which is contained in the regulations at
42 C.F.R. 493.801(b)(4) and 493.1840(b). "Intentionally refers" is
found in the statute at 42 U.S.C.
263a(i)(4). Neither Congress nor the Secretary chose to define or modify the
word "intentionally" in the
context of "intentionally referred its proficiency testing samples to another
laboratory for analysis." Where
"intentionally" is not specifically defined in the context of CLIA
civil sanctions, one can infer that it should
be given its common and ordinary meaning.
This conclusion is in accordance with that of Administrative Law Judge Steven
Kessel in the case of Long
Medical Laboratory v. HCFA, DAB CR334 (1994). Although in Long Petitioner admitted
that it had
intentionally referred proficiency testing samples for testing, Judge Kessel
nonetheless determined that the
word "intentionally" should be given its common and ordinary meaning.
As stated in Long, "intention" is a
determination to act in a certain way. Long, at 6 (citing Webster's New Collegiate
Dictionary, 1975 ed., at
601). When one acts "intentionally," he or she acts deliberately,
regardless of motivation. Long, at 6 - 9.
Accordingly, I find that "intentionally referred" [as in "intentionally
referred" its proficiency testing
samples to another laboratory for analysis] requires not specific intent, but
general intent, that is, an intent
to act. No guilty knowledge, no culpability, no scienter is required. Motive
is irrelevant. It is necessary
merely that a person act deliberately, that is, not inadvertently.
In current practice, where proficiency testing samples are clearly marked,
enabling the technician receiving
them to know they are test materials, not patients' specimens, it is difficult
to conceive of an inadvertent
referral. If proficiency testing samples are referred to another laboratory
for analysis, with the knowledge
that they were proficiency testing samples, the referral is intentional, that
is, deliberate, not inadvertent. 8/
5. Further consideration of Petitioner's arguments regarding definition of
"intentionally,"
as in "intentionally refers"
Mr. Dohi testified that he was the laboratory technologist who had run the
tests on the hematology samples.
Tr. 232-233. He admitted that he had tested the hematology proficiency test
samples on both the Cell-Dyn
400 at Petitioner and on the Cell-Dyn 1600 at the lab at community hospital.
Tr. 234-235, 239, 269-271,
287-288; HCFA Exs. 4, 5. Mr. Dohi stated that the reason he took the hematology
test samples to the
community hospital's lab and analyzed the samples on the Cell-Dyn 1600 there,
was that he wished to
verify the results he had obtained using Petitioner's Cell-Dyn 400. HCFA Ex.
5.
Although I agree with HCFA that Mr. Dohi "should have known" that
he was circumventing the purpose of
proficiency testing by analyzing the samples at another laboratory, on different
and more sophisticated
instruments [HCFA R. Br. 5 - 6], I am persuaded that he did not know. His actions
appear to me to be
more the result of scientific curiosity than of any intent to violate the law.
I agree with the following
statement of Petitioner [P. Br. 11]:
Neither Petitioner nor any of its employees had a specific intent to violate
a CLIA
condition at the time Dohi verified the proficiency testing results obtained
at Petitioner's laboratory.
I agree with Petitioner that Mr. Dohi did not know that his action of retesting
Petitioner's proficiency
testing samples at another laboratory was prohibited by law, as his statements
to Ms. Maurer, his
statements of corrective action, and his testimony demonstrate. P. Br. 4, 12.
Mr. Dohi still did not know
his action was prohibited by law when, in May 1995, he wrote a Corrective Action
Plan that included the
potential of future retesting of Petitioner's proficiency testing samples at
another laboratory! [P. Br. 12 -
14]. Also significant to me is that Mr. Dohi placed the Cell-Dyn 1600 printouts
in Petitioner's files and did
not purge them. P. Br. 4, 12.
Nevertheless, whether Mr. Dohi "should have known," and whether he
had specific intent to violate a
CLIA condition, are irrelevant to the issue at hand.
HCFA need only establish a general intent to act, and not, as Petitioner suggests,
specific intent, as would
be required in a criminal case. It is highly improbable that, within the framework
of civil penalties against
an entity, where no loss of personal liberty is involved, Congress would require
specific intent in order to
establish a CLIA violation under the statute's civil penalty provisions. Here,
a laboratory is subject to civil
administrative sanctions for failure to comply with statutory requirements.
To prove "intention" in the context of 42 U.S.C. 263a(i)(4), 42 C.F.R.
493.801(b)(4) and 493.1840(b),
HCFA is not required to prove what Mr. Dohi was thinking when he took the proficiency
samples to
another laboratory and ran the tests there. The issue is whether Mr. Dohi's
actions were intentional, i.e.,
deliberate (not inadvertent). The uncontroverted evidence in this case is that
Mr. Dohi referred proficiency
test samples to another laboratory intentionally. Mr. Dohi has admitted doing
so.
Regardless of motivation, Mr. Dohi acted with the requisite general intent
to satisfy the civil penalty
provision of CLIA, that is, the intent to act. Mr. Dohi acted deliberately,
that is, not inadvertently, in
obtaining test results elsewhere. It is cheating to look at another's answer
on a test, even if merely to
confirm one's own answer. Anyone looking at answers different from his own would
likely compare and
analyze them before forming any intent about what to do with one's own answers.
Mr. Dohi obtained platelet count values for Petitioner's proficiency testing
samples from the Cell-Dyn 1600
at the community hospital's laboratory. The platelet count was the only item
reported to AAB from
Petitioner's retesting of its proficiency testing samples on the Cell-Dyn 1600
at the community hospital's
laboratory. All of the remainder of Petitioner's hematology proficiency testing
was reported as performed
at Petitioner, on the Cell-Dyn 400. Whether or not a laboratory reports the
information it has obtained
from another laboratory's analysis of its proficiency testing samples, it is
the obtaining of the analysis itself
from the other laboratory which constitutes the intentional referral.
Accordingly, I find that Petitioner intentionally referred its hematology proficiency
testing samples to
another laboratory for analysis, in violation of 42 C.F.R. 493.1840(b) and 493.801(b)(4).
Petitioner has
not disputed that a referral of proficiency testing samples occurred here. As
stated above, Petitioner admits
taking the proficiency test samples to the community hospital's laboratory and
running the tests there on
that hospital's Cell-Dyn 1600.
Congress enacted an especially strong prohibition against intentionally referring
proficiency testing
samples to another laboratory for analysis, by requiring mandatory revocation
for at least one year as the
sanction. Clearly, Congress wanted the practice to stop.
While the actions of Mr. Dohi and Dr. Johnstone may not have been as egregious
as that of the petitioner in
the Long case, they still contravened the purpose of the CLIA statute and regulations.
Where intentional referral of a laboratory's proficiency testing samples to
another laboratory for analysis
has occurred, there is no possibility of a less severe sanction than a one-year
minimum mandatory
revocation. The statute itself specifies the sanction:
Any laboratory that the Secretary determines intentionally refers its proficiency
testing samples to
another laboratory for analysis shall have its certificate revoked for at least
one year . . . .
42 U.S.C. 263a(i)(4).
II. Enrollment and Testing of Samples -- Condition
The laboratory must test its proficiency testing samples in the same manner
as patients' specimens. 42
C.F.R.
493.801.
The enrollment and testing of samples condition includes the "testing
of proficiency testing samples"
standard. 42 C.F.R. 493.801(b). Within that standard is found the prohibition
against intentional referral
of proficiency testing samples to another laboratory for analysis. 42 C.F.R.
493.801(b)(4). The
intentional referral issue has been discussed above. See pp. 11-24 supra.
Hematology proficiency testing
With respect to the 3rd quarter 1994 hematology proficiency testing results,
HCFA alleges that Petitioner
did not test the hematology samples using its routine method nor did it test
the samples in the same manner
or the same number of times as it tested patient samples.
I conclude that Petitioner's testing of the hematology samples on the Cell-Dyn
1600 at the community
hospital violated its obligation to conduct its proficiency tests using the
routine method, 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), (b)(1) and (b)(2).
Hemacytometer
Although there is no dispute that the reported platelet count values were
obtained from the Cell-
Dyn 1600 at the community hospital (Tr. 286-287), HCFA disputed Mr. Dohi's claim
that he did use an
instrument called a hemacytometer to count the platelets and that he ordinarily
uses this at Petitioner. Ms.
Maurer alleged that Mr. Dohi had informed her that he counted platelets using
a "smear" technique, which
would give an estimated number. 9/ Tr. 141. Ms. Maurer stated that she did not
look to see if Petitioner
had a hemacytometer because Mr. Dohi never told her he used one. Tr. 115. With
respect to the "smear"
method, Ms. Maurer expressed her opinion that no one had ever "put down
an actual number on the smear
method". She stated that "the smear method is simply for an estimate
of the platelets. I had never heard of
anybody else ever doing that." Tr. 144.
Mr. Dohi denied using the "smear" method, and stated that he used
a hemacytometer to do the
platelet counts. Tr. 238, 240, 287. He described using the hemacytometer as
doing a "manual" platelet
count. Tr. 241-242.
After reviewing the testimony of Ms. Maurer, Mr. Dohi, and Dr. Johnstone, I
conclude that I am not
able to make a satisfactory determination on what platelet counting method Petitioner
routinely used
(except that a Cell-Dyn 1600 was not routinely used).
Chemistry proficiency testing
With respect to the 2nd quarter 1994 chemistry proficiency testing results,
HCFA alleges that Petitioner did
not test the chemistry isoenzyme samples in the same manner or the same number
of times as it tested
patient samples. Ms. Maurer testified that the chemistry isoenzyme test samples
were run twice. As proof
of this, she stated that there was a worksheet on which Petitioner reported
two sets of answers for each test.
Tr. 43-46; HCFA Ex. 7 at 2. Ms. Maurer stated that there should have been only
one set of answers.
Moreover, although there were two sets of answers, Ms. Maurer could locate only
one set of answers in the
printout from the chemistry analyzer. Tr. 44, 57.
Mr. Dohi testified that he was not the technician who performed the testing
on the chemistry samples. Tr.
245. He stated that he did not know why the tests were run twice. Tr. 245-246.
Mr. Dohi was unable to
find the documentation showing the other set of numbers. Tr. 123. Petitioner
did not introduce any
evidence to contradict Ms. Maurer, either at the hearing or in its briefs. I
conclude that Petitioner's
retesting of the chemistry isoenzyme samples violated its obligation to conduct
its proficiency tests in the
same manner and for the same number of times that it routinely performs patient
tests.
Proficiency testing documentation
Ms. Maurer found also that relevant proficiency testing documentation, as required
by 42 C.F.R.
493.801(b)(5), was either missing or incomplete at the time of the survey. She
testified that copies of the
attestation statements for the hematology samples for the third event and the
chemistry samples for the
second event were missing. Tr. 40-41, 52-53. Petitioner failed to document the
date it ran the tests on the
proficiency testing samples, when it received the samples, and that the tests
were done there (at Petitioner's
laboratory). Tr. 55, 59-60. See HCFA Ex. 1 at 6. Petitioner failed to maintain
specimen logs with respect
to the proficiency testing in chemistry and hematology. Tr. 55. Petitioner failed
to maintain copies of all
proficiency testing records for 1994. HCFA Ex. 1 at 7. With respect to the second
event for chemistry
proficiency testing, Ms. Maurer testified that she was unable to locate the
printout with the chemistry
results and could not document that the tests had been performed. Tr. 57, 80,
102.
Mr. Dohi did not dispute that some proficiency test documentation was missing
at the time of the survey.
Tr. 238. He acknowledged that he could not find the worksheet where he had written
the results obtained
from Petitioner's Cell-Dyn 400. Tr. 271. Mr. Dohi admitted that he had no proof
that he had run the
samples on the Cell-Dyn 400. Tr. 271. Mr. Dohi admitted that he could not find
the worksheet where he
had written the platelet values that he had obtained using the hemacytometer.
Tr. 238, 286. I conclude that
HCFA has proven that Petitioner was deficient in its recordkeeping with respect
to proficiency testing.
III. Patient Test Management -- Condition
The laboratory must employ and maintain a system that provides for proper patient
preparation; proper
specimen collection, identification, preservation, transportation, and processing;
and accurate result
reporting. 42 C.F.R. 493.1101.
With respect to the Patient Test Management Condition, Ms. Maurer alleged that
Petitioner was deficient
regarding documentation and recordkeeping, quality control, and its gonorrhea
screening. In the area of
documentation and recordkeeping, Ms. Maurer testified that Petitioner did not
have specimen logs and had
an inadequate and outdated procedure manual. Under 42 C.F.R. 493.1103(a), which
is cited in HCFA Ex.
1, a "laboratory must have available and follow written policies and procedures
for . . . conditions for
specimen transportation." Ms. Maurer testified:
[T]he procedure manual did not include any directives for handling of specimens
at all. They did not
have any directives at all on taking specimens to another laboratory for confirmation
or further testing.
There were no log sheets to follow a specimen that was transported elsewhere.
I don't know how they kept
track of them.
Tr. 61.
Ms. Maurer testified also that Petitioner's "procedure manual is old and
outdated." Ms. Maurer stated that
"when you change a procedure then you should take your old procedure out."
Tr. 84. She discovered that
the manual contained procedures that Petitioner was no longer doing. Id. In
addition, Ms. Maurer
discovered that, although Petitioner was conducting gonorrhea screenings, its
procedure manual did not
contain any written procedures for this. Tr. 75. (I discuss Petitioner's deficient
procedure manual further
in my discussion regarding Petitioner's deficient practice in conducting gonorrhea
screenings).
HCFA's evidence, including Ms. Maurer's testimony, establishes that Petitioner
did not comply with the
condition of participation for Patient Test Management set forth at 42 C.F.R.
493.1101.
Further support for Ms. Maurer's findings regarding Petitioner's deficient
documentation is found in
Petitioner's Exhibit 5. Petitioner, in this exhibit, attempts to show that it
has implemented adequate
recordkeeping and documentation systems. Tr. 250-259.
IV. Quality Control -- Standards
In the area of quality control, Ms. Maurer testified that, for all types of
laboratory testing performed in a
day, quality control should be conducted on that day for those tests. Tr. 67,
72, 74. The regulation
requires 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); HCFA Ex. 1
at 10. Quality control is
conducted on a known sample, of which the testing results would already be known.
Tr. 67, 74. By
performing quality control, a laboratory is able to check that its equipment
is operating properly and, also,
that its technologist is using the proper procedures. Tr. 67, 74.
Ms. Maurer stated that quality control in the area of hematology is to be performed
for every eight hours of
operation. Tr. 67. She alleged that Petitioner failed to perform quality control
daily in hematology. Tr.
68; HCFA Ex. 8. Specifically, I find that Petitioner failed to run hematology
quality control on four of 18
days in February 1995, when patients were tested. HCFA Ex. 8 at 1; HCFA Ex.
1 at 10.
Gonorrhea screenings
Other deficiencies identified by Ms. Maurer related to the gonorrhea screenings
conducted by Petitioner.
Under the regulations, a laboratory must have available a written procedure
manual for all of the tests it
performs. 42 C.F.R. 493.1211(a). Ms. Maurer testified that, initially, she was
unaware that Petitioner
was even doing gonorrhea screening because there was no indication in the procedure
manual that these
tests were being done. Tr. 61-63. 10/ Ms. Maurer testified:
You're to have written procedures for all testing that you do. . . . The technologist
should use the
procedures. The procedure should be available so people know what you are doing
in the laboratory, and
how you are doing it, and the correct way, and the equipment that you're using.
Tr. 75.
The lack of written procedures meant that Petitioner had no way of ensuring
that gonorrhea screenings
would be subject to proper and uniform protocols. By failing to document the
gonorrhea screening
procedures in its procedure manual, Petitioner violated the regulatory requirement
stated above.
In addition, the lack of culture media records indicated to the surveyor that
Petitioner had failed to follow
proper control procedures for the culture media used for gonorrhea screening,
resulting in a deficiency
under 42 C.F.R. 493.1218(f)(1). Petitioner also was found deficient in the area
of specimen
transportation, as evidenced by the absence of a tracking system for when Petitioner
sent gonorrhea
cultures to other labs.
Ms. Maurer discovered also that the temperature chart on Petitioner's incubator
indicated that the last time
the temperature was checked and recorded was in 1992. Tr. 63, 76. See HCFA Ex.
1 at 11. In addition,
the thermometer on the incubator was broken, a fact that was not discovered
by anyone until the time of the
survey. Tr. 278.
The regulations mandate that a laboratory "perform equipment maintenance
and function checks . . .
necessary for the proper test performance and test result reporting of equipment,
instruments and test
systems". 42 C.F.R. 493.1215. Petitioner's failure to notice the broken
thermometer on the incubator,
coupled with its failure to keep the temperature chart up-to-date, could have
jeopardized the accuracy and
reliability of the gonorrhea screening results. 11/ Petitioner admitted that
the incubator was in use despite
having a broken thermometer and that results were reported on cultures. Such
inadequate maintenance and
poor oversight of crucial laboratory instrumentation serves to underscore Petitioner's
laxness in
management. 12/
I find that Petitioner's deficiencies with respect to its gonorrhea screenings
cannot be considered to be
minor. It is apparent from Petitioner's violations that the manner in which
it conducted its gonorrhea
screenings was grossly inadequate and a cause for alarm. A likelihood existed
that these violations could
have adversely impacted the quality and reliability of the tests performed by
Petitioner.
V. Quality Assurance -- Standards
The laboratory must monitor, evaluate, and revise, if necessary, based on the
results of its evaluations, the
accuracy and reliability of test reporting systems, appropriate storage of records
and retrieval of test results.
42 C.F.R. 493.1703(f). Petitioner last reviewed charts for completeness of laboratory
work
documentation on April 3, 1992. Tr. 84-86; HCFA Ex. 1 at 18-19.
The evidence establishes that Petitioner did not have an ongoing mechanism
to evaluate the effectiveness
of its policies and procedures for assuring employee competence. 42 C.F.R. 493.1713;
Tr. 89; HCFA Ex.
1 at 19.
VI. Laboratory Director -- Condition
Notice
Before I discuss Petitioner's non-compliance with the condition of participation
for Laboratory Director set
forth at 42 C.F.R. 493.1441, I will address the preliminary issue of whether
HCFA gave Petitioner
adequate notice that this deficiency constitutes an independent basis for revocation
of its CLIA certificate.
Petitioner argues that HCFA's Notice was deficient in that it did not state
that HCFA had imposed the
sanction of revocation in connection with a violation of the Laboratory Director
condition. P. R. Br. 6.
Petitioner contends that "HCFA asserted for the first time at the hearing
. . . that Petitioner failed to meet . .
. 42 C.F.R. 493.1441 and that this failure was the basis for revocation of Petitioner's
CLIA Certificate."
Id. at 7.
I am not persuaded by Petitioner's assertion that it did not receive adequate
notice that its violation of the
Laboratory Director condition was a basis for revocation. HCFA's Notice, dated
May 23, 1995, states:
. . .[T]he supplemental information you submitted by letters dated May 16
and May 17, 1995, not only
reconfirm that your laboratory (see 42 C.F.R. 493.2) did in fact intentionally
refer its proficiency testing
samples to another laboratory for analysis, but your admissions therein regarding
your failure to meet your
overall management responsibilities as the director also further evidence your
contravention of the CLIA
condition at 42 C.F.R. 493.1441 - a violation which independently supports the
revocation of your CLIA
certificate under the terms of 42 C.F.R. 493.1814(a)(2).
Based on the language contained in the May 23, 1995 letter from HCFA to Petitioner,
I find that HCFA did
allege that Petitioner's non-compliance with respect to the Laboratory Director
condition would be a basis
for revocation. The contents of the letters establish to my satisfaction that
HCFA provided Petitioner with
adequate notice concerning this issue. I conclude that HCFA's Notice, dated
May 23, 1995, provided
Petitioner with adequate notice that violation of 42 C.F.R. 493.1441 would independently
support
revocation of Petitioner's CLIA certificate under 42 C.F.R. 493.1814(a)(2).
HCFA Br. 21-22; HCFA R.
Br. 8. While it appears that HCFA's Notice, dated May 23, 1995, focused on Petitioner's
alleged
intentional referral of its proficiency testing samples as a basis for the imposition
of sanctions, it is apparent
that HCFA also was premising the sanction of revocation on the alleged violation
of the laboratory director
condition. (See passage quoted above.)
The Notice sufficiently informed Petitioner that the alleged intentional referral
of proficiency samples and
the alleged violation of the laboratory director condition were each independent
grounds for the sanction of
revocation.
Deficiencies
The laboratory must have a director who . . . provides overall management and
direction in accordance
with 493.1445 of this subpart. 42 C.F.R. 493.1441.
I find that Petitioner's deficiencies in proficiency testing, quality control,
and documentation (including
procedure manual) establish that Petitioner failed to comply with the condition
of participation for
Laboratory Director set forth at 42 C.F.R. 493.1441. With respect to these alleged
deficiencies, Ms.
Maurer testified:
When you find that the conditions have not been met in such things as proficiency
testing, for example,
or quality control, and it has not been done properly, then you have to cite
your laboratory director for
failure to perform, and failure to see that it is being performed. It's up to
him to look at the laboratory and
to check those things.
Tr. 79.
In addition, Ms. Maurer testified that there was no evidence of any documentation
showing that Dr.
Johnstone was monitoring the competency of the laboratory employees. Tr. 82-83.
Ms. Maurer stated also
that Dr. Johnstone failed to ensure that the laboratory procedure and policy
manuals were up-to-date and
complete. Tr. 83-84; HCFA Ex. 1 at 17. Another deficiency identified by Ms.
Maurer was Dr. Johnstone's
failure to assign in writing the duties and responsibilities involved in all
phases of the patient testing
process for the testing personnel. Tr. 87-88; HCFA Ex. 1 at 18. Ms. Maurer discovered
also that Petitioner
last reviewed charts for completeness of laboratory work documentation on April
3, 1992. Tr. 84-86.
It is evident from the foregoing deficiencies, many of which were previously
described by Ms. Maurer in
conjunction with her testimony concerning Petitioner's non-compliance with the
conditions listed at 42
C.F.R. 493.801 and 493.1101, that Dr. Johnstone failed to supervise adequately
Petitioner's operations
and employees. As laboratory director, Dr. Johnstone was responsible for the
overall operation and
administration of Petitioner in accordance with 42 C.F.R. 493.1445. Part of
that responsibility is to
ensure that quality control and quality assurance programs are established and
maintained to assure the
quality of laboratory services provided and to identify failures in quality
as they occur. 42 C.F.R.
493.1445(e)(5). See sections IV. and V. above. Dr. Johnstone had a duty to keep
apprised of the day-to-
day operation of his laboratory and to exercise proper supervision over his
employees. He was obligated
also to familiarize himself with the applicable CLIA regulations. With respect
to proficiency testing, Dr.
Johnstone had the ultimate responsibility for ensuring that proficiency testing
was performed in accordance
with the requirements set forth at 42 C.F.R. 493.801. HCFA Br. 30; HCFA R. Br.
9-11.
A primary objective of the CLIA requirements is to provide the public with
safe and reliable laboratory
services. Congress, in enacting CLIA, intended to assure that clinical laboratories
perform medical tests
accurately and reliably.
I conclude from the deficiencies that Dr. Johnstone failed to carry out his
duties as Laboratory Director, in
violation of the Condition for Laboratory Director set forth at 42 C.F.R. 493.1441.
Dr. Johnstone's failure
to ensure that the proficiency testing samples were tested as required, and
his failure to have adequate
quality control and patient test management programs, demonstrate his neglect
of his responsibilities as a
laboratory director.
Petitioner's failure to meet the Condition for Laboratory Director forms an
independent basis for HCFA's
revocation of Petitioner's CLIA certificate under 42 C.F.R. 493.1814(a)(2).
VII. HCFA Required to Revoke Petitioner's CLIA Certificate for a One-Year Period
Enforcement of CLIA is intended to protect individuals served by laboratories
against substandard testing,
to safeguard the public against health and safety hazards which might result
from noncompliance, and to
motivate laboratories to comply with CLIA requirements. 42 C.F.R. 493.1804(a)(1)
- (3).
The evidence establishes that Petitioner was out of compliance with the Conditions
of Participation set
forth at 42 C.F.R. 493.801 [Enrollment and Testing of Samples], 493.1101 [Patient
Test Management],
and
493.1441 [Laboratory Director].
The CLIA statute and applicable regulations require HCFA to revoke a laboratory's
CLIA certificate for at
least one year if the laboratory "intentionally refers" its proficiency
testing samples to another laboratory
for analysis. 42 U.S.C. 263a(i)(4); 42 C.F.R. 493.801(b)(4) and 42 C.F.R. 493.1840(b).
Neither I nor HCFA has the discretion to revoke Petitioner's CLIA certificate
for less than the mandatory
minimum period of one year, or to substitute any lesser sanction. HCFA is required
to cancel a laboratory's
approval to receive Medicare payment for its services where the laboratory's
CLIA certificate is revoked.
42 C.F.R. 493.1808(a) and 493.1842(a)(1).
CONCLUSION
Petitioner intentionally referred its proficiency testing samples to another
laboratory for analysis during 3rd
quarter 1994. Accordingly, Petitioner's CLIA certificate must be revoked for
a one-year minimum
mandatory period, with concomitant cancellation of Petitioner's Medicare payments
for laboratory services.
Further, Petitioner's failure to meet the Condition for Laboratory Director
forms an independent basis for
HCFA's revocation of Petitioner's CLIA certificate.
Jill S.
Clifton
Administrative Law Judge
1. CLIA refers to the Clinical Laboratory Improvement Amendments, enacted in
1988 (42 U.S.C.
263a).
2. Medicaid payments for laboratory services are also affected (42 C.F.R. 493.1809).
3. Petitioner's opening brief [Petitioner's "Post-Hearing Brief"]
is cited as "P. Br." Petitioner's
"Supplemental Brief" is cited as "P. R. Br."
HCFA's opening brief [HCFA's "Posthearing Memorandum"] is cited as
"HCFA Br." HCFA's
"Posthearing Reply Memorandum" is cited as "HCFA R. Br."
I cite to the transcript as "Tr." (page).
4. The remaining alleged deficiencies relate to the enrollment and testing
of samples condition, 42
C.F.R. 493.801; patient test management condition, 42 C.F.R. 493.1101; and laboratory
director
condition, 42 C.F.R. 493.1441.
5. "Intermediate" civil sanctions, such as civil money penalties,
are found in 42 U.S.C. 263a(h), and are
alternative remedies to the "principal" civil sanctions of CLIA certificate
suspension, revocation, or
limitation, found in 42 U.S.C. 263a(i).
6. Revocation is a civil sanction.
7. The Act defines a clinical laboratory to be a facility for the biological,
microbiological, serological,
chemical, immuno-hematological, hematological, biophysical, cytological, pathological,
or other
examination of materials derived from the human body for the purpose of providing
information for the
diagnosis, prevention, or treatment of any disease or impairment of, or the
assessment of the health of,
human beings.
42 U.S.C. 263a(a).
8. The inclusion by Congress of the word "intentionally" in the civil
context may well be more
significant in the case of "blind" proficiency testing, in which the
laboratory technicians cannot tell the test
samples from patients' specimens. [Patients' specimens of course may be referred
to other laboratories.]
9. According to Ms. Maurer, the use of a hemacytometer to perform a platelet
count is an appropriate
and acceptable method. Tr. 115. Ms. Maurer testified further that platelet counting
is very difficult and
that using a Cell-Dyn 1600 to count platelets would give a more accurate count
than a hemacytometer. Tr.
142-144.
10. Ms. Maurer stated further that, because Petitioner was conducting gonorrhea
screenings, it was
required to undergo proficiency testing in this area. Tr. 62, 64, 79-80. I will
not discuss whether or not
Petitioner was required to undergo proficiency testing with respect to gonorrhea
screening since HCFA did
not cite this as a deficiency in the HCFA 2567.
11. Mr. Dohi testified that he could not recall if he ever saw a positive culture.
However, he conceded
that "it is a possibility" that the reason he may not have seen a
positive culture might be due to the fact that
organisms were being killed due to incorrect incubator temperature. Tr. 278-279.
12. Petitioner pointed out at the hearing that it replaced the broken incubator
thermometer following the
survey.