I decide that Kaulson Laboratories, Inc. (Petitioner) failed to comply with one or more laboratory conditions of participation under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). The suspension and revocation of Petitioner's CLIA certificate by the Health Care Financing Administration (HCFA) become effective based on my decision that Petitioner manifested condition-level deficiencies. Petitioner's approval to receive Medicare payment for its services was canceled effective January 23, 1998.

Applicable Law

CLIA requires, among other things, that the Secretary of the United States Department of Health and Human Services (Secretary) establish certification requirements for any laboratory that performs tests on human specimens and certify, through the issuance of a certificate, that a laboratory meets certification requirements. 42 U.S.C. § 263a. The Secretary published regulations designed to implement the requirements of CLIA. These regulations are contained in 42 C.F.R. Part 493. The CLIA regulations set forth the conditions that all laboratories must meet in order to perform clinical testing. The regulations also set forth enforcement procedures and hearings and appeals procedures for those laboratories that are found to be noncompliant with CLIA requirements.

The regulations establish both conditions and standards for participation under CLIA. Conditions of participation are set forth as general requirements which must be met in order for a laboratory to qualify under CLIA. For example, under 42 C.F.R. § 493.1201 (general quality control for tests of moderate or high complexity), the condition of participation is stated to include the requirement that a laboratory must establish and follow written quality control procedures for monitoring and evaluating the quality of the analytical testing process of each testing method to assure the accuracy and reliability of patient test results and reports.

Standards of participation are set forth as specific quality requirements which must be met by a laboratory in order to meet the more general requirements of conditions of participation. For example, under 42 C.F.R. § 493.1202 (standards for moderate or high complexity testing or both), specific requirements are set forth which govern the way such moderate or high complexity tests must be performed by a laboratory.

The regulations confer enforcement authority on HCFA in order to ensure that laboratories comply with CLIA. 42 C.F.R. § 493.1800. Where HCFA determines that a laboratory is not complying with one or more CLIA conditions, HCFA may impose principal sanctions against the laboratory which include suspension and/or revocation of the laboratory's CLIA certificate. 42 C.F.R. § 493.1806(a), (b). HCFA may also impose alternative sanctions against a noncompliant laboratory in lieu of, or in addition to, principal sanctions. 42 C.F.R. § 493.1806(c). Additionally, HCFA may cancel a laboratory's approval to receive Medicare payments for its services, where the laboratory is found not to be complying with one or more CLIA conditions. 42 C.F.R. § 493.1807(a).

The regulations provide a noncompliant laboratory with the opportunity to correct its deficiencies so that HCFA may remove alternative sanctions that have been imposed against the laboratory. 42 C.F.R. § 493.1810(e). A laboratory may make an allegation of compliance once it believes it has corrected the deficiencies. HCFA will verify whether the deficiencies have been corrected if it finds the allegation of compliance to be credible and will lift alternative sanctions effective as of the correction date. Id. However, the regulations do not afford a laboratory the same opportunity to have principal, as opposed to alternative, sanctions lifted based on self-correction of deficiencies and an allegation of compliance by the laboratory. Nor is HCFA obligated to accept as credible a laboratory's allegation of compliance. The determination to accept or not to accept a noncompliant laboratory's allegation of compliance is a matter of discretion for HCFA to exercise.

A laboratory that is dissatisfied with a determination by HCFA to impose sanctions against it may request a hearing before an administrative law judge (ALJ) to contest HCFA's determination. 42 C.F.R. § 493.1844. As a general rule, a determination to suspend, limit, or revoke a CLIA certificate is not effective until after a decision by an ALJ that upholds HCFA's determination to impose such a remedy. 42 C.F.R. § 493.1844(d)(2)(i). Hearings before an ALJ do not necessarily require in-person testimony, but can instead, as here, be hearings on a written record. The parties submit documentary evidence accompanied by briefs, thereby providing the basis for the hearing decision. The preponderance of the evidence standard is applied to resolve disputed issues of fact. HCFA bears the burden of coming forward with evidence sufficient to prove a prima facie case that the laboratory was not complying with one or more CLIA conditions. Once HCFA has established a prima facie case, the laboratory has the ultimate burden of persuasion: to prevail, the laboratory must prove by a preponderance of the evidence that it was in substantial compliance with each condition at issue. See Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd., Hillman Rehabilitation Center v. United States Department of Health and Human Services, Health Care Financing Administration, No. 98-3789 (GEV), slip op. at 25 (D.N.J. May 13, 1999).

Background

Petitioner is a clinical laboratory specializing in blood testing for lead poisoning and is located in West Caldwell, New Jersey. By letter dated December 8, 1997, Petitioner received notification from HCFA that HCFA was suspending Petitioner's CLIA certificate due to condition-level noncompliance with CLIA requirements, canceling its approval to receive Medicare payments, and revoking its CLIA certificate as of February 22, 1998, if, by that date, Petitioner had not corrected the conditions which were out of compliance. Specifically, HCFA stated that the New Jersey Department of Health and Senior Services (NJDHSS) had found Petitioner to be deficient in meeting four conditions of participation under CLIA, following a survey conducted on March 21, 1997. The survey cited the following four conditions of participation to be deficient: (1) Patient test management for moderate or high complexity testing (42 C.F.R. § 493.1101); (2) General quality control for tests of moderate or high complexity testing (42 C.F.R. § 493.1201); (3) Laboratories performing high complexity testing; laboratory director (42 C.F.R. § 493.1441); and (4) Quality assurance for moderate or high complexity testing (42 C.F.R. § 493.1701). The NJDHSS conducted revisit surveys on December 23 and December 29, 1997, the results of which confirmed the deficiencies found during the March 21, 1997 survey.

By letter dated January 22, 1998, HCFA informed Petitioner that, as a consequence of these findings, Petitioner's CLIA certificate would be suspended and its approval to receive Medicare payments for laboratory services would be canceled. Petitioner was advised that it had a right to a hearing before an ALJ to contest HCFA's determinations. Petitioner filed a timely request for a hearing.

This case was transferred to me on December 11, 1998, from Judge Riotto's docket. By order dated January 12, 1999, I established a schedule for the filing of documentary evidence and briefs. Regrettably, however, during the January 12, 1999 telephone prehearing conference that led to my order, HCFA mischaracterized the issue (a mischaracterization to which Petitioner acquiesced), suggesting that the controversy in this case centered on Petitioner's employment of a filter paper method test to determine blood lead levels, rather than Petitioner's alleged failure in its performance of the filter paper test to follow proper quality control standards and conditions as mandated by CLIA. Thus, my January 12, 1999 order mischaracterized the issue, indicating that the issue concerned the employment of the filter paper method, as opposed to the manner in which testing was performed. Neither party pointed out this mistake prior to submitting evidence and briefs. HCFA's opening brief focused on Petitioner's alleged failure to comply substantially with CLIA requirements. Petitioner's response brief, in contrast, contained an extensive defense of the filter paper test in general, leaving unaddressed HCFA's allegations that Petitioner had not properly performed its testing. In its reply brief, HCFA highlighted Petitioner's failure to address in its brief HCFA's specific allegations of deficiencies regarding Petitioner's performance of filter paper testing. In fact, only in Petitioner's reply brief did it begin to address the findings of the NJDHSS surveys, and then only in a cursory manner.

At my direction, the Civil Remedies Division staff attorney assigned to work with me on this case conducted another prehearing conference with the parties on September 9, 1999. The staff attorney expressed my concern that Petitioner may have relied on the "Issue" paragraph from my January 12, 1999 order when it prepared its briefs, rather than addressing the actual findings of the NJDHSS surveys and HCFA. During the conference call, the parties were given the opportunity to clarify their positions and supplement the record, either by requesting an in-person hearing or by additional written submissions and/or documentary evidence. Both parties declined the opportunity.

Since both parties waived their opportunity to supplement the record with either an in-person hearing or additional written submissions and/or documentary evidence, I have decided this case based on the documentary evidence and other written submissions of record. I admit into evidence Petitioner's Exhibits (P. Exs.) 1-26, which accompanied Petitioner's brief filed in June 1999, and P. Exs. 1A-C, 2A, 3A, 4A, 5A-B, 6A, 7A, and 8A, which accompanied Petitioner's brief filed in August 1999; and HCFA's Exhibits (HCFA Exs.) 1-34, which accompanied its brief filed in May 1999. Deciding this case, given the complexity of the issues and the meagerness of the material that comprises the record, was challenging. In many instances, Petitioner's briefs did not touch on the allegations put forth by HCFA. Relying on the exhibits and the two sets of briefs that each party submitted (HCFA's briefs were filed in May and July 1999, and Petitioner's briefs were filed in June and August 1999), I also scoured the record for evidence to support each party's position, even where the parties have left their positions essentially unsupported or unaddressed.

Issue

The issue is whether Petitioner failed to comply with one or more conditions of participation under CLIA, thereby giving HCFA the authority to suspend and revoke Petitioner's CLIA certificate and cancel its approval to receive Medicare payments.

Findings of Fact and Conclusions of Law

Each finding of fact and conclusion of law, set forth as a separate heading, is discussed below in detail.

1. Petitioner failed to comply with the condition of
participation set forth at 42 C.F.R. § 493.1101.

The condition of participation that is stated at 42 C.F.R. § 493.1101 requires a clinical laboratory that performs moderate or high complexity testing to employ and maintain a system that provides for proper patient specimen preparation, proper specimen collection, identification, preservation, transportation and processing, and accurate result reporting. The standards which recite the particular requirements of this condition are stated at 42 C.F.R. §§ 493.1103-493.1111. I find that Petitioner has not met the requirements of three of these standards, as explained in detail below. Based on the pervasiveness of Petitioner's deficiencies under these standards, I further find that Petitioner failed to comply with this condition of participation.

1.a. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1105(f).

The standard level requirement that is stated at 42 C.F.R. § 493.1105(f) provides, among other things, that a clinical laboratory must include any additional information on the requisition or test authorization form necessary to a specific test to assure accurate and timely testing and reporting of results. HCFA contends that, contrary to Petitioner's statements in its August 22, 1997 plan of correction, the type of specimen received was not always marked by the laboratory when a physician had not entered this information on the request form. According to HCFA, the NJDHSS surveyors reviewed 100 requisition and test authorization forms and found eight that lacked specimen type information. See HCFA Ex. 32 at 2-3. One example of this oversight was submitted to me as evidence. See HCFA Ex. 27.

I find Petitioner to be deficient under this standard. Information pertaining to the type of specimen is "relevant and necessary to a specific test to assure accurate and timely testing and reporting of results." 42 C.F.R. § 493.1105(f). Petitioner does not contest this premise in either of its briefs or in either of its plans of correction. Rather, Petitioner states that this information is known to Petitioner from other sources and because each physician submits only one type of specimen. See HCFA Ex. 32 at 2. However, the regulation specifically provides that such "relevant and necessary" information is to be included on "the requisition or test authorization." 42 C.F.R. § 493.1105(f). Accordingly, Petitioner's repeated failure to ensure that this information is included on the requisition or test authorization form is a deficiency under this standard.

1.b. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1107(a).

Under this standard, a "laboratory must maintain a record system to ensure reliable identification of patient specimens as they are processed and tested to assure that accurate test results are reported." 42 C.F.R. § 493.1107 (emphasis added). Accurate identification of a particular specimen at all stages of testing is critical to the integrity of the test performed. See generally, 42 C.F.R. § 493.1101. The standard requires that the record system include "[t]he patient identification number, accession number, or other unique identification of the specimen." 42 C.F.R. § 493.1107(a).

I conclude that Petitioner did not comply with the requirements of this standard. HCFA, relying on the NJDHSS March 21, 1997 survey, raises serious systemic concerns regarding Petitioner's ability to accurately cross-reference patient specimens on the worksheets to the sample cup numbers on the corresponding analyzer printout of the test results. The deficiency is evidenced by the following factors:

• Petitioner identified patient specimen #96-15427 as being in cup position #3 with a result of 29 ug/dl, although the printout showed two other analytical results of 3.9 and 25.1 ug/dl that were also listed in the cup #3 position. HCFA Ex. 4 at 3-4; HCFA Ex. 17 at 2-3; HCFA Ex. 18 at 3, 6, 8.



• Petitioner listed on the repeat worksheet that patient specimen #96-15446 was in cup position #4 with a result of 25 ug/dl, while the printout for that day shows a result of 2.4 ug/dl. HCFA Ex. 18 at 3, 8.

Neither Petitioner's briefs nor its reponses in its plans of correction contain any argument to refute this evidence or otherwise explain or defend its position specific to the cited deficiency under 42 C.F.R. § 493.1107(a). HCFA Ex. 17 at 2-3; HCFA Ex. 32 at 3.

1.c. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1109(a).

The standard level requirement governing test reporting is stated at 42 C.F.R. § 493.1109(a). Under this section, a CLIA-certified laboratory is required to maintain records of blood and blood product testing. 42 C.F.R. § 493.1109. The laboratory must "have adequate systems in place to report results in a timely, accurate, reliable and confidential manner . . . ." 42 C.F.R. § 493.1109(a). HCFA asserts that systemic problems exist in Petitioner's record-keeping and reporting practices and cites numerous instances as evidence to support its position.

While some of the examples of deficient conduct provided by HCFA were not sufficiently established or are not applicable to this subsection of the CLIA regulations, I find Petitioner to be deficient under this standard. Petitioner failed to maintain complete and accurate records of blood testing and its current system is inadequate to ensure the reporting of results in an accurate and reliable manner. This finding is supported by the following factors:

• During the March 1997 survey, nine of 17 retested samples were found to have produced inexplicably large discrepancies in the results. HCFA Ex. 4 at 8; HCFA Ex. 15 at 4; HCFA Ex. 32 at 8. Of the nine retested samples which produced discrepant results, the repeat values were reported on seven occasions without indicating that the initial analytical results were abnormally high.Id. Furthermore, in five of the nine cases of inexplicably large differences between test results, there were no work records to substantiate the repeat analysis and reported test values.Id.



• During the December 1997 revisit, the surveyors found six of 16 repeat testing results were not entered into the initial and repeat testing log despite Petitioner's October 10, 1997 plan of correction stating that such a log was being maintained. HCFA Ex. 4 at 5; HCFA Ex. 5; HCFA Ex. 14 at 2; HCFA Ex. 32 at 15.



• In seven of nine specimens, the date of reporting preceded the date of repeat testing. HCFA Ex. 4 at 6; HCFA Ex. 6; HCFA Ex. 21; HCFA Ex. 32 at 6.



• On December 19, 1997, Petitioner submitted a clarification which stated that venous specimens with initial lead values above 30 micrograms per deciliter are retested regardless of the erythrocyte protoporpyrin (ep) value. HCFA Ex. 4 at 4; HCFA Ex. 28 at 2; HCFA Ex. 32 at 4-5. Yet, the surveyors could not find six specimens that tested above 30 micrograms per deciliter on the retesting log. HCFA Ex. 4 at 4; HCFA Ex. 23 at 3, 5, 11; HCFA Ex. 32 at 4-5.
  

Again, Petitioner has provided little or no evidence to rebut HCFA's allegations. In fact, Petitioner's briefs fail to address adequately, if at all, the specific factual issues raised by HCFA. In most instances, Petitioner's plans of correction are the only documents in the record that provide Petitioner with any sort of defense against HCFA's assertions. HCFA Ex. 17; HCFA Ex. 32. For the most part, however, the statements contained in the plans of correction do not address the scope of the allegations or challenge the evidence submitted by HCFA.

2. Petitioner failed to comply with the condition of
participation set forth at 42 C.F.R. § 493.1201.

The condition-level requirement that is stated at 42 C.F.R. § 493.1201 provides, among other things, that a clinical laboratory must establish and follow written quality control procedures for monitoring and evaluating the quality of the analytical testing process of each method utilized by the laboratory to assure the accuracy and reliability of patient test results and reports. The standards which recite the particular requirements of the condition are stated at 42 C.F.R. §§ 493.1202-493.1221. Petitioner has not complied with several of the standards under this condition. I find the deficiencies under these standards amount to a failure to meet this condition of participation.

2.a. HCFA has not sufficiently established that a deficiency exists
under the standard that is set forth at 42 C.F.R. § 493.1205.

The standard governing test methods is stated at 42 C.F.R. § 493.1205. A laboratory is required, among other things, to utilize test methods, equipment, and materials that provide accurate and reliable test results. 42 C.F.R. § 493.1205. HCFA alleges that Petitioner's deficiencies under this standard are particularly egregious. See HCFA Brief of May 19, 1999 (HCFA Br.) at 19. More specifically, HCFA claims that Petitioner could not demonstrate on a continuing basis that it was calculating its filter paper lead results correctly.Id. For example, HCFA contends that Petitioner failed to demonstrate that it was using 17 microliters of blood in each filter paper disc produced by the punch used by the laboratory where the laboratory director claimed that 17 were to be on each disc. According to HCFA, "Kaulson [also] failed to dilute the patient specimens to the same extent as the calibrator, thus further compromising the accuracy of the filter paper calculations." Id. at 20.

Despite stressing the seriousness of these claims, HCFA relies almost exclusively on the NJDHSS survey report as evidence of these charges, and for this deficiency I do not find that the survey report is sufficient to establish a prima facie case. See HCFA Br. at 19-22, citing HCFA Ex. 4 at 12-14. HCFA provided little information to explain the shortcomings of Petitioner's test methodologies and provided no evidence or authority to support its explanation as to how Petitioner should have conducted its testing. HCFA also provided no evidence or authority to demonstrate that Petitioner's methodologies, as explained in its plans of correction, were improper. Based on the record, I find that HCFA has not established a prima facie case here, because insufficient evidence exists to support HCFA's claim that Petitioner was deficient under this standard.

2.b. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1211(a).

The standard stated at 42 C.F.R. § 493.1211(a) requires that "a written procedural manual for the performance of all analytical methods used by the laboratory must be readily available and followed by laboratory personnel." 42 C.F.R. § 493.1211(a). I find that Petitioner has failed to follow its own written procedures. Petitioner's written instructions for the Perkin-Elmer ZL4100 whole blood procedure specified that, for all values over 50 ug/dl, the sample must be diluted and re-analyzed, or if not repeated, then reported as greater than or equal to 50 ug/dl. See HCFA Ex. 19 at 14. However, contrary to its own procedures, a review of Petitioner's work records and final reports for the period of December 13, 1996 through February 27, 1997, revealed that of the 14 results that had values over 50 ug/dl or greater, only two specimens were diluted and retested, and no specimens were reported as greater than or equal to 50 ug/dl. HCFA Ex. 4 at 16-17. See, e.g., HCFA Ex. 27.

In addition, this standard requires a laboratory to include in its procedural manual a description of the laboratory's system for reporting patient results. 42 C.F.R. § 493.1211(b)(14). This system, once described in the procedural manual, must be followed by laboratory personnel. See 42 C.F.R. § 493.1211(a). The inconsistent manner in which Petitioner reported repeat testing results further evidences a deficiency under this standard. Petitioner's log book of venous specimen testing shows that the reported value is predominantly an average of the initial and repeat test values. See HCFA Ex. 4 at 15; HCFA Ex. 7; HCFA Ex. 23 at 2-3, 9. However, in several instances, Petitioner reported only the lower repeat value.Id.

Petitioner does not directly address these allegations or the evidence in its briefs. In fact, Petitioner's only rebuttal to this evidence can be found in its plan of correction. See HCFA Ex. 32 at 14-15. Yet, the arguments that Petitioner has made in its plan of correction are incomplete, unsupported by evidence, or did not focus on the requirements of this standard.

2.c. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1217(a).

Under this standard, a laboratory must perform calibration procedures in accordance with criteria established by the laboratory, including the number, type and concentration of calibration materials, acceptable limits for calibration, and the frequency of calibration. 42 C.F.R. § 493.1217(b). According to HCFA, Petitioner failed to establish written criteria for its acceptable limits for calibrating both analyzers used by the laboratory. HCFA Br. at 25. HCFA's brief summarizes the NJDHSS survey report which is cited as support for these allegations.Id. However, Petitioner, in both of its plans of correction, states that it has described this procedure in its manual. See HCFA Ex. 17 at 10-11; HCFA Ex. 32 at 18-19. Yet, Petitioner apparently has not submitted this manual, nor has it identified where this information can be found. As previously stated, once HCFA has met the initial burden of establishing a prima facie case, it is Petitioner's responsibility to rebut that case. Although it may have been within its power to do so, Petitioner has not provided the evidence it asserts it has to rebut HCFA's case.

2.d. Petitioner failed to comply with the standard-level
requirement that is stated at 42 C.F.R. § 493.1218(b).

Control procedures should be routinely conducted to monitor the stability of the method or test system. 42 C.F.R. § 493.1218. "A laboratory must evaluate instrument and reagent stability and operation variance in determining the number, type and frequency of testing calibration or control materials and establish criteria for acceptability used to monitor test performance during a run of patient specimens." 42 C.F.R. § 493.1218(b).

HCFA alleges that Petitioner has improperly utilized controls in all stages of testing. In support of its contention, HCFA has asserted numerous examples of Petitioner's mishandling of the control tests. See HCFA Br. at 13-18. However, while citing particular acts of Petitioner as improper, HCFA often did not sufficiently demonstrate how such allegedly improper tests violated a standard under CLIA. Moreover, HCFA often failed to include a citation to a particular standard, leaving me to guess which standard is applicable. For example, HCFA made the following unsupported claim, "[A] specific batch of controls used by a lab must always be identified in advance of the testing process." HCFA Br. at 14. HCFA proceeds to discuss the impropriety of using different batches of homemade controls on different days with different yet overlapping results.Id. Yet, HCFA provides no evidence or authority to substantiate its allegation other than the NJDHSS survey report to establish that Petitioner has violated a standard. In this instance, I have not found that the NJDHSS survey report is sufficient to establish a prima facie case of noncompliance under this standard. HCFA did not even cite which standard this action violated, and the NJDHSS survey report provided little guidance. See HCFA Ex. 32 at 9-11.

Nevertheless, HCFA has established a deficiency under 42 C.F.R. § 493.1218. In its plan of correction, Petitioner stated that a high level control of 30 units would be performed in each test run. See HCFA Ex. 17 at 12. According to the NJDHSS surveyors, however, the highest control Petitioner used was only 27 units. See, e.g., HCFA Ex. 21 at 29, 34, 37, 39, 42, and 44. Petitioner has largely left HCFA's allegation unchallenged, providing only a scant and unsupported statement in its second plan of correction that a high level control at or near 30 ug/dl is sufficient. See HCFA Ex. 32 at 20. I find this argument unpersuasive. The standard requires that a laboratory establish and follow its procedures for administering controls. See 42 C.F.R. § 493.1218. By failing to perform a high level control of 30 ug/dl, Petitioner did not follow its control procedures and, thus, is deficient under this standard.

3. Petitioner was out of compliance with the condition
of participation set forth at 42 C.F.R. § 493.1441.

The condition-level requirement that is stated at 42 C.F.R. § 493.1441 requires, among other things, a laboratory to employ a director who provides overall management and direction in accordance with the standards set forth at 42 C.F.R. § 493.1445. The standard holds a laboratory director responsible for the overall operation and administration of the laboratory. These responsibilities include the employment of personnel who are competent to perform test procedures, to record and report test results promptly, accurately and proficiently, and to assure compliance with applicable regulations.

It is evident from the regulations that a laboratory director is responsible for assuring that a laboratory meets CLIA requirements. A systemic failure by a laboratory to meet these requirements is evidence from which I may infer that the laboratory director is failing to discharge his or her duties.

I find that Petitioner's laboratory director failed to discharge his obligations under the standard at 42 C.F.R. § 493.1445, to such an extent that it amounts to Petitioner's failure to comply with this condition of participation. Petitioner's systematic failures are evidenced by its inability to meet the conditions of participation as described above at Findings 1 and 2.

4. Petitioner was out of compliance with the condition
of participation set forth at 42 C.F.R. § 493.1701.

The condition-level requirement for participation that is stated at 42 C.F.R. § 493.1701 directs a laboratory that performs moderate or high complexity testing to establish and follow written policies and procedures for a comprehensive quality assurance program that is designed to monitor and evaluate the ongoing and overall quality of the laboratory's total testing process. The requirement provides that a laboratory's quality assurance program must evaluate the effectiveness of its 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 laboratory's staff. The requirement directs a laboratory to, as may be necessary, revise policies and procedures based upon the results of its evaluations.

I find that Petitioner has failed to meet this condition of participation. Based upon the deficiencies as discussed at Findings 1 and 2 above, I find that Petitioner failed to monitor properly and evaluate its quality assurance systems and to take corrective actions when problems were discovered. This failure is apparent from the numerous quality deficiencies that were present in Petitioner's testing program. See, e.g., Findings 1 and 2, supra.

Petitioner appears to recognize that deficiencies exist in its processing of patient specimens and attempts to minimize this by suggesting that such errors are inevitable and should be acted upon if they appear deliberate or due to carelessness. See Petitioner's June 18, 1999 Brief at 10-11; P. Ex. 9 at 2-3; P. Ex. 10 at 2. These deficiencies, however, are not trivial and go to the integrity of the laboratory's testing process. Clerical and reporting omissions are important under CLIA.

Petitioner failed to comply with four laboratory conditions of participation under CLIA. The presence of one or more condition-level deficiencies in Petitioner's operations authorizes HCFA to impose the remedies of suspension and revocation of Petitioner's CLIA certificate, which become effective based on this decision.

Jill S. Clifton
Administrative Law Judge