Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Williams Bio Medical Laboratory, Petitioner,
-v.-
Health Care Financing Administration.
Date: August 5, 1997
Docket No. C-96-101
Decision No. CR487
DECISION
This case arises under the Clinical Laboratory
Improvement Amendments of 1988 (referred to as "CLIA" or
"the Act"), 42 U.S.C. § 263a and on implementing
regulations in 42 C.F.R. Part 493. On November 28, 1995,
the Health Care Financing Administration (HCFA) notified
Williams Bio Medical Laboratory (WBML or Petitioner)
that, based on a survey completed on October 26, 1995,
deficiencies had been found in Petitioner's facility
which remained uncorrected 12 months after having been
identified originally in surveys dated August 4, 1994 and
November 2, 1995. HCFA notified Petitioner also that it
had failed to comply with an August 24, 1995 Directed
Plan of Correction, which had required correction of all
deficiencies by September 29, 1995. As a result, HCFA
informed Petitioner that it had decided to revoke
Petitioner's CLIA certificate and cancel all Medicare
payments for services furnished by Petitioner. By letter
dated December 2, 1995, Petitioner timely requested a
hearing. 1/
This case was assigned initially to Administrative Law
Judge Mimi Hwang Leahy. In a Ruling dated August 20,
1996, Judge Leahy granted partial summary judgment, based
on HCFA's motion for summary judgment. Judge Leahy ruled
that only two issues remained for hearing: (1) whether
Petitioner had deficiencies that remained uncorrected
over 12 months following the survey of August 4, 1994;
and (2) whether Petitioner had failed to comply with the
terms of the Directed Plan of Correction requiring that
all deficiencies (whether condition-level or standard-
level) be corrected by September 29, 1995. Specifically,
Judge Leahy ruled that, under the first issue, HCFA will
prevail (and Petitioner will lose) if evidence from the
October 26, 1995 survey proves that Petitioner failed to
correct all standard-level and condition-level
deficiencies from the August 4, 1994 survey. 42 C.F.R.
§§ 493.1816(b), 493.1820, 498.1828(b)(2). Judge Leahy
further ruled that, under the second issue, HCFA will
prevail (and Petitioner will lose) if evidence from the
October 26, 1995 survey proves that by September 29,
1995, Petitioner had even one standard-level deficiency
that remained uncorrected from either of the two prior
surveys. If HCFA prevails on either one of these two
issues, then HCFA is entitled to prevail as a matter of
law on its imposition of the sanctions revoking
Petitioner's CLIA certificate and canceling all Medicare
payments to Petitioner. 42 C.F.R. §§ 493.1808(a),
493.1816(b), 493.1832(c), 493.1840(a)(7), and
493.1842(a). Finally, Judge Leahy ruled that Petitioner
must prevail on both issues for the sanctions imposed by
HCFA, in the notice of November 28, 1995, to be set
aside. Id.
On September 26, 1996, this case was reassigned to me. I
scheduled a hearing to commence on February 11, 1997,
solely on the issues remaining after Judge Leahy's ruling
of August 20, 1996. However, on February 7, 1997, in a
telephone prehearing conference, Petitioner withdrew its
request for an in-person hearing, and requested instead
that the case be heard based on an exchange of
documentary evidence and briefs. After consideration,
HCFA agreed to submit its case on briefs and documentary
evidence, including declarations. 2/
I have considered the relevant evidence, the applicable
law and the parties' arguments. Any argument or issue
raised by the parties that is not specifically addressed
in this decision I have rejected as either lacking in
merit or irrelevant. I conclude that Petitioner has
failed to prevail on either issue identified above. 3/
I conclude further that HCFA's determination to revoke
Petitioner's CLIA certificate and to cancel its approval
to receive Medicare reimbursement for its services is
authorized by CLIA and implementing regulations.
GOVERNING LAW
Congress enacted CLIA in order to guarantee that clinical
laboratories perform medical tests accurately. CLIA was
intended by Congress to establish a single set of
standards which 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 (1988), reprinted in 1988
U.S.C.C.A.N. 3828-3836 (House Report).
CLIA authorizes the Secretary of the United States
Department of Health and Human Services (Secretary) to
inspect clinical laboratories. The Act directs the
Secretary to establish standards to assure that clinical
laboratories certified by the Secretary perform tests
that are valid and accurate. 42 U.S.C. § 263a(f)(1).
Before a clinical laboratory can accept or solicit
specimens, a clinical laboratory must first receive a
certificate from the Secretary authorizing it to perform
the specific category of tests which the laboratory
intends to perform. 42 U.S.C. § 263a(b).
The Act provides for revocation of a CLIA certificate
under specified circumstances. These include, among
others things, failure of the laboratory's owner or
operator to comply with standards issued by the
Secretary, or failure by an owner or operator to abide by
an intermediate sanction issued by the Secretary. 42
U.S.C. § 263a.
In addition to standards established by the Act,
regulations are issued by the Secretary pursuant to CLIA
that establish standards for certification, provide a
framework for inspections, and provide for the imposition
of sanctions in the event that laboratories fail to
comply with the applicable standards.
Regulations provide for an enforcement process to assure
that clinical laboratories comply with the requirements
of CLIA and applicable regulations. Enforcement 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 the CLIA requirements. 42 C.F.R. § 493.1804(a)(1)-
(3).
Principal sanctions consist of remedies which HFCA may
impose for any of the reasons set forth in section
263a(i)(1) of the Act. 42 C.F.R. § 493.1840(a). HCFA
may impose principal sanctions where a laboratory has not
complied with applicable standards or where the
laboratory has not complied with an alternative sanction.
42 C.F.R. § 493.1840(a)(3), (7). Principal sanctions
may include revocation of a laboratory's CLIA certificate
and cancellation of its approval to receive Medicare
payments for its services. 42 C.F.R. §§ 493.1806,
493.1807, 493.1840(a), 493.1842.
BURDEN OF PROOF
By notice letter of March 26, 1997, I afforded the
parties the opportunity to file a supplemental brief
addressing what effect, if any, the decision in the case
of Hillman Rehabilitation Center, DAB 1611 (1997) might
have on this case. Neither party availed itself of the
opportunity. In Hillman, an appellate panel of the
Departmental Appeals Board held that HCFA has an initial
obligation to set forth the basis for its determinations
with sufficient specificity to allow the petitioner to
respond (the obligation to make a prima facie case). To
prevail, a petitioner must prove by a preponderance of
the evidence on the record as a whole that it is in
substantial compliance with relevant statutory and
regulatory provisions. Thus, under Hillman, the
petitioner, not HCFA, bears the ultimate burden of
persuasion. This case is governed by the burden of proof
set forth in Hillman.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Judge Leahy's Ruling of August 20, 1996 sets forth 33
Findings of Fact and Conclusions of Law (FFCL). These
are set out below. The rest of the FFCL pertain to the
October 26, 1995 revisit survey and to the resultant
November 28, 1995 notice letter issued by HCFA.
1. Pursuant to a CLIA survey conducted on August 3 and
4, 1994 by the California Department of Health Services
(State agency), Petitioner was found to have various
standard-level deficiencies as well as the following
seven condition-level deficiencies:
a. Enrollment and testing (proficiency
testing) samples (42 C.F.R. § 493.801);
b. Bacteriology (42 C.F.R. § 493.1227);
c. Laboratories performing high complexity
testing; laboratory director (42 C.F.R. §
493.1441);
d. Laboratories performing moderate complexity
testing; laboratory director (42 C.F.R. §
493.1403);
e. Quality assurance; moderate or high
complexity testing, or both (42 C.F.R. §
493.1701);
f. Patient test management; moderate or high
complexity testing, or both (42 C.F.R. §
493.1101);
g. General quality control; moderate or high
complexity testing, or both (42 C.F.R. §
493.1201).
HCFA Br. at 2-3; HCFA Ex. 1.
2. In response to the deficiencies found during the
survey which was completed on August 4, 1994, Petitioner
submitted a plan of correction which was found acceptable
by HCFA's agent (the State agency), and a revisit survey
was conducted. HCFA Ex. 3 at 1; HCFA Ex. 4 at 1.
3. The results of the revisit survey conducted on
November 2, 1994, showed that Petitioner had five of the
same condition-level deficiencies (FFCLs 1a to e) as
noted during the August 1994 survey. HCFA Ex. 2, 4.
4. After having provided Petitioner with the opportunity
to submit additional information or comments concerning
the possible imposition of sanctions (HCFA Ex. 3, 4),
HCFA notified Petitioner by letter dated August 24, 1995,
that the following alternative sanctions were being
imposed and that Petitioner had a right to appeal HCFA's
determinations:
a. state on-site monitoring (42 C.F.R. §
493.1836);
b. a directed plan of correction (42 C.F.R. §
493.1832) to correct all designated
deficiencies by September 29, 1995; and
c. the suspension of all Medicare and Medicaid
(Social Security Act, § 1902(a)(9)(C); 42
C.F.R. § 440.30(c), 440.2(b)) payments for
laboratory services (42 C.F.R. § 493.1828)
effective September 8, 1995.
HCFA Ex. 5.
5. The directed plan of correction stated: "EXPECTED
DATE OF CORRECTION FOR ALL DEFICIENCIES: On, or before
September 29, 1995." HCFA Ex. 2 at 3.
6. Petitioner received HCFA's notice imposing the
alternative sanctions and was aware that all deficiencies
should be corrected by September 29, 1995. P. Br. at 2.
7. Petitioner did not request a hearing to contest the
results of the above-mentioned August and November 1994
surveys, or to contest HCFA's imposition of alternative
sanctions pursuant to those survey results. P. Br. at 2.
8. Petitioner verified that Medicare and Medicaid
payments had stopped on September 8, 1995. P. Br. at 3.
9. Subsequent to the imposition of the alternative
sanctions and prior to October of 1995, Petitioner
changed its location and telephone number without
providing HCFA with advance notice. Declaration of
Franklin Barnes (HCFA Ex. 14); Petitioner's declaration
"Reference to Franklin R. Barnes Declaration."
10. After ascertaining Petitioner's new address, HCFA
conducted a scheduled revisit survey on October 26, 1995,
and found that 21 standard-level deficiencies still
remained uncorrected from the prior two surveys. HCFA
Ex. 7.
11. Petitioner was closed in November and has remained
closed since then. P. Br. at 3.
12. Based on the October 26, 1995 survey, HCFA notified
Petitioner by letter dated November 28, 1995 that, as a
result of the deficiencies which remained uncorrected
over the 12 months since the August 4, 1994 survey, as
well as Petitioner's failure to comply with the terms of
the Directed Plan of Correction requiring the correction
of all deficiencies by September 29, 1995, HCFA was
imposing the following principal sanctions:
a. revocation of Petitioner's CLIA
certificate, effective 60 days after receipt of
the notice letter unless a hearing is
requested; and
b. cancellation of all Medicare payments for
services furnished by the laboratory 15 days
from Petitioner's receipt of the notice letter,
in accordance with 42 C.F.R. §§ 493.1808(a),
493.1816(b), 493.1832(c), 493.1840(a)(7), and
493.1842(a).
HCFA Ex. 8.
13. Cancellation of Medicare payments under 42 C.F.R. §
493.1842 may be imposed before a hearing, and it
terminates any Medicare payment sanctions, regardless of
the original time frames. 42 C.F.R. § 493.1842(b), (c).
14. If a hearing is requested, the revocation of a CLIA
certificate does not take effect unless and until there
is a decision by an administrative law judge which
upholds HCFA's revocation determination. 42 C.F.R. §
493.1840(e).
15. By letter dated December 2, 1995, Petitioner timely
requested a hearing to contest the results of the October
26, 1995 survey.
16. By letters dated January 16, 1996 (HCFA Ex. 10) and
March 15, 1996 (HCFA Ex. 11), HCFA notified Petitioner
that it owed outstanding CLIA fees in the amount of $2549
and that Petitioner had a right to appeal the
determination of outstanding fees and the imposition of
the following sanctions for the nonpayment of CLIA fees:
a. revocation of Petitioner's CLIA certificate
effective March 21, 1996, if a request for hearing
was not received; and
b. cancellation of Medicare payments to
Petitioner within 15 days of receiving the
notice dated January 16, 1996.
HCFA Ex. 10, 11.
17. By letter dated March 28, 1996, HCFA informed
Petitioner that, since HCFA had not received the
outstanding fee payment or any request for hearing,
Petitioner's CLIA certificate was revoked as of March 21,
1996 for the nonpayment of CLIA fees, which is an
independent and separate basis from the reasons stated
for revoking Petitioner's CLIA certificate in HCFA's
notice of November 28, 1995. HCFA Ex. 13, 8.
18. The reasons provided by HCFA in its January 16, 1996
letter for imposing the sanctions of revocation of
Petitioner's CLIA certificate and cancellation of all
Medicare payments to Petitioner are separate and distinct
from those HCFA set forth in its November 28, 1995 notice
imposing the same sanctions against Petitioner. HCFA Ex.
13, 8.
19. Petitioner acknowledges that it had not paid the
CLIA fees and that it has no basis for appealing the
revocation of its CLIA certificate for that reason. P.
Br. at 2-4.
20. Unappealed determinations are binding upon
Petitioner and cannot be set aside in this proceeding.
See, e.g., 42 C.F.R. § 498.20(b).
21. Petitioner may not dispute HCFA's findings of
deficiencies from the survey which was completed on
August 4, 1994. FFCL 7, 20.
22. Petitioner may not dispute HCFA's findings of
deficiencies from the survey of November 2, 1994. FFCL
7, 20.
23. Petitioner may not dispute any of the sanctions HCFA
imposed by notice dated August 24, 1995, which resulted
from the surveys of August 3 and 4, 1994 and November 2,
1994. FFCL 7, 20.
24. The alternative sanction of a directed plan of
correction, imposed by notice of August 24, 1995, and
containing HCFA's directive for Petitioner to correct all
deficiencies by September 29, 1995, did not give specific
instructions on how Petitioner must make the corrections.
HCFA Ex. 2.
25. Petitioner may not dispute HCFA's determination that
it failed to pay its CLIA fees. FFCL 19, 20.
26. Petitioner may not dispute the sanctions HCFA
imposed based on Petitioner's nonpayment of CLIA fees.
FFCL 19, 20.
27. The only issues for hearing are whether, as
determined by HCFA on the basis of the October 26, 1995
revisit survey;
a. Petitioner had deficiencies which remained
uncorrected over the 12 months following the
survey which was completed on August 4, 1994,
and
b. Petitioner failed to comply with the terms
of the Directed Plan of Correction requiring
the correction of all deficiencies (whether
condition-level or standard-level) by September
29, 1995.
FFCL 4, 7, 12, 17.
28. Under the issue identified in FFCL 27a, HCFA will
prevail (and Petitioner will lose) if evidence from the
October 26, 1995 survey proves that Petitioner had failed
to correct all standard-level and condition-level
deficiencies from the August 4, 1994 survey. 42 C.F.R.
§§ 493.1816(b), 493.1820, 498.1828(b)(2).
29. Under the issue identified in FFCL 27b, HCFA will
prevail (and Petitioner will lose) if evidence from the
October 26, 1995 survey proves that, by September 29,
1995, Petitioner had even one standard-level deficiency
which remained uncorrected from either of the two prior
surveys. FFCL 5, 6, 20.
30. If relevant to either party's position on the issue
identified in FFCL 27b, either party may submit evidence
to prove whether Petitioner was closed for any period of
time up to and including September 29, 1995.
31. The effective dates specified by HCFA in its
November 28, 1995 notice for the imposition of sanctions
are in accord with the requirements of the regulations.
42 C.F.R. §§ 493.1842(b), 493.1844(h)(2), 493.1844(d)(2).
32. If HCFA prevails on either one of the two issues
identified above in FFCL 27, HCFA is entitled to prevail
also as a matter of law on its imposition of the
sanctions revoking Petitioner's CLIA certificate and
canceling all Medicare payments to Petitioner. 42 C.F.R.
§§ 493.1808(a), 493.1816(b), 493.1832(c), 493.1840(a)(7),
and 493.1842(a).
33. Petitioner must prevail on both issues identified
above in FFCL 27 in order to have me set aside the
sanctions imposed by HCFA in the notice letter dated
November 28, 1995 (revocation of Petitioner's CLIA
certificate and cancellation of Medicare payments to
Petitioner). Id.
34. By confirming letter dated October 10, 1995, HCFA
notified Petitioner that an onsite CLIA revisit survey
would be performed on October 26, 1995. HFCA Ex. 6.
35. On October 26, 1995, a second revisit survey was
conducted by the State agency. HCFA Ex. 14, at 5, para.
17.
36. The purpose of this second revisit survey was to
verify whether Petitioner had corrected all deficiencies
identified in the surveys of August 4, 1994 and November
2, 1994, as required by the August 24, 1995 Directed Plan
of Correction. HCFA Ex. 6.
The August 24, 1995 Directed Plan of Correction required
that all deficiencies be corrected by September 29, 1995.
HCFA Ex. 5.
37. The State agency found that numerous standard-level
deficiencies identified during the prior surveys remained
uncorrected, contrary to the terms of the August 24, 1995
Directed Plan of Correction. HFCA Ex. 14, at 5-6, para.
17.
38. As a result of the second revisit survey of October
26, 1995, HCFA now alleges that eight standard-level
deficiencies remained uncorrected over 12 months
following the August 4, 1994 survey. HCFA Ex. 7, 14, 15,
16, 17.
39. The 13 remaining deficiencies identified during the
October 26, 1995 revisit survey, were later determined to
be corrected, because HCFA subsequently verified that the
laboratory was enrolled in a proficiency testing program
at the time of the survey. HCFA Ex. 15, at 5-6, para.
10; HCFA Br. 2, at 13.
40. Petitioner failed to comply with 42 C.F.R. §
493.1103(a), which governs specimen submission and
handling, by the second revisit survey on October 26,
1995.
41. Petitioner failed to comply with 42 C.F.R. §
493.1407(e)(5), which governs the responsibilities of the
laboratory director to ensure that quality control and
assurance programs are established and maintained to
assure the quality of laboratory services provided, and
to identify failures in quality as they occur, by the
second revisit survey on October 26, 1995.
42. Petitioner failed to comply with 42 C.F.R. §
493.1711, which governs quality assurance for moderate or
high complexity testing for quality assurance and
requires the laboratory to have a mechanism to identify
and evaluate patient test results that appear
inconsistent with relevant criteria, such as the
relationship with other test parameters, when available
within the laboratory, by the second revisit survey on
October 26, 1995.
43. At the time of the revisit survey of October 26,
1995, eight standard-level deficiencies remained
uncorrected over 12 months following the survey of August
4, 1994, as cited under D tags 3013, 6022, 6094, 7009,
7010, 7054, 7057, 7066. HCFA Ex. 7, 14, 15, 16, 17.
44. At the time of the revisit survey of October 26,
1995, the following eight standard-level deficiencies
remained uncorrected in violation of the Directed Plan of
Correction requiring the correction of all deficiencies
(whether condition-level or standard-level) by September
29, 1995:
a. D tag 3013 concerning specimen submission,
transportation and handling (42 C.F.R. §§
493.1103(a) and 493.1445(e)(5));
b. D tag 6022 concerning the responsibilities of
the laboratory director (42 C.F.R. §
493.1407(e)(5));
c. D tag 6094 also concerning the responsibilities
of the laboratory director (42 C.F.R. §
493.1445(e)(5));
d. D tag 7009 concerning patient test management
assessment (42 C.F.R. §§ 493.1103(a),
493.1445(e)(5), and 493.1703);
e. D tag 7010 also concerning patient test
management assessment (42 C.F.R. §§ 493.1103(a) and
493.1703);
f. D tag 7054 concerning patient information and
test results (42 C.F.R. §§ 493.1445(e)(5) and
493.1711(e));
g. D tag 7057 concerning communications (42 C.F.R.
§§ 493.1445(e)(5) and 493.1715);
h. D tag 7066 concerning quality assurance records
(42 C.F.R. §§ 493.1407(e)(5), 493.1445 (e)(5), and
493.1721);
HCFA Ex. 7, 14-17.
45. HCFA prevails, since it met its obligation to
provide notice of its determinations regarding the
October 26, 1995 survey, and since Petitioner failed to
prove by a preponderance of the evidence that it had
corrected all the deficiencies identified during the
August 4, 1994 survey. The period of time between these
two surveys is over 12 months. HCFA Ex. 7, 17; 42 C.F.R.
§§ 493.1816(b), 493.1820, 493.1828(c)(2).
46. HCFA prevails, since it met its obligation to
provide notice of its determinations, and since
Petitioner failed to prove by a preponderance of the
evidence that, by September 29, 1995, no condition or
standard-level deficiencies remained uncorrected, a
violation of the terms of the Directed Plan of
Correction.
47. As a matter of law, HCFA prevails on its imposition
of the sanctions revoking Petitioner's CLIA certificate
and canceling all Medicare payments to Petitioner. FFCL
1-46; 42 C.F.R. §§ 493.1808(a), 493.1816(b), 493.1832(c),
493.1840(a)(7), 493.1842(a).
DISCUSSION
The evidence and argument presented by Petitioner do not
persuade me that, based on the results of the October 26,
1995 survey, Petitioner has proved that all the
deficiencies identified by HCFA had been corrected.
Petitioner, not HFCA, bears the ultimate burden of
persuasion. Petitioner has not met this burden.
Specifically, Petitioner failed to comply with the
standard governing Specimen Submission and Handling (42
C.F.R. § 493.1103(a)). This resulted in a deficiency
cited as D tag 3013. This standard requires that a
laboratory must have available and follow written
policies and procedures for conditions for specimen
transportation. Such policies and procedures must assure
positive identification and optimum integrity of the
patient specimens from the time the specimen(s) are
collected until testing has been completed and the
results reported. HCFA determined that Petitioner failed
to comply with this standard, based upon interviews
conducted by the State agency with Petitioner's staff and
upon the review of available procedure manuals. This
failure was corroborated by Petitioner's general
supervisor. HCFA Ex. 7, at 6; HCFA Ex. 17, at 1, para.
3. Petitioner attempts to refute this evidence by
referring to P. Ex. 36, a document entitled "Quality
Assurance Program-Phlebotomy-Specimen Collecting
Procedure for Williams Bio Medical Laboratory." However,
Petitioner cannot rely on this exhibit to show its
compliance with the regulation, since P. Ex. 36 pertains
only to specimen collection, and not to specimen
transportation. In addition, P. Ex. 36 has no date or
signature on it to show that it was in place at WBML at
the time of the October 26, 1995 revisit survey.
Obviously, the best evidence to demonstrate that the
procedures were in place would be documentation showing
they were in use. Petitioner, who would be in the best
position to have such documentation, assuming such
documentation was in use, did not offer such proof.
Consequently, I must conclude that no such documents
exist and that the procedures were never in place.
Petitioner claims also that this standard does not apply
to it, since it does not transport specimens and all
testing is done in house. However, 42 C.F.R. §
493.1103(a) is intended to "assure positive
identification and optimum integrity of the patient
specimens from the time the specimen(s) are collected
until the testing has been completed and the results
reported." Clearly, section 493.1103(a) is referring to
"in house" specimen transportation. Therefore, this
regulation does apply to WBML, and WBML has failed to
comply with it.
Petitioner failed also to comply with 42 C.F.R. §
493.1407(e)(5), which requires that a laboratory director
of moderate complexity testing must 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. HCFA found deficiencies (D tags 6022 and
7066) under this standard based, in part, on the State
agency's interviews with staff and review of quality
control/quality assurance records, and based, in part, on
a lack of documentation showing that quality assurance
activities, including the identification of problems and
corrective actions taken, had, in fact, occurred. HFCA
Ex. 7 at 12-13 (D tag 6022) and 28-29 (D tag 7066); HCFA
Ex. 15, 17. Petitioner relies on its P. Ex. 39-43 to
show that it had quality control and assurance programs
in place at the time of the October 26, 1995 survey.
However, these exhibits consist of forms and checklists
which are blank. There are no dates, signatures, or any
other information to show that the required quality
control/quality assurance programs were in place at the
time of the survey. HFCA Ex. 16. The evidence offered
by Petitioner thus does not prove that such a program was
in place at the time of the October 26, 1995 survey.
The regulation at 42 C.F.R. § 493.1711(e) requires that
for internal quality assurance, a laboratory must have a
mechanism to identify and evaluate patient test results
that appear inconsistent with relevant criteria, such as
its relationship with other test parameters when
available. HCFA determined that, at the time of the
surveys, WBML did not have such a mechanism. HCFA Ex. 7,
at 24-25; HCFA Ex. 17. This resulted in a deficiency
cited as D tag 7054.
Petitioner attempts to refute this by relying on P. Ex.
45, 46, 49, and 51. P. Ex. 45 is a form on which tests
are ordered. There is no place on this form to record
results. P. Ex. 46 appears to be a form on which results
are reported. This form does provide a normal range for
each test, but it does not provide a mechanism to
identify and evaluate patient test results that are
inconsistent with relevant criteria such as patient age,
sex, diagnosis, distribution of test results, or
relationship with other test parameters, when available.
Therefore, these two exhibits do not demonstrate
compliance with this regulation.
P. Ex. 49 is a communication log between the laboratory
director or clinical consultant and clients or
facilities. This form shows blanks to be filled in with
the date, time, who was spoken to, patient name, subject
of communication, and resolution. There are also blanks
to be filled in to identify the individual initiating the
communication and the individual who reviews the
completed form. A note at the bottom of the form says
that the form should be turned in to the Quality
Assurance Committee. However, this form does not
indicate how or when it should be used. There is no
indication what the triggering circumstance would be to
initiate communication. Further, the form does not
provide a mechanism to identify and evaluate patient test
results that are inconsistent with relevant criteria.
P. Ex. 51 is part of a document entitled "Quality
Assurance" (P. Ex. 50), and it states:
(f) Standard. The laboratory must have a mechanism
to identify and evaluate patient test results that appear
inconsistent with clinically relevant criteria such as--
1) Patient's age;
2) Sex;
3) Diagnosis of pertinent clinical data;
4) Relationship with other test parameters.
This document simply repeats the wording of the
regulation. It states that the laboratory "must have" a
mechanism to identify and evaluate patient test results
that appear to be inconsistent with relevant criteria.
It does not state that the laboratory has identified such
a mechanism, nor does it show that such a mechanism was
being used by WBML.
P. Ex. 49 and 51 contain no dates, signatures, or other
identifying information indicting that any of the
procedures reflected there had been adopted by the
laboratory, or were in place, at the time of the October
26, 1995 survey. Nor had these exhibits been provided to
HCFA previously, either in response to the deficiencies
identified during any of the three surveys or at the time
Petitioner requested a hearing. HFCA Ex. 16. Further,
even assuming that these documents were present in the
laboratory at the time of the October 26, 1995 survey,
they fail to identify any mechanism in place at that time
to assure that the regulation was being carried out.
The remaining uncorrected deficiencies, for which
Petitioner has submitted no acceptable documentation to
refute the evidence introduced by HCFA, include:
deficiencies based on the failure of the laboratory
director to establish and maintain quality control and
quality assurance programs in order to assure the quality
of laboratory services provided and to identify failures
as they occur (42 C.F.R. § 493.1445(e)(5), D tags 6094,
7009, 3013, 7054, 7057, 7066); deficiencies based on the
failure to have an ongoing mechanism for monitoring and
evaluating the systems required under subpart J of 42
C.F.R. Part 493, Patient Test Management (42 C.F.R. §§
493.1103 and 1703, D tags 7009, 7010); a deficiency based
on a failure to have in place a system to document
problems that occur as a result of breakdowns in
communication between the laboratory and the authorized
individual who orders or receives the results of test
procedures or examinations (42 C.F.R. § 493.1715, D tag
7057); and a deficiency based on the failure to maintain
documentation of all quality assurance activities,
including problems identified and corrective actions
taken (42 C.F.R. § 493.1721, D tag 7066). HCFA
determined that these deficiencies existed based on
interviews conducted by the State agency with WBML's
staff, including WBML's general supervisor, a review of
the quality assurance records, and the finding of a lack
of documentation where required. HCFA Ex. 7, 15, 17. In
addition, HCFA provided declarations from the surveyor,
Franklin R. Barnes, and from a laboratory consultant
employed by HCFA, Esther-Marie Carmichael. HCFA Ex. 14-
17. These declarations support the existence of the
deficiencies at WBML.
Petitioner relies on its exhibits to show that it had
overcome these remaining deficiencies prior to the
revisit survey of October 26, 1995 (P. Ex. 39-43 and 49).
These exhibits consist of forms and checklists that are
blank. None of these exhibits show that Petitioner had
the required quality assurance or other systems in place
at the time of the October 26, 1995 survey. This showing
does not meet the burden of persuasion required by
Hillman.
CONCLUSION
Petitioner had deficiencies which remained uncorrected
over 12 months following the August 4, 1994 survey.
Further, Petitioner failed to comply with the terms of
the August 24, 1995 Directed Plan of Correction requiring
that all deficiencies, whether condition-level or
standard-level, be corrected by September 29, 1995.
HCFA may impose principal sanctions where a laboratory
fails to correct deficiencies within 12 months of the day
of the inspection or where it fails to comply with an
alternative sanction, such as a Directed Plan of
Correction. 42 C.F.R. §§ 493.1816(b), 493.1840(a)(7).
Thus, as a matter of law, HCFA prevails on its imposition
of sanctions revoking Petitioner's CLIA certificate and
canceling all Medicare payments to Petitioner. 42 C.F.R.
§§ 493.1808(a), 493.1816(b), 493.1832(c), 493.1840(a)(7),
493.1842(a).
________________________
Edward D. Steinman
Administrative Law Judge
* * * Footnotes * * *
1. Petitioner's CLIA certificate was
subsequently revoked on separate and independent grounds,
effective March 21, 1996, as a result of Petitioner's
failure to pay required CLIA fees. Petitioner
acknowledges that it did not pay the required fees and
that it did not appeal its revocation based on this
failure to pay required CLIA fees. Unappealed
determinations are binding and cannot be set aside in
this proceeding. Administrative Law Judge Mimi Hwang
Leahy's August 20, 1996 Ruling in this case (ALJ Ruling),
Findings of Fact and Conclusions of Law (FFCL) 17-20.
2. Petitioner's exhibits 1-6, 8-25, 25A, 26-28,
and 18 attachments (P. Att. 1-18) were accepted into the
record by Judge Leahy. Subsequently, Petitioner
submitted a copy of its brief in opposition to HCFA's
motion for summary judgment, which was labeled exhibit 1
(and which was previously submitted to Judge Leahy); a
declaration ("Reference to Franklin R. Barnes
Declaration"), which was labeled exhibit 2 and which I
have remarked as P. Ex. 29; and a revised response to the
October 26, 1995 revisit survey, which was labeled
exhibit 3 and which I have remarked as P. Ex. 30. At the
same time, Petitioner submitted 23 attachments. I am
discarding part of the second set of attachments,
attachments 1-18, because these attachments are
duplicates of P. Att. 1-18 which were accepted into the
record by Judge Leahy. Petitioner submitted five new
attachments (P. Att. 19-23). I am re-marking P. Att. 1-
23 as P. Ex. 31-53, to conform with Civil Remedies
Division practice. I am discarding the brief Petitioner
submitted as exhibit 1, as it is of record already.
HCFA had previously submitted HCFA exhibits 1-15 in
support of its motion for summary judgment. Judge Leahy
accepted those exhibits into the record. Following Judge
Leahy's ruling, HCFA submitted a brief in support of the
revocation of Petitioner's CLIA certificate, and 17
exhibits (HCFA Ex. 1-8 and 10-18). I am discarding part
of the second set of exhibits, HCFA Ex. 1-8 and 10-15,
because these exhibits are duplicates of exhibits already
in the record. HCFA submitted three new exhibits (HCFA
Ex. 16-18). In order to decide the case before me, I am
receiving into the record those exhibits that were not
previously admitted as exhibits: P. Ex. 29-53 and HCFA
Ex. 16-18.
The parties have submitted several briefs, some referred
to above. Those submitted to Judge Leahy include the
brief accompanying HCFA's motion for summary judgment
(HCFA Br.), Petitioner's brief in response to this motion
(P. Br.), and HCFA's response brief (HCFA Resp. Br.).
Before me, HCFA submitted a brief in support of the
revocation of Petitioner's CLIA certificate (HCFA Br. 2)
and Petitioner submitted a summary letter in response (P.
Let.).
3. Petitioner sought to raise other issues in
its brief. Specifically, Petitioner claimed that the
deficiencies cited in the November 2, 1994 survey were
incorrect. Petitioner alleges that it did not receive
the letter dated March 30, 1995, from the California
Department of Health Services (State agency) which
notified WBML that, as a result of the November 2, 1994
survey, four condition-level deficiencies were still out
of compliance. This letter further stated that the State
agency would recommend to HCFA that alternative sanctions
be imposed. However, even if all Petitioner's claims are
true, as Judge Leahy found, Petitioner still received
HCFA's notice imposing alternative sanctions, and was
aware that all deficiencies had to be corrected by
September 29, 1995. ALJ Ruling, FFCL 6. Petitioner did
not request a hearing to contest the results of the
August and November 1994 surveys, or to contest the
imposition of alternative sanctions pursuant to those
surveys. ALJ Ruling, FFCL 7. Judge Leahy ruled that
Petitioner may not dispute HCFA's findings of
deficiencies from the survey of November 2, 1994, because
unappealed determinations are binding on Petitioner and
cannot be set aside in this proceeding. ALJ Ruling, FFCL
7, 20.
Petitioner also submitted a declaration with reference to
the declaration of Franklin R. Barnes, the State agency
surveyor (P. Ex. 29). This declaration relates to
procedural points that are not relevant to the issues
before me. In her August 20, 1996 Ruling, Judge Leahy
ruled that the issues raised by WBML, other than the
issues referred to above, were beyond the scope of
Petitioner's remaining hearing rights, since WBML had
failed to appeal any of HCFA's prior sanctions.