Thyroid Specialty Laboratory, DAB CR501 (1997)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: Thyroid Specialty Laboratory, Petitioner,
- v. -
Health Care Financing Administration.

Date: October 21, 1997

Docket No. C-96-336
Decision No. CR501

DECISION

By this decision, I order the revocation of Thyroid Specialty
Laboratory's (Petitioner) certification under the Clinical
Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. §
263a, for a period of one year, as proposed by the Health Care
Financing Administration (HCFA). 1/ By operation of law, this
decision also has the effect of affirming HCFA's determination to
cancel Medicare payments to Petitioner for all tests. 42 C.F.R.
§§ 493.1808(a), 493.1842(a) and (b).

As relevant to the facts of this case, CLIA specifies as follows:

Any laboratory that the Secretary [of Health and Human
Services] 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).

The regulations promulgated by the Secretary to implement the
foregoing statutory mandate state in relevant part:

The laboratory must not send PT [proficiency test]
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.

42 C.F.R. § 493.801(b)(4). See also 42 C.F.R. § 493.1840(b).

In addition, the regulations require HCFA to impose the sanction
of canceling a laboratory's approval to receive Medicare payments
whenever HCFA takes action to revoke the laboratory's CLIA
certificate. 42 C.F.R. § 493.1842(a). HCFA must cancel Medicare
payments concurrently with its determination to revoke the
laboratory's CLIA certificate. 42 C.F.R. § 493.1808(a).
Notwithstanding the contrary provisions applicable to HCFA's
decisions to revoke a CLIA certificate (42 C.F.R. § 493.1840(e)),
HCFA may effectuate the cancellation of Medicare payments in
advance of the laboratory's exercising its hearing rights. 42
C.F.R. § 493.1842(b).

By letter dated April 30, 1996, HCFA provided notice that it
intended to revoke Petitioner's CLIA certificate for one year due
to the unlawful referral of certain proficiency testing samples.
In addition, HCFA stated that, Petitioner's approval to receive
Medicare payments was being canceled effective May 15, 1996.
Petitioner filed a timely request for hearing. I held an in-
person evidentiary hearing 2/ in St. Louis, Missouri, on
February 13, 1997. Both parties have filed post-hearing briefs
3/ summarizing their legal theories and their view of the
evidence of record.

I. ANALYSIS OF FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Uncontested Background Facts and Law

Petitioner does not disagree with HCFA's assertion that
Petitioner received its CLIA certification on August 31, 1994,
pursuant to an application submitted on September 1, 1992. 4/
HCFA Br. at 2. Nor does Petitioner dispute HCFA's description of
Petitioner as a small reference laboratory 5/ which conducted
tests of moderate complexity during the relevant periods of time.
Id. Petitioner acknowledges that, in order to maintain its CLIA
certificate, it was required to analyze proficiency testing
samples and report the results to a testing service for grading
each year. P. Br. at 6.

As explained through unrefuted witness testimony, HCFA, an agency
of the Department of Health and Human Services (HHS), approves
certain companies to administer proficiency tests under CLIA.
Three times each year, these approved testing companies send out
proficiency test samples to be analyzed by each laboratory. (A
set of five testing samples are sent out to each laboratory for
each test period.) The laboratories then perform the tests and
submit their results on forms provided by the testing services.
The testing services grade the results and report them to HCFA.
To remain certified under CLIA, a laboratory must maintain a
minimum score of 80% (i.e., provide correct answers for four out
of the five test samples) for each of the three annual
proficiency test "events." Tr. 16-17.

Proficiency testing samples are sent to laboratories for testing
without any indication of their potential results. Because HCFA
inspects CLIA certified laboratories only once every two years,
HCFA uses the outcomes of the proficiency tests to monitor on a
more regular basis the quality of a laboratory's work, as if the
work were being performed on its patient specimens. Therefore,
it is necessary for a laboratory to analyze proficiency test
samples on its own, in the same manner as it would analyze its
patient specimens. Tr. 17-19.

The above-described testimony introduced by HCFA is consistent
with the regulations, which specify that, as a condition of
participation under CLIA, a laboratory must enroll in an approved
proficiency testing program and must conduct the proficiency
tests in the same manner it tests patient specimens. 42 C.F.R. §
493.801. Further, each laboratory performing tests of moderate
or high complexity must successfully participate in a HCFA-
approved proficiency test program each year, or be subject to
sanctions. 42 C.F.R. § 493.803.

The regulations emphasize that in testing proficiency test
samples, a laboratory must "examine or test, as applicable, the
proficiency testing samples that it receives from the proficiency
testing program in the same manner as it tests patient
specimens." 42 C.F.R. § 493.801(b). The proficiency test
samples "must be examined or tested with the laboratory's regular
patient workload by personnel who routinely perform the testing
in the laboratory, using the laboratory's routine methods" (42
C.F.R. § 493.801(b)(1)), and "[t]he laboratory must test samples
the same number of times it routinely tests patient samples." 42
C.F.R. § 493.801(b)(2). Under CLIA requirements, the laboratory
director and the analyst must also sign an attestation statement
provided by the proficiency testing program to document that the
proficiency test samples were tested in the same manner as
patient specimens. 42 C.F.R. § 493.801(b)(5).

Accordingly, I adopt the following as uncontroverted background
findings of fact and conclusions of law:

1. Pursuant to an application submitted on September 1,
1992, Petitioner was certified as being in compliance with
CLIA requirements on August 31, 1994.

2. During the period in controversy, Petitioner was a small
reference laboratory conducting moderate complexity tests
under its CLIA certificate.

3. As a CLIA certified laboratory during the period in
controversy, Petitioner was required to participate
successfully in the performance of proficiency tests under a
testing program which was approved by HHS and which met the
requirements established by regulation. 42 C.F.R. § 803.

4. Proficiency tests are designed to determine a
laboratory's accuracy in performing tests for its patients.
Tr. 19.

5. While enrolled in a proficiency testing program,
Petitioner, like other CLIA certified laboratories, was sent
proficiency test samples for analysis approximately three
(3) times each year. Tr. 19.

6. During the period in controversy, Petitioner, like all
other laboratories enrolled in HHS-approved proficiency
testing programs, was required to examine or test
proficiency samples in the same manner it tested patients'
specimens. 42 C.F.R. § 493.801.

7. During the period in controversy, Petitioner, like all
other laboratories enrolled in HHS-approved proficiency
testing programs, was required to have its laboratory
director and analyst sign an attestation statement to
certify that the proficiency samples were tested by the
laboratory in the same manner as it tested its patient
specimens. 42 C.F.R. § 493.801 (b)(5).

B. Proof of the Violations Committed by Petitioner

1. The Statutory Elements

I adopt the legal analysis of Administrative Law Judge Steven
Kessel and Administrative Law Judge Jill Clifton in concluding,
as they have, that a violation under 42 U.S.C. § 263a(i)(4) can
be established on proof that:

a. a proficiency test sample has been referred for
analysis by one laboratory to another laboratory, and

b. the referring laboratory had knowledge that the
sample it was referring was a proficiency test sample.

Long Medical Laboratory, DAB CR334 (1994) (Judge Kessel); Primary
Care Medical Group, DAB CR439 (1996) (Judge Clifton). I agree
also with their conclusion that ordinary, dictionary meanings
must be given to the words "intentional" or "intentionally," as
used in 42 U.S.C. § 263a(i)(4) and the Secretary's implementing
regulations. Therefore, I will also construe "intentional" or
"intentionally" in this case to mean that the proscribed actions
were taken deliberately, pursuant to a determination to act in a
certain way, and without regard to the nature of the motive for
the actions. I, too, am of the view that the knowledge element
of 42 U.S.C. § 263a(i)(4) and its corresponding regulations can
be satisfied by showing that the referring laboratory knew the
sample it was referring was a proficiency test sample, not a
patient specimen. Primary Care Medical Group, DAB CR439 at 17
(quoting Long Medical Laboratory, DAB CR334).

Given the above-specified elements of proof, it is not necessary
for HCFA to establish also that the referrals resulted in actual,
objectively verifiable cheating by the referring laboratory by
the use of methods such as the copying of the other laboratory's
results, the double-checking or comparing of its own results
against those of the other laboratory, or the alteration of its
results based on the other laboratory's analysis. 6/ Nor is it
necessary in order for HCFA to establish a violation, that HCFA
prove that the laboratory had specifically intended to violate
CLIA through the referral of proficiency test samples.

2. Evidence that Petitioner's Proficiency Testing
Samples were Referred to Another Laboratory for
Analysis

In this case, there is no dispute that referrals of proficiency
tests samples took place. Petitioner admits that, during two
proficiency testing periods in 1995, a total of five proficiency
test samples were sent to Corning Laboratory. P. Br. at 16.
During the June 1995 testing event, two of Petitioner's five
proficiency samples (test samples C-3 and C-5) were referred to
Corning Laboratory. Tr. 136; P. Ex. 32. Then, for the October
1995 testing event, three of Petitioner's five proficiency
samples (test samples C-1, C-2, and C-5) were also referred to
Corning Laboratory. Id. HCFA has not alleged violations with
respect to the referrals of other proficiency test samples or for
other testing periods preceding the April 1996 survey. 7/

The referrals of the five proficiency test samples were made on
the same days that Petitioner performed its own tests on the same
samples. HCFA Ex. 3; P. Ex. 32 (summary of Petitioner's other
exhibits). June 15, 1995, is the date on which Petitioner
performed its own tests for the June testing cycle, and the date
on which two of those proficiency testing samples were referred
to Corning Laboratory. October 25, 1995, is the date on which
Petitioner performed its own tests for the October testing cycle,
and the date on which three of those proficiency testing samples
were referred to Corning Laboratory.

On the issue of whether the referrals herein were made for the
purpose of having another laboratory analyze the test samples,
8/ HCFA's witness opined that there exists no other reason to
make a referral of proficiency test samples to another
laboratory. Tr. 60 - 61. In fact, the requisition forms in
evidence confirm that Petitioner's proficiency test samples were
repeatedly sent to Corning Laboratory for the specific purpose of
having that laboratory perform the requested analysis. For the
two proficiency test samples sent to Corning Laboratory during
the June 1995 testing event, Petitioner's agent or employee
completed two separate requisition forms (one for sample C-3 and
one for sample C-5) for Corning Laboratory to perform the
analysis of those samples. P. Ex. 3, 4. Three additional
requisition forms specifying the analysis to be done by Corning
Laboratory were filled out by Petitioner's agent or employee
during October of 1995, when three more proficiency test samples
from that testing event (samples C-1, C-2, and C-5) were sent to
Corning Laboratory. P. Ex. 22-24.

The parties' evidence on Corning Laboratory's responses to those
requisition forms further establish that the proficiency testing
samples were referred for analysis. Corning Laboratory issued
separate reports for each of the five proficiency samples it
tested. Tr. 45; P. Ex. 32. At approximately 3:00 p.m. on June
16, 1995, Corning Laboratory delivered its reports on the two
June proficiency samples to Petitioner. Tr. 52, 62. At
approximately 3:00 p.m. on October 26, 1995, Corning Laboratory
delivered its reports on the three October proficiency samples to
Petitioner. Tr. 52, 57-59. 9/

3. Evidence on the Identity and Authority of the
Individual who is Alleged by Petitioner to have
Referred its Proficiency Testing Samples to Another
Laboratory

The parties agree that on June 16, 1995 (the same day on which
Corning Laboratory delivered its results to Petitioner),
Petitioner signed the form attesting to its results for the June
1995 proficiency tests. Tr. 56. The parties agree also that on
October 27, 1995 (one day after the delivery of Corning
Laboratory's test results), Petitioner signed the form attesting
to its results for the October 1995 proficiency tests. Id. The
signed attestation form contained the following statement:

The undersigned analyst attests that the samples were
tested in the same manner as patient samples.

HCFA Ex. 3 at 32.

The attestation forms were signed by Petitioners' Laboratory
Director, who did not perform any of the proficiency tests in
1995 and who claims to have had no knowledge of the referrals to
Corning Laboratory until well after their occurrence. Id; Tr.
160, 198, 221. Petitioner contends that its Laboratory Director
was not aware of the referrals until the surveyor brought the
matter to his attention during the survey conducted on April 9,
1996. Tr. 136. The contention that the Laboratory Director
lacked contemporaneous knowledge of the referrals raises the
question of who had made the referrals, and whether that person
had acted with the authority to bind Petitioner.

On these two issues, the relevant evidence shows that during
1995, only three people were employed by Petitioner: Marilyn
Banes, Petitioner's Office Manager; Dr. Bahartur Premachandra,
Ph.D., Petitioner's founder, sole proprietor, and Laboratory
Director; and Stacey Abernathy, a part-time employee who
performed all of Petitioner's laboratory tests. Tr. 43, 145 -
47, 169, 179, 183. Petitioner referred to Ms. Abernathy as its
"Laboratory Technician." Tr. 183. However, it stipulated that
there exists no licensure requirements for the work performed by
Ms. Abernathy. Under CLIA, individuals such as Ms. Abernathy are
called "Testing Personnel." Tr. 185. Like others having the
designation of "Testing Personnel," Ms. Abernathy was given some
on-the-job training in order to perform laboratory tests and
analyses for her employer. 10/ Tr. 183, 190. She was given
the freedom to set her own hours and to do however much work was
needed during whatever periods were convenient to her. Tr. 148.

Dr. Premachandra, Petitioner's founder, sole owner, and
Laboratory Director, testified that it was Stacey Abernathy,
Petitioner's Testing Personnel in 1995, who filled out the
requisition forms and referred the five proficiency test samples
to Corning Laboratory for analysis. Tr. 206. Neither party
called her to testify at the hearing, even though it is likely
that her whereabouts could have been ascertained despite her
departure from Petitioner's employment. (For example, she has
kept in touch with Petitioner's Office Manager, Ms. Banes,
through the use of Christmas cards and by submitting Ms. Banes'
name as a job reference. Tr. 147-48.) Both of Petitioner's
remaining employees in 1995, Ms. Banes and Dr. Premachandra, have
denied making the referrals in dispute. HCFA has not introduced
evidence to show that Ms. Banes or Dr. Premachandra made those
referrals. Therefore, I am constrained to proceed by accepting
as true that Petitioner's only other employee in 1995, its
Testing Personnel, took the actions attributed to her by
Petitioner.

Petitioner argues that the Testing Personnel inadvertently
referred the proficiency test samples under a random quality
control procedure in place for patient samples. P. Br. at 24-25.
As relevant to the issue of whether the Testing Personnel had
the authority to act for Petitioner during the relevant periods
of time, Dr. Premachandra testified that, when discussing the
random quality control procedure, he had given the Testing
Personnel the discretion to send to another laboratory "whatever
they [sic] want to send on a random basis." Tr. 189. He had
provided the Testing Personnel with no guidelines on the concept
of "random." Tr. 189-90. He testified that he did not check on
the referrals that were made "randomly" by the Testing Personnel
at whatever intervals she chose; he did not set any limits or
goals on the number of referrals to be made "randomly;" nor did
he establish any intervals or quantities for these "random"
referrals he authorized. Id.; Tr. 219.

Dr. Premachandra testified also that he instructed the Testing
Personnel to "handle" all samples in the same manner, including
referring them to another laboratory under the so-called "random"
referral procedures he said he had created. 11/ Tr. 191, 194,
199-200. Even though he alleged that he did not intend for his
instructions to mean that the Testing Personnel should refer any
proficiency test samples to another laboratory under the "random"
referral process (id.), I do not find his allegation credible or
material. 12/ By his own admission, the Testing Personnel
received from him the authority to refer "whatever they [sic]
want to send on a random basis." Tr. 189. Additionally, Dr.
Premachandra admitted to having never issued any instructions
until after the April 1996 survey to preclude the referrals of
proficiency test samples to another laboratory. Tr. 200, 217;
See Tr. 157. 13/

The testimony given by Marilyn Banes, Petitioner's Office
Manager, also proves that the Testing Personnel had authority and
discretion to make referrals of proficiency test samples on
behalf of Petitioner. She testified that she had recorded the
proficiency test results on the reports returned to the testing
service. Tr. 151. She testified that, at the time she was
recording the proficiency test results from Petitioner's own
data, she saw the requisition forms to Corning Laboratory and
became aware that certain proficiency samples had been referred
out. Tr. 156. (Her responsibilities included book-keeping,
maintaining Petitioner's accounts receivable, and issuing
disbursements for Petitioner. Tr. 146.) She knew that the
requisitions to Corning Laboratory were for the testing of
proficiency test samples, and not patient specimens, because the
requisition forms contained the proficiency test numbers instead
of patient names. Tr. 165. She even saw the results from
Corning, though she denies having studied them, understood them,
or given them any effect. Tr. 154, 164. She testified that she
had no knowledge of, and no interest in, why the proficiency test
samples were referred to Corning Laboratory. Tr. 155. According
to the Office Manager, her awareness of these referrals, and
their results from Corning Laboratory, did not cause her to
discuss the matter with Dr. Premachandra at or around the time
she was completing the proficiency test reports. Tr. 155.
Instead, she merely placed the requisition forms and reports from
Corning Laboratory in a file denoted as "Proficiency Testing."
Tr. 165.

The foregoing evidence shows that Ms. Banes, in her capacity as
Petitioner's Office Manager, knew of the referrals at issue, as
well as the outcomes of those referrals, at about the time those
events occurred. The evidence shows also that she recognized the
Testing Personnel's authority to make the referrals of
proficiency testing samples, in that she did not react as if
anything was amiss when she saw the requisition forms and Corning
Laboratory's reports. For example, as Petitioner's Office
Manager, she did nothing to disavow those referrals for
Petitioner. Nor did she see a need to bring those referrals of
the proficiency testing samples to the Laboratory Director's
attention. In sum, all of the evidence points to the conclusion
that, even assuming that the Testing Personnel had done all that
Ms. Banes and Dr. Premanchandra had attributed to her, the
Testing Personnel had been given the authority in 1995 to act for
Petitioner, at her own discretion, in referring to another
laboratory for analysis whatever she wished (patient specimens or
proficiency test samples), in whatever quantity she wished, and
at whatever interval she wished. Therefore, the actions
attributed to the Testing Personnel by Dr. Premachandra and Ms.
Banes are binding on Petitioner, as are the legal consequences of
those actions.

4. Evidence of Petitioner's Knowledge that the
Referrals were of Proficiency Test Samples, not Patient
Specimens

With respect to the remaining issue of whether the referrals were
made knowingly or intentionally, the evidence shows that
Petitioner, through its Testing Personnel, had knowledge that the
referrals were of proficiency test samples, and not of patient
specimens. HCFA's witness testified that proficiency test
samples were recognizable as such and had an appearance that was
distinct from patient specimens. Tr. 20. Dr. Premachandra,
Petitioner's Laboratory Director, agreed. Tr. 208, 217, 218.
Dr. Premachandra noted that Petitioner's patient specimens were
kept in tubes, while proficiency test samples came to Petitioner
in vials. Tr. 208. Dr. Premachandra testified also that the
colors of the tubes (for patient samples) and vials (for
proficiency test samples) were different. Id.

According to Dr. Premachandra's description of the laboratory's
practices in 1995, Petitioner's Office Manager would have
received a box of the proficiency test samples from a delivery
man and then placed the entire box -- unopened -- in the
laboratory's refrigerator. Tr. 220-21. The Testing Personnel
would later open the box and remove the proficiency testing
samples in order to perform the necessary analysis. Tr. 221.
From the foregoing activities, the Testing Personnel would have
known which samples were part of the proficiency tests. Tr. 221.

Proof that the referrals were made intentionally consists also of
the evidence showing that, in the course of making the referrals
at issue, the Laboratory Technician had ample and repeated
additional opportunities to realize that proficiency test samples
were being sent to Corning Laboratory. I have noted the parties'
apparent agreement that the referrals of proficiency test samples
were made on June 15, 1995 and October 25, 1995 -- the same days
on which the Testing Personnel also performed the proficiency
tests in-house for Petitioner. P. Ex. 32. Since on the same
days, the same person used the same proficiency testing samples
to perform the tests in-house as well as to make the referrals,
she would have realized that she was not referring patient
specimens in those instances.

In addition, as described by the Laboratory Director,
Petitioner's procedure for sending samples to Corning Laboratory
entailed placing each sample and corresponding requisition form
in a separate plastic bag for delivery to Corning Laboratory.
Tr. 210. 14/ Therefore, in order to refer samples C-3 and C-5
of the June 1995 testing period, the Testing Personnel would have
had to have generated two separate requisition forms, placed the
two proficiency test samples in two separate bags, matched the
requisition forms with their corresponding vials, and placed each
requisition form in the correct bag. The same steps would need
to have been taken by the Testing Personnel to effectuate the
referrals of proficiency samples C-1, C-2, and C-5 of the October
1995 testing period. Therefore, even if the Testing Personnel
had failed to notice that the vials she took from the
laboratory's refrigerator were sent by the proficiency testing
service and did not have the same appearance or container as
Petitioner's patient specimens, her taking of this many steps to
effectuate each of the five referrals would have caused her to
realize that she was sending proficiency test samples to Corning
Laboratory for analysis.

It is also significant that Petitioner performed only about 2,000
tests a year. Tr. 90. Assuming 150 work days per year, since
Petitioner's Testing Personnel worked part-time, Petitioner only
averaged 13 samples a day. Such a low volume of samples, along
with the difference in appearance of the proficiency samples,
would have made it obvious that the Testing Personnel should have
been aware that she was dealing with proficiency samples.

HCFA's witness noted also that the manner in which the
requisition forms were filled out provides further proof that the
referrals were made intentionally and with knowledge that
proficiency test samples were being sent to another laboratory
for analysis. The requisition forms used by Petitioner in this
case contained several questions which should be answered when
patient specimens are being referred for testing by another
laboratory. Tr. 32. The requisition forms asked for information
such as the patient's name, sex, age, insurance company, date of
birth, physician's name, and the date on which the specimen was
collected. Id.; e.g., HCFA Ex. 3 at 12. When the proficiency
test samples were being referred to Corning Laboratory using
these requisition forms, the answers to these patient-specific
questions were left blank. Id. The requisition forms used to
transmit the proficiency test samples to Corning show only the
identifier of the test samples being sent, with the date of the
referral provided as the date on which the specimen was allegedly
collected. Id. Thus, this evidence shows also that the
Laboratory Technician knew she was referring proficiency test
samples.

By virtue of her authority to make referrals at her discretion on
behalf of Petitioner, the Testing Personnel's knowledge that the
samples she referred were proficiency test samples (and not
patient specimens) must also be imputed to Petitioner.

5. Relevant Findings and Conclusion

Based on the foregoing evidence and analysis, I find and conclude
as follows:

8. A violation under 42 U.S.C. § 263a(i)(4) may be
established on proof that:

a. a proficiency test sample has been referred for
analysis by one laboratory to another laboratory, and

b. the referring laboratory had knowledge that the
sample it was referring was a proficiency test sample
instead of a patient specimen.

9. A total of five proficiency test samples sent to
Petitioner for the June and October testing cycles of
1995 were referred to Corning Laboratory.

10. Petitioner's five proficiency test samples were
referred for the purpose of having Corning Laboratory
analyze them.

11. Petitioner alleged, and HCFA did not dispute, that
the five proficiency test samples were referred to
Corning Laboratory by the individual employed as
Petitioner's Testing Personnel in 1995.

12. Before the five proficiency test samples were
referred to Corning Laboratory, Petitioner's
Laboratory Director and sole owner had given
Petitioner's Testing Personnel the authority and
discretion to make referrals of patient specimens as
well as proficiency testing samples on behalf of
Petitioner.

13. While preparing reports for the proficiency test
service in June and October of 1995, Petitioner's
Office Manager became aware that proficiency test
samples had been referred to Corning Laboratory for
analysis.

14. In June and October of 1995, when she became aware
that the referrals of Petitioner's proficiency test
samples had been made, Petitioner's Office Manager took
no action on behalf of Petitioner to repudiate or
disavow those referrals.

15. In 1995, Petitioner's Office Manager recognized
and acknowledged the Testing Personnel's authority to
refer proficiency testing samples to another laboratory
for analysis.

16. Whether or not Petitioner's Laboratory Director
had contemporaneous knowledge of the referrals at
issue, Petitioner is bound by its Testing Personnel's
actions and knowledge in having referred the five
proficiency samples to another laboratory for analysis.

17. On June 15, 1995, Petitioner, through its Testing
Personnel, knew that it was referring to Corning
Laboratory two proficiency testing samples instead of
two patient specimens.

18. On October 25, 1995, Petitioner, through its
Testing Personnel, knew that it was referring to
Corning Laboratory three proficiency testing samples
instead of three patient specimens.

19. The referrals of five proficiency test samples in
1995 were made by Petitioner intentionally, within the
meaning of 42 U.S.C. § 263a(i)(4) and the corresponding
regulations.

C. Invalidity of Petitioner's Affirmative Defenses

1. Summary of the Affirmative Defenses

Petitioner asserted as an affirmative defense that the five
proficiency samples were referred to Corning Laboratory through
an inadvertent mistake on the part of Petitioner's Testing
Personnel, who misunderstood Dr. Premachandra's instructions to
"handle the proficiency samples in the same manner as patient
samples" as meaning that proficiency test samples should be
included for referrals as part of a "quality control random
testing procedure." P. Br. at 24; Tr. 135-36. Petitioner
contended also that the referrals of proficiency samples were
unintentional, in that Dr. Premachandra, who admits to having
"unknowingly and inadvertently caused the situation which led to
this action," was merely trying to follow the law by directing
the "Laboratory Technician"/"Testing Personnel" "to treat" the
proficiency samples like all patient samples. P. Br. at 25.
According to Petitioner, the Testing Personnel took Dr.
Premachandra's directives literally and without bad intent. Id.

In related arguments, Petitioner contends also that it never
analyzed Corning Laboratory's results, and, therefore, the "for
analysis" requirement of the statute and regulations was never
satisfied in this case. P. Br. at 30-31.

I reject Petitioner's affirmative defenses for the reasons which
follow.

2. The Immateriality of the Nature of the
Motives and Specific Intent

I have already ruled above that the test for intent under 42
U.S.C. § 263a(i)(4) and its corresponding regulations is whether
the referring laboratory knew that it was referring proficiency
test samples instead of patient specimens to another laboratory
for analysis. I have ruled also that "intentional" under the
statute and regulations relevant to this case means only that the
acts were done deliberately or with a determination to act in a
certain way. Proof that the referring laboratory knew that it
was referring proficiency test samples (as opposed to patient
specimens) satisfies the intent requirement of 42 U.S.C. §
263a(i)(4) and the corresponding regulations.

For these reasons, it is immaterial whether Dr. Premachandra and
the Testing Personnel were without bad motive or without specific
intent to violate the law when they chose to take the various
actions which resulted in these proceedings. Moreover, Dr.
Premachandra's state of mind cannot absolve Petitioner of
liability, since he denies having had any prior or contemporary
knowledge of the referrals, he denies having made any of the
referrals in this case, and the Testing Personnel to whom he has
attributed the referrals had the authority to refer the samples
on behalf of Petitioner.

3. The Inadequacy of Proof in Support of Petitioner's
Affirmative Defenses Based on Good Motive and Specific
Intent (if relevant)

Additionally, even if I were to consider relevant Dr.
Premachandra's motives or intent at the time he authorized the
Testing Personnel to make referrals on Petitioner's behalf, I
would conclude that the facts fail to support Petitioner's
contention that his actions were inadvertent or taken by mistake.
Even if I were to consider relevant also the Testing Personnel's
motives or specific intent at the time she made the referrals of
proficiency testing samples, I would conclude that the evidence
is insufficient to support Petitioner's contention that its
actions were motivated by and intended for the testing of patient
specimens under Petitioner's "quality control" procedures. I
will discuss these conclusions below, along with my corollary
conclusions that the evidence fails to establish the existence of
a bona fide "quality control" program in 1995, and that the only
reason why Petitioner had set up the referral process under
review in this action was to enable the Testing Personnel to
perform independent verifications of any or all test results
attained in Petitioner's facility by comparing them against those
results provided by another laboratory on request.

a. The evidence does not show that Petitioner's
Laboratory Director had acted unintentionally, as
that term is defined for purposes of this action.

Whereas Petitioner alleges that Dr. Premachandra "unknowingly and
inadvertently caused the situation which led to this action" (P.
Br., 25), the evidence shows that Dr. Premachandra gave
instructions and authorizations to the Testing Personnel pursuant
to choices he had under circumstances which required the exercise
of due deliberation in his capacity as Petitioner's founder, sole
owner, and Laboratory Director. In these positions Dr.
Premachandra clearly had the choice of setting any procedures he
felt to be appropriate for Petitioner to perform the proficiency
tests necessary for maintaining its CLIA certificate. Setting up
those procedures for the June and October, 1995 test events were
especially important for Petitioner since, as I noted above,
Petitioner was certified under CLIA on August 31, 1994, but did
not enroll in a proficiency test program for the first test
period of 1995.

However, as the evidence I have noted above shows, Dr.
Premachandra made the decision not to reserve the referral
decisions for himself and not to monitor closely the referral
decisions made by another. He decided to delegate the referral
responsibility to the Testing Personnel who was not only working
part-time on a widely variable schedule, but who also did not
need to have more than minimal on-the-job training to perform her
work. He chose to make a plenary delegation of referral
responsibilities to the Testing Personnel without providing for
routine, after-the-fact reviews of her referral choices, and
without specifying for her what she may or may not refer to
another laboratory under the law.

The evidence introduced by Petitioner leads me to conclude also
that Dr. Premachandra chose to direct that all proficiency test
samples be "handled" in the same manner as patient specimens,
despite the fact that the relevant statute and regulations
specify very clearly that the proficiency test samples must be
tested by Petitioner on its own and without referrals, in the
same manner that Petitioner tests patient specimens on its own
and without referrals. I find nothing in the statute and
regulations which would have led Dr. Premachandra or anyone else
in his position to conclude that proficiency testing samples
should be "handled" or "treated" in the same manner as patient
specimens for referrals to another laboratory for analysis. See
Footnote 11. As Petitioner's founder, sole owner, and
Laboratory Director, Dr. Premachandra had the knowledge,
incentive, opportunity, and authority to issue instructions which
would have prohibited the referrals of proficiency test samples
to another laboratory for analysis.

Also significant is the fact that in both June and October of
1995, Dr. Premachandra had the opportunity, incentive, and duty
to inquire into the manner in which all of Petitioner's
proficiency testing samples from these two test events had been
"handled" by the Testing Personnel before he signed the two
attestation forms required by law. He would have been in a
position to take remedial steps to avoid the imposition of
sanctions by HCFA if he had chosen to find out about the
referrals of the proficiency test samples before he signed the
attestation forms. Instead, the evidence indicates that he chose
to sign these forms and remain ignorant of the referrals now at
issue until the April 1996 survey was being conducted.

For the foregoing reasons, even if I were to consider relevant
Dr. Premachandra's motives or state of mind at the time
Petitioner considers significant for its affirmative defense, the
facts would still lead me to conclude that he had acted
intentionally, as I have defined the term under 42 U.S.C. §
263a(i)(4). Those of Dr. Premachandra's actions referenced by
Petitioner were taken deliberately by him, with a determination
to act in a certain way, in situations which required him to make
choices on Petitioner's behalf.

b. The evidence does not show that the referrals
of proficiency test samples were made to evaluate
the quality of Petitioner's work on patient
specimens under a "quality control" program for
patient specimens.

I have already concluded that Petitioner, through its Testing
Personnel, knew that it was referring proficiency testing samples
instead of patient specimens to Corning Laboratory. I reached
this conclusion based on the preponderance of the evidence. The
evidence of record provided no support for Petitioner's
intimation that the proficiency test samples might have been
mistaken for patient specimens when the referrals were made to
Corning Laboratory.

However, even if Petitioner's affirmative claim of inadvertence
now makes relevant the issue of Dr. Premachandra's specific
intent when he set up the procedures for the Testing Personnel to
make referrals at her discretion, Petitioner has not proven the
truth of its contentions that Dr. Premachandra intended that only
patient specimens be referred "randomly" for internal quality
control purposes, or that there existed a bona fide internal
quality control program which depended on the "random" referrals
described by Petitioner. Nor has Petitioner proven for its
affirmative defense the Testing Personnel's good intentions or
thoughts. As I will discuss in greater detail below, what Dr.
Premachandra described for Petitioner was, at best, the
procedures which were set up to enable the sole Testing Personnel
employed in 1995 to double-check, on her own, any test results
she had obtained in-house by requesting analysis from another
laboratory; the specific end result intended by these procedures
was the comparison of these two sets of results to ascertain if
they are in accord.

As indicated by HCFA's witness during the hearing, it would make
no fiscal sense for a small laboratory like Petitioner to use its
own money to refer out specimens as a self-created quality
control program when it was already participating in a federally
mandated quality control program (the proficiency tests) three
times each year, which resulted in Petitioner's being evaluated
on its testing of samples equalling almost one percent of those
patient specimens it routinely tests each year. 15/ Tr. 90.
For background purposes, I take notice also that the regulations
detail the Quality Assurance procedures that each laboratory must
maintain as a condition of participation under CLIA. 42 C.F.R.
Part 493, subpart P. A Quality Assurance program under CLIA must
evaluate the effectiveness of the laboratories' policies and
procedures, identify and correct problems, assure the accurate,
reliable, and prompt reporting of test results, and assure the
adequacy and competency of the staff. 42 C.F.R. § 493.1701. A
Quality Assurance program under the regulations depends on the
assumption of responsibilities and oversight by the laboratory's
management, as well as the routine maintenance of records under
the program. What Petitioner has alleged to be its voluntary
"quality control" program via "random referrals" appears to have
nothing in common with the process or goals of the similarly
named procedures required for participation under CLIA.

What Petitioner alleges to be its "quality control" program by
"random referrals" consisted of no more than a delegation to its
sole Testing Personnel (who performed all of the tests for
Petitioner) to make as many or as few referrals as she wished on
whichever days she chose (Tr. 189), at a cost to her employer of
approximately $20 per single test referred out (Tr. 218), without
her employer's keeping track of the referrals actually made by
week, month, year, or costs (Tr. 219), so that the same Testing
Personnel could then compare the results of referrals with the
results she had attained in-house (Tr. 191) -- usually without
the Laboratory Director's knowledge or input 16/ -- in order
to determine whether there were problems with the test results
she had obtained. I do not find credible that the purpose of the
"random" referral process described by Petitioner was to assess
the quality of the testing work performed by its sole Testing
Personnel, since this same Testing Personnel not only selected
what she referred out in order to double-check her own results,
but she was charged also with notifying the Laboratory Director
only if she perceived a "big variation" between her results and
the results returned from her referrals. See Tr. 187, 191.
The evidence does not establish that the referral process
Petitioner described for 1995 had any purpose other than to
enable Petitioner's Testing Personnel to double-check whichever
of her own test results she selected, for whatever reasons she
may have had. The evidence is clear that, whenever referrals
have been made by the Testing Personnel, Petitioner expected the
Testing Personnel to compare, on Petitioner's behalf, the results
she obtained in-house with those obtained by another laboratory
under the referral process. Tr. 191.

Therefore, if the Testing Personnel's motive and specific intent
is relevant to Petitioner's affirmative defense, I would conclude
on the basis of the above-discussed evidence that the evidence
fails to support Petitioner's argument that the referrals of the
proficiency test samples resulted from the Testing Personnel's
adherence to certain "quality control" procedures set up to
evaluate her work on patient specimens. I note in addition that
there exists no testimony or first-hand account of the relevant
events from the Testing Personnel herself in this case.
Petitioner has attributed certain good motives and specific
intent to her in making its affirmative arguments. These
attributions do not suffice as credible proof -- especially when
the greater weight of the evidence establishes that she knew she
was referring proficiency test samples under a process which was
specifically set up to enable her to check any of her results
against those she requested from another laboratory.

c. Petitioner did not prove that, by its Testing
Personnel, it did not analyze or intend to analyze
the results received from Corning Laboratory.

Another of Petitioner's affirmative arguments is that no
violation has been proven by HCFA because there is no evidence of
Petitioner's intent to analyze the results it received from
Corning Laboratory, and Petitioner did not, in fact, analyze
Corning Laboratory's results. If I have not yet made clear in
other parts of this Decision, I now make explicit my holding
that, for liability to attach under 42 U.S.C. § 263a(i)(4) or the
regulations promulgated thereunder, HCFA need not prove that
Petitioner had a specific intent to analyze the results of tests
performed by another laboratory on Petitioner's proficiency test
samples. After it is established that one laboratory has
referred proficiency test samples to another laboratory for
analysis, HCFA need not prove also that the referring laboratory
actually analyzed (or intended to analyze) the results returned
by the other laboratory pursuant to the referral. I have
construed the "for analysis" language of the statute and
regulations to mean that the proficiency test samples were
referred to another laboratory to perform an analysis of them; I
have rejected Petitioner's legal interpretation that "for
analysis" means the referring laboratory must study the results
sent by the other laboratory. Therefore, I find immaterial the
issue of whether Petitioner performed or intended to perform an
analysis of Corning Laboratory's results before it filed its
reports with the proficiency testing service.

However, even if the factual merits of Petitioner's contention
needed to be evaluated in the context of Petitioner's assertion
that the referrals of proficiency samples were made by mistake or
with no improper intent, I would conclude that the evidence does
not support the truth of Petitioner's assertion that it never
analyzed or intended to analyze the results from Corning
Laboratory. Petitioner's contention is based solely on the fact
that its Office Manager, who recorded the proficiency test
results for Petitioner, testified at hearing that she did not
make use of the results from Corning Laboratory. P. Br. at 31.
(HCFA did not stipulate to the truth of those asserted facts
during hearing or in its briefs. 17/) The Office Manger's
testimony, even though uncontradicted, is not dispositive on the
issues of whether Petitioner, by another of its employees in
1995, intended to compare (or had actually compared) Petitioner's
results with those from Corning Laboratory.

The evidence previously discussed in this Decision shows that,
under the procedures described by Petitioner, Petitioner expected
its Testing Personnel to compare the test results she obtained
in-house against the results returned from any referrals she
made. Petitioner did not call the Testing Personnel to testify
about her actions or intentions. The record before me does not
contain adequate evidence for concluding, as Petitioner urges,
that the Testing Personnel referred the proficiency test samples
to Corning Laboratory to analyze with Petitioner's authorization
and at Petitioner's expense, but the Testing Personnel never
intended to study Corning Laboratory's results on behalf of
Petitioner.

Additionally, Petitioner has never established that no analysis
of the Corning Laboratory results had been done by the Testing
Personnel before the Office Manager prepared the report for the
proficiency testing service. Petitioner, by its Office Manager,
could not set forth any specifics of the Testing Personnel's work
schedule during 1995. See, e.g., Tr. 148. Since there is no
evidence concerning the Testing Personnel's whereabouts on the
days that Corning Laboratory delivered its reports to Petitioner,
Petitioner has not ruled out the Testing Personnel's opportunity
to analyze the Corning Laboratory results on behalf of
Petitioner. Given the evidence showing that the intended purpose
of Petitioner's referral procedures was for the Testing Personnel
to compare the results she obtained in-house with those she
received from another laboratory, Petitioner has not ruled out
the likelihood that the Testing Personnel had decided to retain
the in-house results until after having reviewed Corning
Laboratory's reports.

The Office Manager testified only that she had recorded the
proficiency test results for Petitioner by use of the documents
left by the Testing Personnel in a designated tray. Tr. 149.
However, she did not allege any knowledge of what was done by the
Testing Personnel or anyone else before the data she copied was
left in the designated tray and before she had an opportunity to
copy them onto the proficiency test report forms. The Office
Manager's testimony merely seeks to prove that she herself did
not do what the Testing Personnel could have done and was
expected to do for Petitioner under the referral procedures in
place.

4. Relevant Findings and Conclusions

Based on the evidence and reasons discussed in this section, I
find and conclude as follows with respect to Petitioner's
affirmative defenses:

20. Petitioner's evidence and arguments on good
motives and lack of specific intent to violate 42
U.S.C. § 263a(i)(4) are not material.

21. Even if material, Petitioner's evidence relating
to its Laboratory Director's intent does not prove that
the referrals of five proficiency samples in this case
were made unintentionally, or inadvertently, as those
terms are construed in the context of 42 U.S.C. §
263a(i)(4).

22. Even if material, the truth of Petitioner's
arguments concerning its Testing Personnel's good
motives and mistakes under a "quality control" program
for only patient specimens has not been established by
the evidence.

23. It is immaterial whether Petitioner had performed
or intended to perform an analysis of Corning
Laboratory's results before it filed its reports with
the proficiency testing service.

24. Even if material, the truth of Petitioner's
assertion that it never analyzed or intended to analyze
the results from Corning Laboratory has not been
established by the evidence.

25. The purpose of the alleged "quality control"
referral procedures set up by Petitioner was for
Petitioner, by its Testing Personnel, to compare the
results it obtained in-house with those results
obtained from another laboratory pursuant to referrals.

26. Under the alleged "quality control" referral
procedures described by Petitioner, Petitioner, by its
Testing Personnel, routinely compared the results she
obtained for Petitioner in-house with those she
obtained from another laboratory pursuant to referrals.

II. CONCLUSION

I order the revocation of Petitioner's CLIA certificate. In so
doing, I issue also the following formal conclusions to resolve
the ultimate issues before me, based on the legal authorities and
evidence discussed above:

27. Petitioner has violated 42 U.S.C. § 263a(i)(4) and
the regulations promulgated thereunder by the Secretary
of HHS.

28. Pursuant to 42 U.S.C. § 263a(i)(4) and 42 C.F.R.
§§ 493.801(b)(4), 493.1840(b), I uphold HCFA's
determination to revoke Petitioner's CLIA certificate
for one year.

29. Pursuant to 42 C.F.R. § 493.1842(a), 493.1808(a),
and 493.1842(b), I uphold also HCFA's cancellation of
Medicare payments for all tests performed by
Petitioner.


Mimi Hwang Leahy
Administrative Law Judge


* * * Footnotes * * *

1. Because a timely request for hearing was filed by
Petitioner, HCFA was precluded from effectuating its proposal to
revoke Petitioner's CLIA certificate until a hearing decision is
issued in HCFA's favor. 42 C.F.R. § 493.1840(e).
2. During the hearing, I received into evidence
Petitioner's exhibits 1-20 (P. Ex. 1-20) and 22-32 (P. Ex. 22-
32). Petitioner's exhibit 33 was not admitted into evidence on
the basis of relevancy and because it was submitted after the
deadline date for submitting proposed exhibits.

HCFA submitted three proposed exhibits (HCFA Ex. 1-3).
Petitioner objected to HCFA Ex. 1 and 2. In my Ruling of
February 5, 1997, I determined that certain parts of those
exhibits should be deleted by HCFA, since those parts do not
relate to the allegedly intentional referral of proficiency
testing samples. HCFA resubmitted expurgated exhibits 1 and 2.
During the hearing, I received into evidence HCFA Ex. 1-3.
3. Petitioner's post-hearing briefs will be
designated as "P. Br." and "P. Reply;" HCFA's briefs will be
designated as "HCFA Br." and "HCFA Reply." I cite to the
transcript as "Tr."

Petitioner submitted four attachments (P. Att. 1-4) along with
its post-hearing brief and one attachment along with its reply
brief. At the conclusion of the in-person hearing I closed the
evidentiary portion of the proceedings. Tr. 222. The
attachments submitted by Petitioner with its briefs are not in
evidence and have not been considered by me.
4. Petitioner was established as a laboratory in
1992. Tr. 145, 179.
5. A "reference laboratory" is a laboratory which
receives specimens for analysis from physicians and laboratories
which do not perform their own testing. Tr. 15.

According to the documents reviewed by HCFA, Petitioner was
performing only about 2,000 tests each year. Tr. 90. Petitioner
also introduced testimony to show that its physical plan
consisted of only four rooms: an office for the Director, an
office for the Office Manager, a storage room, and the
laboratory. Tr. 181.
6. An earlier version of the regulations published
at 42 C.F.R. § 493.801(b)(4) stated that the laboratory's CLIA
certificate would be revoked for at least one year if it referred
proficiency test samples to another laboratory "and submits the
other laboratory's results as their own." 42 C.F.R. §
493.801(b)(4)(1992). However, this subsection of the regulation
was subsequently changed, to delete the reference to the
submission of another laboratory's results. Under the version of
the regulation applicable to this case, Petitioner's certificate
must be revoked for at least one year even if its referrals of
proficiency test samples did not also lead to the submission of
the other laboratory's results. 42 C.F.R. § 493.801(b)(4)(1995).

Petitioner herein asserted that it did not compare its own
proficiency test results with those received from another
laboratory, nor did it substitute another laboratory's results
for its own. Tr. 136. HCFA did not allege as part of its case-
in-chief that Petitioner compared its results with another
laboratory's results. Tr. 116. The documentary evidence of
record does not show that the results of another laboratory had
been placed on Petitioner's proficiency test reports.
7. HCFA's allegations resulted from the following
circumstances: during the first testing period of 1995,
Petitioner was not enrolled in any proficiency testing program,
as was required by CLIA; additionally, when the survey was
conducted during early April 1996, Petitioner had just completed
the first (March) set of proficiency tests for 1996. Tr. 130-
132. The HCFA official testifying at hearing did not know
whether the surveyor had available for review any information
from the testing service concerning Petitioner's proficiency
tests for March 1996. Tr. 131.
8. The relevant statutory language is, "Any
laboratory that . . . intentionally refers its proficiency
testing samples to another laboratory for analysis . . ." 42
U.S.C. § 263a(i)(4). The implementing regulations specify that
"[t]he laboratory must not send PT 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). I read the
foregoing as meaning that the referrals must be made for the
purpose of having the other laboratory analyze the proficiency
test samples. I agree with HCFA that the words "for analysis",
"refer to the reason for the referral, in other words what the
reference laboratory is requested to do with the samples, not
what the referring laboratory does with the results." HCFA Reply
at 2.

However, Petitioner interprets the "for analysis" language of the
statute as requiring HCFA to prove that Petitioner had analyzed
the results provided by Corning Laboratory. See P. Br. at 30-31.
According to Petitioner, HCFA must show that Petitioner made the
referrals with the intent that Petitioner would analyze the test
results obtained from the referrals in the sense that it would
compare its results on the proficiency samples to those obtained
from Corning Laboratory or that it would otherwise use the
results obtained from Corning Laboratory. I reject Petitioner's
legal interpretation for being contrary to the plain language of
the statute and implementing regulations.

To the extent Petitioner's use of the Corning Laboratory results
has bearing on Petitioner's affirmative defense, I will evaluate
elsewhere in this Decision the relevant facts asserted by
Petitioner.
9. Because Petitioner's counsel claimed surprise upon
hearing that Corning Laboratory had informed HCFA's witness of
the actual delivery time of the relevant reports, I provided
Petitioner's counsel with the opportunity to further explore the
matter with Corning Laboratory and, thereafter, to assert
whatever disputes of fact as may be appropriate. After
conversing with Corning Laboratory during a recess, Petitioner's
counsel indicated that it was not disputing the delivery time of
the reports, as earlier recounted by HCFA's witness.
10. Given the stipulation concerning Ms. Abernathy's
training and classification under CLIA, I will refer to her as
the "Testing Personnel" herein.
11. Contrary to what has been implied by Petitioner,
the instructions allegedly given by Dr. Premachandra are not in
accord with the law. In attempting to justify the instructions,
Petitioner contended that "federal regulations require
laboratories to treat proficiency samples in the same manner as
patient samples." P. Br. at 11. Petitioner's contention is not
correct. The relevant statute and regulations quoted in this
Decision make clear that a laboratory is limited to testing
proficiency test samples on its own, in-house, and without
referrals to another laboratory for analysis; additionally, the
manner in which the laboratory tests proficiency samples on its
own and in-house must be the same as when it tests patients
samples in-house and on its own. These limitations are not
consistent with Dr. Premanchandra's broad-based instructions to
"handle" or "treat" proficiency test samples like all patient
specimens. The statute and regulations do not permit any
laboratory to "treat" or "handle" the proficiency test samples in
the same manner as patient specimens for the purpose of making
referrals to another laboratory for analysis.
12. I discuss in a separate section below my
rejection of Petitioner's affirmative arguments based on Dr.
Premachandra's descriptions of his intent when he established the
"random" referral process.
13. Petitioner's Office Manager, who denied having
used Corning Laboratory's results when she completed the
proficiency test reports, testified also that she did not know or
could not remember from what source she had acquired the
understanding, in 1995, to report only the proficiency test
results attained by Petitioner itself. Tr. 157-158.
14. I find the procedures relevant because no
evidence was presented by either party to suggest that different
steps were taken in the referrals of June or October of 1995.
15. Petitioner's recorded test volume was just over
2,000 tests per year. It received five samples to test for each
of the three proficiency test cycles.
16. Dr. Premachandra testified that he would be told
only of "big variations" between Petitioner's own results and the
results attained by another laboratory. Tr. 191. If a big
variation existed, he would be told by the Testing Personnel or
the Office Manager and then consider the situation. Id.
17. During the hearing, HCFA made clear that, for
its case in chief, it was not contending that Petitioner had
compared its results with Corning Laboratory's results; however,
if Petitioner presented evidence as an affirmative defense that
no comparisons were made by Petitioner, then HCFA reserved the
right of rebuttal. Tr. 116-19.