SUBJECT:

Oakland Medical Group, P.C.,

Petitioner,

Health Care Financing Administration

I. Applicable Law and Regulations

CLIA was designed to promote accurate medical tests by clinical laboratories. Congress' goal was to establish a single set of standards applicable to all laboratory services, including those which provide services to Medicare beneficiaries. See, H.R. Rep. 899, 100^th Cong., 2^nd Sess. 8 (1988), reprinted in 1998 U.S.C.C.A.N. 3828.

Under CLIA, the Secretary of the United States Department of Health and Human Services (Secretary) is authorized to inspect clinical laboratories and, in effect, license them to perform tests. The Act prohibits a clinical laboratory from soliciting or accepting specimens for testing unless it has first received from the Secretary a certificate authorizing it to perform the specific category of tests which the laboratory intends to perform. 42 U.S.C. § 263a(b). The Act directs the Secretary to establish standards to assure that clinical laboratories certified by the Secretary perform tests that are valid and reliable. 42 U.S.C. § 263a(f).

The standards for operation of clinical laboratories promulgated by the Secretary pursuant to the enabling legislation are found at 42 C.F.R. Part 493. Regulations governing the performance of proficiency tests by clinical laboratories are found at 42 C.F.R. § 493.801. A clinical laboratory must enroll in an approved proficiency testing (PT) program . It must notify the Department of Health and Human Services of each program or programs in which it chooses to participate to meet PT standards. HCFA approves certain companies to administer proficiency tests under CLIA. These approved testing companies send out, three times each year at approximately equal intervals, proficiency test samples to be analyzed by each laboratory for routine chemistry and endocrinology. A minimum set of five samples are sent for each testing event. The participating 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 determine the accuracy of a laboratory's response for qualitative and quantitative chemistry tests or analytes, the program must compare the laboratory's response for each analyte with the response that reflects agreement of either 90 % of 10 or more referee laboratories or 90 % or more of all participating laboratories.⁽¹⁾ A laboratory is required to examine or test each PT sample that it receives in the same manner that it tests patient specimens. 42 C.F.R. § 493.801(b). A laboratory must not engage in any inter-laboratory communications pertaining to the results of PT until after the date by which the laboratory must report PT results to the testing company. 42 C.F.R. § 493.803(b)(3). The regulations emphatically prohibits sending PT samples to another laboratory for analysis which it is certified to perform itself. 42 C.F.R. § 493.801(b)(4). The laboratory must document the handling, preparation, processing, examination, and each step in the testing and reporting of results for all PT samples. 42 C.F.R. § 493.801(b)(5).

Any laboratory that the Secretary determines intentionally refers its PT samples to another laboratory for analysis shall have its certificate revoked for at least one year. 42 U.S.C. § 263a(i)(4), 42 C.F.R.§ 493.801(b)(4). The regulations further provide that when HCFA revokes a laboratory's CLIA certificate, it will also cancel that laboratory's approval to receive Medicare reimbursement for services rendered. 42 C.F.R. § 493.1842(a).

Additionally, a participating laboratory is required to test PT samples in the same manner as patient specimens, 42 C.F.R. §§ 493.61(b)(1) and 493.801(b), and have a director who provides overall management and direction in accordance with 42 C.F.R. §§ 493.801, 493.1441 and 493.1445. A technical supervisor must conform to 42 C.F.R. §§ 493.1449 and 493.1451. A laboratory that does not treat PT testing samples in the same manner as patient samples may have its certificate of accreditation revoked. 42 C.F.R. §§ 493.61(b)(1), 493.61(c)(3), and 493.801(b).

Furthermore, the regulations authorize HCFA or its agent to conduct, on a representative sample basis or in response to substantial allegations of non-compliance, surveys of an accredited laboratory as a means of validating the laboratory's performance

II. Background

Petitioner is a physician office laboratory located in Warren, Michigan that holds a CLIA certificate of accreditation. HCFA Ex. 8, at 1. The laboratory engages in high complexity testing for routine chemistry and endocrinology. Id., at 3. Robert I. Moretsky, D.O., is Petitioner's director, clinical consultant, technical supervisor, and general supervisor. HCFA Exs. 8, at 1; 14, at 1. Rene Wheatley was part of Oakland's testing personnel, as well as part of the personnel working at other laboratories in the general vicinity. HCFA Ex. 14. She performed high complexity routine chemistry and endocrinology testing, as well as PT for Petitioner. Id., at 1.

Some of the laboratories in the Detroit Metro area participating in a PT program operated by the American Association of Bioanalysts (AAB) are Oakland Medical Group (also known as Moretsky/Trager/Flor), John Dunn, M. D., Mark Hertzberg, M. D., Rochester Rd. Clinic, Nazar Sarafa, M.D. (also known as Garden City Medical Clinic), Liptawat Family, P.C., Lakeland Medical, Ecorse Med Center, and Stanley Boykansky, M.D. HCFA Ex. 7. As participants in the PT program, the AAB would mail to each laboratory the same group of five specimens three times a year. The laboratories were required to test these specimens for analytes for which they did patient testing, and mail their results to the AAB by a date certain; approximately 10 days after receiving the samples. Petitioner was required to test the specimens for cholesterol, HDL cholesterol, triglycerides, glucose, thyroid stimulating hormone (TSH), total thyroxine (T4), triiodothyronine (T3), and free thyroxine (FT4).

By letter dated January 4, 1999, Dennis W. Jay, Ph.D., Technical Director of the Proficiency Testing Service of the AAB, sent the Michigan Department of Consumer and Industry Services (MDCIS) some PT results for a group of Detroit area laboratories that he deemed to be suspect. HCFA Ex. 10. Specifically, the cover letter suggested that the same PT results were being submitted by several laboratories. The following five facilities submitted identical PT results during the third testing event of 1998 for cholesterol, HDL cholesterol, triglycerides, and glucose with respect to five different specimens: Oakland Medical Group, John Dunn, M.D., Mark Hertzberg, Rochester Road Clinic, and Nazar Sarafa, M.D. Id.

On January14, 1999, the AAB notified the MDCIS that they had discovered another four facilities reporting duplicate results and included their 1998 third quarter summaries and attestation sheets. These four facilities were: Liptawat Family, P.C., Lakeland Medical, Ecorse Med Center, and Stanley Boykansky, M.D. HCFA Ex. 7, at 1.

In response to the above information, on February 25, 1999, Richard J. Benson, Chief, Laboratory Improvement Section, Bureau of Health Systems, MDCIS, attempted an unannounced complaint investigation of Oakland Medical Group. HCFA Ex. 11, at 3. He sought evidence regarding Petitioner's PT for all three events of 1998. He was particularly interested in reviewing testing records for endocrinology and chemistry performed in 1998, including patient, quality control and PT results. The staff present was unable to produce any testing records, nor was there anyone available who might know their location. The director was not there that day, and Ms. Wheatley was not scheduled to come in at that time. He went away empty handed. Id.

On March 2, 1999, Ms. Lucy Estes, Laboratory Evaluation Specialist, MDCIS, attempted to perform a complaint survey of Petitioner's facilities. HCFA Ex. 15, at 2. Her first attempt failed. During the second attempt on the same day, the attending physician gave her copies of Petitioner's records in response to a request to review quality control records, temperature records, graphs, patient testing records and PT records for 1998. Id. Based on her review of the testing records she received from Petitioner, and information from the AAB concerning the similarity of PT results between Petitioner and others in the Detroit area, Ms. Estes found that Petitioner was not in compliance with the CLIA requirements under 42 C.F.R. § 493.801(b)(1), Testing of Proficiency Samples, and 42 C.F.R. § 493.1451(b)(4), Technical Supervisor Responsibilities. She completed and submitted HCFA Form 2567 to her supervisor, Richard J. Benson, along with the aforementioned documents. See HCFA Ex. 15, Attachment A.

By letter dated July 15, 1999, HCFA served notice of cancellation, suspension, and revocation of the CLIA certificate of accreditation on Petitioner pursuant to the MDCIS' referral of its case for imposition of enforcement action. Specifically, it was found that Petitioner was not in compliance with the following CLIA statutory and regulatory requirements:

• The laboratory must not send PT samples or portions of samples to another laboratory for any analysis which it is certified to perform in its own laboratory. 42 C.F.R. § 493.801(b)(4).
  

• Requirement for Certificate: The laboratory agrees to treat PT samples in the same manner as it treats materials derived from the human body referred to it for laboratory examinations or other procedures in the ordinary course of business. 42 U.S.C. § 263a(d)(E); 42 C.F.R. § 493.61(b)(1); 42 C.F.R. § 493.801(b)(1) - (3).
  

• The Secretary may on an announced or unannounced basis, enter and inspect, during regular hours of operation, laboratories which have been issued a certificate under this section . . . 42 U.S.C. § 263a(g)(1), (2); 42 C.F.R. § 493.1780(b), (c).

HCFA Ex. 1.

Because of the improper referral of PT samples to another laboratory for analysis, the failure to treat PT samples in the same manner as patient samples, and the refusal to permit MDCIS to perform a survey of its facilities, HCFA imposed the principal sanctions of suspension of Petitioner's CLIA certificate of accreditation, cancellation of Petitioner's approval to receive Medicare payment for its laboratory services, and proposal to revoke Petitioner's CLIA certificate of accreditation. HCFA Ex. 1.

Based on MDCIS' recommendation, by letter dated August 4, 1999, HCFA informed Petitioner that although Petitioner did not provide inspection personnel immediate access to their facilities on February 25 and March 2, 1999 to which the inspection personnel were entitled to under the governing regulations, HCFA was withdrawing the determination that Petitioner refused a request to inspect the laboratory and its records. HCFA Ex. 2.

A final and more complete notice of adverse action was served on Petitioner by letter dated October 1, 1999, absent a confirmation that improper proficiency referral did not occur. HCFA Ex. 3.⁽²⁾ The October 1, 1999 letter addressed to Petitioner's director, Dr. Robert I. Moretsky, in pertinent part, states as follows:

As set forth on the HCFA Form 2567 that was enclosed with our letter to you of July 15, 1999, the surveyors determined that with respect to the first three events of 1998, your laboratory's proficiency testing (PT) was not performed with the laboratory's regular workload using the laboratory's routine methods, in violation of the standard at 42 CFR § 493.801(b)(1). In our July 15, 1999, letter, we also stated that the evidence revealed that your laboratory referred certain PT samples to another laboratory for analysis in violation of the standard at 42 CFR § 493.801(b)(4). The evidence strongly suggests that the results of proficiency testing reported by your laboratory during the first, second, and third events of 1998 were obtained by improper referral and/or collaboration. Inter-laboratory communications pertaining to the results of proficiency testing samples, prior to the testing event reporting due date, are prohibited by the standard at 42 CFR § 493.801(b)(3) . . .

In addition, the standard at 42 CFR § 493.801(b)(5) requires that a laboratory must document the handling, preparation, processing, examination, and each step in the testing and reporting of results for all proficiency testing samples . . .

However, based on a review of the 1998 proficiency tests records and the patient sheets during the survey, it was determined that the PT samples were not examined or tested with the laboratory's regular patient work load. Since the survey findings show that integration did not occur, this violates the standard at 42 CFR § 493.801(b)(5).

The findings from the survey also reveal that you, as laboratory director, have not fulfilled your responsibility to assure that PT samples are tested as required under 42 CFR § 493, subpart H. You, as technical supervisor, failed to assure that the manufacturer's quality control expected range inserts were available for each procedure performed in your laboratory. Therefore, normal and abnormal control material ranges were not available to determine whether quality control results were within the expected range of the manufacturer. The presence of the deficiencies cited in this letter and on the HCFA-2567 demonstrates that you have failed to take responsibility for the overall operation and administration of your laboratory. Therefore, the laboratory is out of compliance with the condition level requirement for a laboratory director at 42 CFR § 493.1441. Because your laboratory did not treat PT samples in the same manner as patient samples, it is in violation of the CLIA requirements at 42 CFR § 493.61 and 42 U.S.C. § 263a(d)(1)(E) and does not meet the requirements for a certificate of accreditation . . .

Because of your laboratory's failure to meet the conditions of Proficiency Testing and Laboratory Director, and because of your intentional referral of your laboratory's PT samples for the third testing event of 1998 to another laboratory for analysis, as set forth in our letter of July 15, 1998, we have imposed the following principal sanctions against your laboratory:

• 42 CFR § 493.1808(a) and 42 CFR § 493.1842(a)(1) - Principal Sanction: Cancellation of your laboratory's approval to receive Medicare payment for its services. This sanction will become effective on October 1, 1999, and will remain in effect until a hearing decision is rendered, or the end of the revocation period . . .



• 42 U.S.C. § 263(a)(i)(4), 42 CFR §§ 493.1814(a) and 493.1840(1) - Principal Sanction: Revocation of your laboratory's CLIA certificate.
  

HCFA Ex. 3.

By letter dated July 30, 1999, Petitioner requested a hearing. This case was assigned to me for hearing and decision. On December 23, 1999, HCFA filed a motion and memorandum of law in support of summary judgment accompanied by 16 exhibits (HCFA Exs. 1 - 16) contending that indisputable documentary evidence established a basis for the sanctions. Subsequently, HCFA submitted additional briefs including a sur-reply accompanied by an attachment, which I have numbered as HCFA Ex. 17. On May 31, 2000, HCFA filed an unopposed motion to supplement its exhibits with the transcript of sworn testimony by Debra Sabo, taken on April 12, 2000, in the case of Stanley Boykansky, M.D. v. HCFA , Docket No. C-99-715. The pertinent portion of that transcript, at pages 40-43, purports to show the professional relationship between Rene Wheatley and Debra Sabo. I have admitted the transcript in the Boykansky parallel matter for the limited purpose previously mentioned, and I have marked it as HCFA Ex. 18. Petitioner countered with an opposing memorandum and supporting documentation on January 24, 2000. Additionally, Petitioner argued that an evidentiary hearing was essential to explore certain factual issues in dispute. Petitioner submitted an amended brief dated February 15, 2000 accompanied by two exhibits (P. Exs. 1 - 2) and sur-replies filed February 22, March 31 and May 30, 2000. Petitioner had marked IRS Form 1099, attached to its sur-reply of February 22, 2000, as exhibit one, but I have renumbered it as Petitioner's exhibit three (P. Ex. 3) so as not to confuse it with exhibit number one filed with its reply brief dated February 15, 2000. I admit into evidence HCFA Exs. 1 - 18 and P. Exs. 1 - 3.

For the reasons set forth below, I find that summary judgment is appropriate. There are no material issues of fact in dispute that require an evidentiary hearing. Based on the documentary evidence, written declarations, arguments of the parties, and applicable law and regulations, I find that there are no genuine issues of fact in dispute, and HCFA is entitled to judgment as a matter of law. I further find that Petitioner failed to meet the CLIA conditions of PT under 42 C.F.R. §§ 493.801, 493.61, and 493.801(b)(4), and condition for laboratory director under 42 C.F.R. § 493.1441. Petitioner also failed to satisfy the standard for technical supervisor under 42 C.F.R. § 493.1451. Thus, I order the revocation of Petitioner's certification under the CLIA, 42 U.S.C. § 263a, for a period of one year as proposed by HCFA. I also direct cancellation of approval to receive Medicare payment for services, effective October 1, 1999.

Summary judgment is appropriate when there is no genuine issue as to any material fact and the proponent is entitled to judgement as a matter of law. Fed. R. Civ. P. 56. If the moving party meets this burden, the onus shifts to the opposing party to establish that a genuine issue does exist. The opposing party will have shown that genuine issues of fact are present "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 249 (1986). To accomplish this, the opposing party must go beyond mere allegations, and come forward with factual evidence that creates a genuine issue of material fact. All reasonable inferences are to be drawn in the opposing party's favor. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d. 860, 864 (3^rd Cir., 1986). I have considered all the evidence set forth in the papers submitted, and conclude that all inferences drawn from such evidence, casts no doubt as to the propriety of granting HCFA's motion for summary judgment, inasmuch as there is no issue of material fact to be tried. HCFA's motion is properly supported by affidavits and documentary evidence. Petitioner has relied on mere allegations and denials, thus falling short of showing that there is a genuine issue for hearing. A decision may be made on the basis of statements and evidence presented for the record without a hearing if there is no dispute as to the facts of the case, and one party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56.

III. HCFA's contentions

HCFA contends that the documentary evidence from Petitioner's own records and the PT results submitted to the AAB for the three testing events in 1998 leave no doubt that Oakland's PT results were obtained either in collaboration with, or referral to, other Michigan laboratories in violation of 42 U.S.C. § 263a(i)(4) and 42 C.F.R. §§ 493.801(b), 493.801(b)(4). HCFA also argues that Petitioner failed to test the PT samples with the regular patient workload, and that it was in violation of the condition for laboratory director and standard for technical supervisor. Further, HCFA argues that summary judgment is appropriate as a matter of law given the absence of a genuine or material issue of fact and that the overwhelming evidence is that Petitioner did not meet the requirements of the statute, particularly the CLIA condition for PT. Accordingly, HCFA asks that I sustain the revocation of Petitioner's CLIA certificate for one year and the withdrawal of approval to receive Medicare payment for laboratory services.

IV. Petitioner's contentions

In opposition to HCFA's motion for summary judgment, Petitioner advances the following arguments: the laboratory technician performing PT was not an employee of Oakland Medical Group; the sanctions imposed and proposed are not appropriate according to the enforcement procedures section of CLIA regulations; the declarations of Dennis W. Jay and Richard Benson do not support HCFA's allegations; an intentional referral of PT samples has not been shown by HCFA; results received by the AAB represent small standard deviations and thus there is a high probability that multiple laboratories produced the same figures; occasional human error in rounding a few numbers does not warrant revocation of a laboratory's CLIA certificate; a plan of correction is the most appropriate sanction given the severity of the alleged standard deficiency; that the Commission on Office Laboratory Accreditation (COLA), as HCFA's agent, reported no deficiencies; and that the sanction appropriate for an alleged violation of 42 C.F.R. § 493.1451(b)(4) is a plan of correction.

V. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue in this case is whether Petitioner failed to comply with one or more conditions of participation under CLIA, thereby giving HCFA the authority to impose remedies against Petitioner including revoking Petitioner's CLIA certificate and canceling Petitioner's approval to receive Medicare reimbursements, effective October 1, 1999.

B. Findings of Fact and Conclusions of Law

I hereby make the following findings of fact and conclusions of law:

1. Petitioner is a physician office laboratory located in Warren, Michigan, engaging in high complexity testing for routine chemistry and endocrinology, and operating by virtue of a certificate of accreditation under CLIA. HCFA Ex. 8, at 1.

2. Robert I. Moretsky, D.O., is Petitioner's director, clinical consultant, technical supervisor, and general supervisor. HCFA Ex. 8 at 1; HCFA Ex. 14 at 1.

3. Rene Wheatley performed high complexity routine chemistry and endocrinology and PT for Petitioner and for other laboratories in the Detroit, Michigan, Metro area. HCFA Ex. 14.

4. Oakland Medical Group, P.C. (also known as Moretsky/Trager/Flor), John Dunn, M.D., Mark Hertzberg, M.D., Rochester Rd. Clinic, Nazar Sarafa, M.D. (also known as Garden City Medical Group), Liptawat Family P.C., Lakeland Medical, Ecorse Med. Center, and Stanley Boykansky, M.D. are some of the laboratories in the Detroit Metro area participating in a PT program operated by the AAB. HCFA Ex. 7.

5. Ms. Deborah Sabo performed PT for Stanley Boykansky, M. D., John Dunn, M..D., Garden City Medical Clinic, and Mark Hertzberg, M.D. Ms. Sabo and Ms. Wheatley had a prior professional acquaintance as co-workers at Oakland General Hospital. HCFA Exs. 14 and 18.

6. Petitioner represented that Ms. Rene Wheatley was an employee of Oakland whose duty it was to conduct high complexity testing for routine chemistry and endocrinology. Whether Ms. Wheatley was an independent contractor or not is irrelevant, inasmuch as Petitioner is responsible for the actions of all individuals it authorizes to perform chemistry testing at its facility on its behalf.

7. The AAB would mail each laboratory participating in the PT program the same group of five specimens three time per year. The laboratories were required to test these specimens for analytes for which they did patient testing, and mail their results to the AAB

8. Testing samples for Petitioner included cholesterol, HDL cholesterol, triglycerides, glucose, TSH, T4, T3, and FT4.

9. The affidavits and documentary evidence submitted by HCFA in support of its motion to dismiss show that Petitioner reported PT results to the AAB in 1998 that were identical to the results of eight other Detroit area laboratories for cholesterol, HDL cholesterol, triglycerides, and glucose with respect to five different specimens.

10. From the multitude of identical results, I draw the inference that Petitioner intentionally referred proficiency tests to another laboratory and/or engaged in inter-laboratory communications (collaboration) and then reported the results obtained to the AAB as Petitioner's own results. Additionally, although Petitioner reported PT results to the AAB for the second testing event in June 1998, it lacked records to substantiate the basis for the reported results.

11. Petitioner's PT samples, particularly for the second testing event in June 1998, were not examined with the laboratory's regular patient workload in violation of the condition level requirement set forth at 42 C.F.R. § 493.801 and 42 C.F.R. § 493.61.

12. Petitioner did not arrive at PT results identical to that of eight other laboratories through human error or coincidence, but by intentional referral, collaboration, and manipulation of those results.

13. Dr. Robert I. Moretsky, as laboratory director and technical supervisor was responsible for Petitioner's overall operation and administration. His responsibilities included the employment of competent personnel to perform test procedures, the recording and the reporting of test results promptly, accurately and proficiently, and assuring compliance with applicable regulations. 42 C.F.R. §§ 493.1441 and 493.1445.

14. Petitioner, through Dr. Robert I. Morestsky, was in violation of the condition for laboratory director in failing to provide proper overall management and direction to the facility and by not establishing and carrying out required quality control measures. 42 C.F.R. §§ 493.1441 and 493.1445.

15. Petitioner, through Dr. Robert I. Morestsky, was in violation of the standard for technical supervisor in failing to establish a quality control program with parameters for acceptable levels of analytic performance, and ensuring that such levels are maintained throughout the entire testing process. 42 C.F.R. §§ 493.1449 and 493.1451.

16. Pursuant to 42 U.S.C. § 263a(f), the Secretary is directed to ensure that certified clinical laboratories perform tests that are valid and reliable.

17. A laboratory issued a certificate of accreditation under CLIA must enroll in a PT program and comply with the requirements of 42 C.F.R. § 493.801.

18. Petitioner's PT results for the three testing events of 1998 were obtained through referral and/or inter-laboratory communications (collaboration) with other laboratories which constitutes a violation of 42 C.F.R. § 493.801.

19. By failing to examine or test proficiency samples in the same manner as routine patient specimens, Petitioner violated the terms of 42 C.F.R. §§ 493.801, 493.801(b), and 493.61.

20. The revocation of Petitioner's CLIA certificate for a period of one year is not unreasonable in light of the failure to satisfy the condition level requirements mentioned above.

21. HCFA properly canceled Petitioner's approval to receive Medicare payment for its services, effective October 1, 1999.

22. Petitioner has submitted no affidavits or other documentary evidence that, if taken as true, would create a genuine issue of material fact that would require a hearing. Fed. R. Civ. P. 56.

23. The facts on which I base this decision are either not in dispute or uncontroverted. Thus, summary judgment is appropriate as a matter of law.

VI. Discussion

The discussion of the issues will track Petitioner's points of contention as outlined above.

A. Petitioner's PT results for the three testing events in 1998 were obtained through referral and/or collaboration with other laboratories.

1. That the laboratory technician performing PT was not an employee of Oakland Medical Group does not bar HCFA from suspending, limiting or revoking Petitioner's CLIA certificate based upon the laboratory technician's alleged violations.

Petitioner argues that HCFA cannot take action regarding its CLIA certificate based on violations by a laboratory technician, Ms. Rene Wheatley, who was not an employee. Petitioner argues that Ms. Wheatley was an independent contractor. As such, her actions cannot compromise Petitioner. In furtherance of this position, Petitioner relies on a dubious interpretation of 42 C.F.R. § 493.1840(a) and (b).⁽³⁾ It suggests that a laboratory is only able to act through individuals, and these are specifically mentioned in paragraph (a) of 42 C.F.R. § 493.1840. Thus, Petitioner goes on to argue, at 42 C.F.R. § 493.1840(b), where the regulation speaks of adverse action based on improper referral of PT samples by a laboratory, it is implied that such referral must be carried out by an owner or operator or one of its employees. I note, however, that Petitioner listed Ms. Rene Wheatley as an employee on its Laboratory Personnel Report. HCFA Ex. 14. In addition, Ms. Wheatley is listed as an employee at the other laboratories at which she worked. HCFA Ex. 14. Ms. Debbie Sabo is also listed as an employee at the laboratories at which she worked. HCFA Ex. 14. There was no annotation on the Laboratory Personnel Reports to indicate that Ms. Wheatley's relationship to Petitioner was other than as an employee.⁽⁴⁾

Additionally, Petitioner's narrow interpretation of the regulation overlooks the requirement that an operator bear primary responsibility for the safety and reliability of the results of all specimen testing performed in a laboratory. 42 C.F.R. § 493.2. The term operator encompasses that of owner as well as director. Section 42 C.F.R. § 493.1445 establishes that the director is responsible for the overall operation and administration of the laboratory, including the employment of personnel who are competent to perform test procedures, record and report test results promptly, accurately and proficiently, and for assuring compliance with the applicable regulations. 42 C.F.R. § 493.1445(b) goes on to say that if the laboratory director reapportions performance of his or her responsibilities, he or she remains responsible for ensuring that all duties are properly performed. It is evident that Petitioner seeks to distance itself from the testing technician in vain. It is an absurd proposition that, under CLIA, a laboratory could obtain a certificate of accreditation and then be permitted the freedom to do as it pleases regarding participation requirements as long as it hires only contract help.

Finally, I do not see that 42 C.F.R. § 493.1840(b) places such a strained limitation on the term "laboratory" so as to exclude from its sphere of import persons hired by a facility who are not salaried employees. The "offender" in this portion of the regulation is the laboratory acting through its owners, operators, directors, employees, independent contractors, agents or representatives, etc. The owners or operators cannot shirk their responsibilities under the law or regulations nor hide behind labels.

2. The sanctions imposed and proposed are in accordance with the enforcement procedures.

Petitioner contends that the sanctions imposed and proposed are not appropriate according to the enforcement procedures set forth in the CLIA regulations. It points out that the deficiencies alleged on the HCFA 2567 Statement of Deficiencies are not condition level. Consequently, Petitioner argues that revocation of Petitioner's CLIA certificate is not the proper remedy. Instead, Petitioner argues that it should be required to submit a plan of correction acceptable to HCFA within 12 months.

The implication that HCFA's notice of sanctions was deficient because the HCFA 2567 did not mention a condition level deficiency is unpersuasive. The record is clear that Petitioner had ample notice that it had failed to meet requirements that were a basis for revocation of its CLIA certificate. HCFA's notice dated July 15, 1999, states:

Specifically, your laboratory is not in compliance with the following CLIA statutory and regulatory requirements:

The laboratory must not send PT samples or portions of samples to another laboratory for any analysis which is certified to perform in its own laboratory.

42 C.F.R. 493.801(b)(4).

HCFA Ex. 1, at 2.

Petitioner's violations were further clarified in HCFA's supplemental letter of October 1, 1999:

As set forth on the HCFA Form 2567 that was enclosed with our letter to you of July 15, 1999, the surveyors determined that with respect to the first three events of 1998, you laboratory's proficiency testing (PT) was not performed with the laboratory's regular workload using the laboratory's routine method, in violation of the standard at 42 CFR § 493.801(b)(1). In our July 15, 1999, letter we also stated that the evidence revealed that your laboratory referred certain PT samples to another laboratory for analysis, in violation of the standard at 42CFR § 493.801(b)(4)⁽⁵⁾. The evidence strongly suggests that the results of proficiency testing reported by your laboratory during the first, second, and third events of 1998 were obtained by improper referral and/or collaboration. Inter-laboratory communication pertaining to the results of proficiency testing samples, prior to the testing event reporting due date, are prohibited by the standard at 42 CFR § 493.801(b)(3).

HCFA Ex. 3, at 1-2.

As an additional reason for revocation of its CLIA certificate, HCFA notified Petitioner that it was in violation of the laboratory director condition:

The findings from the survey also reveal that you, as laboratory director, have not fulfilled your responsibility to assure that PT samples are tested as required under 42 CFR § 493, subpart H. You as technical supervisor, failed to assure that the manufacturer's quality control expected range inserts were available for each procedure performed in your laboratory. Therefore, normal and abnormal control material ranges were not available to determine whether quality control results were within the expected range of the manufacturer. The presence of the deficiencies cited in this letter and on the HCFA-2567 demonstrates that you have failed to take responsibility for the overall operation and administration of your laboratory. Therefore, the laboratory is out of compliance with the condition level requirement for a laboratory director at 42 CFR § 493.1441.

HCFA Ex. 3, at 2-3.

In view of the foregoing, I find that the notice of sanctions clearly informed Petitioner that the alleged intentional referral of proficiency samples, the improper inter-laboratory collaboration and/or communications, the failure to treat PT samples in the same manner as patient samples; and the alleged violation of the laboratory director condition were sufficient reasons for revocation of its CLIA certificate.

3. The declarations of Dennis W. Jay, Ph. D. and Richard Benson, CLS, MT supports HCFA's allegations.

As will be more particularly discussed in Part VI(A)(4) below, the declarations of Dr. Dennis W. Jay, Technical Director, Proficiency Testing Service, AAB, and Mr. Richard Benson, Chief, Laboratory Improvement Section, MDCIS, offer ample support for HCFA's allegations. Their declarations (HCFA Exs. 11 and 16) are based not only on their expertise, but also on their personal examination and analysis of the data obtained from the AAB as well as Petitioner's records. Although some of their findings are laced with statistical implications, the thrust of their declarations is more associated with the manner in which certain chemical properties will behave given specific testing conditions. For example, based on their knowledge of the poor reproducibility of testing results for triglycerides and cholesterol, with an expected variation in results on the order of 10 % to 20 %, they are competent to voice an opinion as to the improbable likelihood that Petitioner's PT results for eight analytes, from each of the five specimens would be identical to the results reported by eight other laboratories in the same geographic area.

Petitioner has produced no evidence, either by way of affidavit or other means, to contradict the affidavits of Dr. Jay or Mr. Benson. It rests upon mere allegations and denials that fall short of setting forth specific facts that point to the existence of a genuine issue for trial. In essence, Petitioner has not come forward with evidence that I would have to accept as true, and from which I could draw inferences in its favor.

It should be noted that conclusory or speculative testimony is insufficient to raise a genuine issue of fact to defeat summary judgment. Falls Riverway Realty, Inc. v. Niagara Falls, 754 F.2d 49 (2d. Cir. 1985). In the case at hand, Petitioner does not go beyond self serving assertions. Ironically, Petitioner stated, "While Petitioner agrees that this is highly improbable to have identical values, it is not impossible." Petitioner's October 28, 1999 Report of Readiness, at 5.

I find that the declarations of Dr. Jay and Mr. Benson constitute appropriate evidence in support of HCFA's allegations. The positions they hold, as well as the description of their professional backgrounds in the curriculum vitae attached to each of their affidavits, attest to their expert qualifications.

HCFA Exs. 11 and 16.

4. Petitioner incurred condition level deficiencies that justify revocation of its CLIA certificate of accreditation.

42 C.F.R. § 493.801 unequivocally establishes that a laboratory must not intentionally send PT samples or portions of samples to another laboratory for any analysis for which it is certified to perform in its own laboratory. This section includes a prohibition against engaging in any inter-laboratory communications pertaining to the results of PT samples until after the date by which the laboratory must report PT results to the program for the testing event in which the samples were sent. 42 C.F.R. § 493.801(b)(3). Intentional here means not inadvertent or not through mere oversight.

When PT results are not obtained through independent testing of samples in the same manner as patient samples are tested, the integrity of the entire proficiency program is undermined. This is so because PT is graded on a curve. As Dr. Dennis W. Jay states in his affadavit:

To determine what constitutes a 'passing grade' for a particular analyte, results from laboratories using the same methodology and equipment are grouped together. The average value reported determines the range of 'correct' responses. Because any collaboration among laboratories necessarily skews the calculation of the average, collaboration or referral corrupts the grading range against which all laboratories in the given group are evaluated. Consequently, referral and/or collaboration not only helps insure that those who engage in this improper activity obtain a passing grade, regardless of the quality of their proficiency testing; but also it may so disrupt the average values against which all other similarly situated laboratories are rated as to make other laboratories appear to have performed poorly when, in fact, they may be reporting results well within tolerable limits of accuracy.

HCFA Ex. 16, at 3-4.

The legislative history of CLIA not only reflects the significance attached by the legislators to the accuracy and reliability of laboratory testing, but also their concern that laboratories would seek questionable ways to undercut the intent of Congress.

As stated by an administrative law judge in Long Medical Laboratory, DAB CR334 (1994):

It is apparent, both from the Act itself and its legislative history, that Congress considers proficiency testing conducted pursuant to standards developed by the Secretary to be an important factor in assuring that clinical laboratories conduct tests accurately and reliably. The Act directs the Secretary to develop standards for proficiency testing. 42 U.S.C. § 263a(f)(3). The House of Representatives committee report which supported the Act provides that:

To maintain its certification under the bill, a laboratory would have to participate successfully in a proficiency testing program that met standards established by the Secretary. The Committee believes that proficiency testing should be the central element in determining a laboratory's competence, since it purports to measure actual test outcomes rather than merely gauging the potential for accurate outcomes.

1988 U.S.C.C.A.N. 3849.

Long Medical Laboratory, DAB CR344 (1998), at 4.

As indicated earlier, the identity of PT results reported to the AAB by Petitioner and eight other laboratories in the Detroit Metro area in 1998 led to closer scrutiny. According to Mr. Richard J. Benson, "the chances of nine laboratories arriving at the same values by happenstance for all five specimens of [one] analyte are remote (especially for an analyte result obtained by manual test method), and the chances of nine laboratories arriving at the same values for specimens of two or more analytes are close to nil." HCFA Ex. 11, at 5-6. Close analysis shows that this opinion is more than a statistical theory. In December 1999, Mr. Benson reviewed the work sheets produced by Petitioner. Using the values reported on those work sheets, Mr. Benson performed the calculations that Ms. Rene Wheatley would have had to perform in 1998, in order to report PT results. This exercise allowed him to determine the extent to which Petitioner's work sheets documented that the AAB samples were tested on site and the recorded values were reported. HCFA Ex. 11, at 6.

To lay the foundation for drawing a comparison between the information reported to the AAB and that which was reflected in Petitioner's records, Mr. Benson first determined the methodology employed by the laboratory. He found that the technique used by Petitioner in 1998 to test for glucose, cholesterol, triglycerides and HDL cholesterol, involved comparing the optical characteristics of a known concentration (standard concentration or (sc)) of the substance to be measured to the optical characteristics of the unknown patient sample (control or PT sample or (pc)). The known concentration is a benchmark which is also referred to as the "standard sample." From this known concentration is derived the known optical or absorption characteristics of the analyte in the standard sample (sa). The patient or PT sample is also analyzed to determine its absorption characteristics (pa). Once the (sc), (sa) and (pa) are known, the concentration of the analyte in the PT sample can be calculated by means of simple algebraic equation: [(sc) ÷ (sa)] x (pa) = (pc). The values reported to the AAB for glucose, cholesterol, triglycerides, and HDL cholesterol are the (pc) for each sample, that is, the concentration of the analyte in each of the PT samples. HCFA Ex. 11, at 6-7.

These are manual techniques that yield a broad range of acceptable, or correct PT results for each sample. Consequently, variations in results on the order of 10% to 20% are expected. This broad acceptable range is determined by averaging the results reported by all participating laboratories using similar equipment and technology. HCFA Ex. 16, at 3. The procedures employed by Petitioner for arriving at the optical characteristics of the analytes in unknown patient or proficiency samples require manual dilution, timing incubation periods, and performing calculations. HCFA Ex. 11, at 3-4. This expected poor reproducibility, especially for triglycerides and total cholesterol, is what caught Dr. Dennis W. Jay's attention. HCFA Ex. 16, at 3. Not only was the lack of variability suspect, but the identity in PT results in so many samples among nine different laboratories was absurd.

Mr. Benson's comparison began with the PT results for the first event on March 11, 1998 (98-1). These are recorded at attachment C (HCFA Ex. 11, at 37) and are marked "AAB" followed by a number (AAB1, AAB2, AAB3, AAB4, AAB5). Of the 20 results reported by Petitioner to the AAB for the first event of PT in 1998, 11 are inconsistent with the calculations that the methodology explained above would yield, given the data shown on Petitioner's own work sheets. The following are only some examples of the discrepancies noted when comparing the results yielded by Petitioner's work sheets and the results reported to the AAB:

HCFA Ex. 13, at 2.

In some instances, the discrepancy between their own underlying data and the results reported to the AAB by Petitioner was due to an inexplicable departure from their standard practice of rounding to the next higher number fractions greater than or equal to one half. In other instances, such as cholesterol sample #2, above, a difference of 30 cannot be accounted for by simply deviating from the standard rounding practice. HCFA Ex. 11, at 9 and 10.

It should be noted that Mr. Benson worked the formula for calculating the patient or proficiency concentration backwards in order to arrive at the constant standard sample (sc). He learned, from a review of Petitioner's worksheets, that testing personnel were in the habit of writing the patient absorption (pa) found through observation immediately above the resulting patient concentration (pc). For example, at page 36 of HCFA Ex. 11, for March 21, 1998, the line labeled "C1" (for control), in the glucose column, the first number, which is 28, is the (pa) and the number below it, which is 93, is the (pc), or the result of the first or "normal control" sample. Similarly, for the second control labeled "C2", or abnormal control sample, the (pa) is 88.5 and the (pc), or resulting value is 295. Immediately above that, in the line labeled "std", for standard, is the number 30. This is the (sa) that was used to obtain the result. Thus, using Petitioner's master worksheet figures for the normal control, Mr. Benson performed the following calculation: (93 ÷ 28) x 30 = 99.6 or 100 (rounded). He used this formula: [(pc) ÷ (pa)] x (sa) = (sc). With this information, I am able to determine, for example, that glucose sample #3, above, should have yielded 242. The formula would be applied like this: [100(sc) ÷ 30(sa)] x 72.5(pa) =242(pc) (rounded). Nevertheless, Petitioner reported 240 for this analyte. HCFA Ex. 11, at 37. This is not a matter of simply rounding to the next lower whole number. It is more consistent with a deliberate duplication of results submitted by other laboratories in the area. It is undeniable that the PT technician had at her disposal two sets of results. One of these can be traced to the data in Petitioner's records, and the other is traceable to the results submitted to the AAB by other laboratories in the area. Several other facilities sent identical results of 240 for triglycerides specimen #3 for the first testing event in 1998. HCFA Ex. 7, at 6. Coincidentally, as will be discussed in greater detail below, the same technicians who did PT testing for Petitioner, also performed the same testing for some of the other laboratories whose reported results were identical to Petitioner's. HCFA Ex. 13 contains the constant figures for the standard sample and the standard absorption characteristics of each set of specimens tested for triglycerides, cholesterol, HDL cholesterol, and glucose during the three testing events of 1998.

A review of Petitioner's Master Work Sheets for the second testing event of June 20, 1998 (98-2) revealed that the laboratory did not record any PT testing for this date for any of the analytes with any of the patient testing. HCFA Ex. 11, at 10, 44. Despite the absence of underlying data, Petitioner reported PT results for the second testing event for 1998 to the AAB. HCFA Ex. 11, at 10, 24-27. Petitioner claims to have complied with the proper testing and recording requirements, yet it has failed to make any documentary evidence available for my consideration that shows the existence of any underlying data for the second testing event of June 29, 1998.

The PT results for the third testing event of October 24, 1998 (98-3) are recorded at HCFA Ex. 11, at 61-64. Eight of the 20 reported results are inconsistent with the underlying data in Petitioner's own work sheets. For purposes of this discussion it is not necessary to list all the noted discrepancies. The following are only some of the discrepancies noted when comparing the results yielded by Petitioner's work sheets and the results reported to the AAB:

HCFA Ex. 13, at 2; HCFA Ex. 11, at 11.

The discrepancy between the results yielded by the raw data and the values reported to the AAB cannot be dismissed as mere coincidence or occasional human error in rounding as suggested by Petitioner. The manipulation of the results to bring them into conformity with the results of other laboratories in the area is obvious. The instances of identical values are too many to list here, but can be gleaned from reviewing pages 5-7 of HCFA Ex. 3. Pertinent to this are two noteworthy findings. First, Ms. Rene Wheatley, who was assigned the PT at Petitioner's facility, also was in charge of this same task at several other laboratories. These other laboratories were: Lakeland Medical, Rochester Road Clinic, and Liptawat Family, P.C. Ms. Sabo also happened to be the proficiency tester at three other facilities, John Dunn, M.D., Garden City Medical Clinic, and Mark Hertzberg. HCFA Ex. 14. All of these are included in the group submitting identical proficiency results for the three testing events in 1998 in the Detroit Metro area. As was stated earlier, there was a prior professional relationship between Ms. Wheatley and Ms. Sabo. HCFA Ex. 18. The second item of interest is that Petitioner has no supporting PT data for the second testing event in 1998, yet they reported PT results to the AAB.

In its most recent brief filed on May 30, 2000, Petitioner argued that in the case of Southfield Medical Clinic v. HCFA, DAB CR667 (May 9, 2000), Judge Kessel found that an unlawful referral necessarily involves the actual physical transport of the sample from one laboratory to another. Petitioner contends that in this case there is no evidence of physical referral. Thus, there is no basis for the revocation of its certificate pursuant to 42 C.F.R. § 493.801(b)(4). Petitioner's argument is misplaced on two counts. First of all, Judge Kessel's decision does not stand for the proposition that there must be direct evidence of physical referral of PT samples from one laboratory to another. Petitioner overlooks the fact that referral could be established, as in this case, through circumstantial evidence.⁽⁶⁾

I infer from the multitude of identical results is that Petitioner referred proficiency tests to another laboratory and then reported these to the AAB as its own. Furthermore, Petitioner's inability to document the proficiency tests which it allegedly performed in the second testing event for June 20, 1998, is additional corroboration that Petitioner referred PT samples to another laboratory. This is consistent with the fact that Petitioner's laboratory records included a chart of the temperatures for each day any testing was performed at its facility during 1998. HCFA Ex. 11, at 78. Yet, no temperature entries were recorded for March 21 and June 20, 1998, suggesting that no patient or PT was performed at Petitioner's laboratory on those days. However, Ms. Wheatley attested that PT was done on those days. HCFA Ex. 11, at 5, 19, 25. The lack of temperature entries not only confirms the absence of documentation for the June 20, 1998 PT results, but also casts aspersion on the data entered in the work sheets for March 21, 1998. See, HCFA Ex. 11, at 36, 37. I am not persuaded that this is a result of human error. It is more reasonable to conclude that Petitioner referred samples to another facility.

The second reason for my finding that Petitioner's contention is faulty is that the record clearly shows that there are other condition level deficiencies present in this case. I find that Petitioner failed to meet the condition requirement for testing of samples set forth at 42 C.F.R. § 493.801. It is evident from the preceding discussion that the PT samples for the second testing event in 1998 were not examined with the laboratory's regular patient workload by personnel who routinely perform the testing in the laboratory, using the facility's routine methods in violation of the standard at 42 C.F.R. §§ 493.801(b)(1) and 493.801(b)(2). Further, I find that Petitioner engaged in inter-laboratory communications pertaining to the results of proficiency testing samples. Without such communications, the multitude of identical results between Petitioner and other eight laboratories in the Detroit Metro area would not have been possible. Petitioner has offered no evidence that detracts from my conclusion that it engaged in widespread collaboration and manipulation of PT results. 42 C.F.R. § 493.801(b)(3). The severity of these deficiencies are sufficient to support a condition level violation under 42 C.F.R. § 493.801. The violation pursuant to this section alone would justify revocation of Petitioner's license. However, there is more. As will be discussed in greater detail below, Petitioner was also in violation of the condition for laboratory director, by failing to provide acceptable direction and management to the laboratory staff regarding the handling, preparation, processing, and examination of PT samples. Thus, even if it were found that Petitioner did not refer samples to another laboratory, there is ample evidence to conclude that other condition level deficiencies existed that justify revocation of its license for one year.

5. The results reported to the AAB and the standard deviations do not show absence of referral or collaboration among Petitioner and other laboratories in the Detroit Metro area.

It has been shown that Petitioner manipulated its PT results to coincide with those reported by other laboratories in the area, and that two technicians with a prior working relationship did the PT testing for the Detroit Metro area facilities reporting identical results. It is also true that Petitioner submitted PT results to the AAB identical to other laboratories without any supporting data in its worksheets to justify the reported figures. Therefore, Petitioner's dissertation on standard deviations sheds no additional light as to the reason behind the identity of its PT results with that of eight other Michigan laboratories.

Even if I were to consider the charts submitted by Petitioner in P. Ex. 2, I note that there is much volatility in the standard deviations for the groups of laboratories reported. The example given by Petitioner at page 14 of its amended brief showing a standard deviation range for 26 laboratories from 3.5 to 8.5 for five triglyceride specimens, is far from being an indication of low volatility. This is especially true, in light of all the collaboration that was going on. I am not unmindful that Dr. Jay stated in his declaration that collaboration among laboratories skews the calculation of the average and corrupts the grading range against which all laboratories in the given group are evaluated. It also corrupts the standard deviation by giving a false measure of the volatility of the random variables.

To further illustrate the absurdity of Petitioner's position, I will refer to P. Ex. 2, at 3, where it mentions the PT results for triglycerides in the third testing event for 1998. In sample number one, the lowest reported result was 140 and highest was 233, with a standard deviation of 4.8. In sample number two, the range was 125-208, with a standard deviation of 8.5; in sample number three, the range was 69-115, with standard deviation of 6.2; in sample number four, the range was 96-160, with a standard deviation of 3.5; and in sample number five the range was 69-115, with a standard deviation of 8.1. Given these variables, one would expect some scatter in PT results reported to the AAB for this group. However, these are the results submitted to the AAB by Petitioner and eight other laboratories:

HCFA Ex. 3, at 7.

To attribute the identity of these results to human error, transposition of numbers or pure coincidence, defies belief.

6. The revocation of Petitioner's CLIA certificate is not premised on human error or transposition of a few numbers.

Revocation of Petitioner's CLIA certificate is sustainable, primarily, due to its intentional referral of PT samples to other laboratories and/or collaboration with other laboratories regarding PT results, as has been amply demonstrated. The thorough discussion of this issue in the preceding section makes further elaboration here unnecessary.

7. A plan of correction is not the most appropriate sanction in this case.

In view of the condition level violations incurred by Petitioner, HCFA is authorized to impose principal sanctions including revocation of its CLIA certificate of accreditation. Petitioner can exercise no option regarding the type of sanction HCFA will impose under these circumstances. It is within HCFA's discretion to impose any type of sanction it deems appropriate within the regulations.

8. The absence of reported deficiencies by COLA, does not bar HCFA from finding Petitioner out of compliance with CLIA requirements.

Petitioner's argument that cancellation of its CLIA certificate by HCFA is not appropriate because its laboratory was inspected by COLA for the time period at issue, and no deficiencies related to PT were determined is baseless. A laboratory with accreditation is not immune from inspection by a State Agency acting on behalf of HCFA, where as here, it acted in response to a complaint. HCFA is not bound to ignore non-compliance by a laboratory solely because that facility has been accredited by an appropriately recognized accrediting organization.

9. A plan of correction is not the appropriate sanction in this case.

This issue has been discussed in Part VI(A)(7), above.

B. Petitioner's lack of compliance with laboratory director and technical supervisor responsibilities.

A participating laboratory must have a director who provides overall direction and proper management for a laboratory pursuant to 42 C.F.R. §§ 493.1441 and 493.1445. I find a violation of the condition at 42 C.F.R. §§ 493.1441 and 493.1445 because Petitioner's laboratory director, Dr. Moretsky, failed to provide overall direction and proper management.

Petitioner's laboratory records confirm that proficiency samples were not examined with the laboratory's regular workload; testing procedures were not documented; and prohibited collaboration with other laboratories occurred. Ms. Lucy Estes, the MDCIS surveyor, found that the normal and abnormal control ranges were not available for the purpose of determining if quality control results for tests were within the manufacturer's expected ranges. HCFA Ex. 15, at 7. She also found that the laboratory could not verify quality control values for testing because the lot numbers, the expiration dates and the expected ranges were missing. Id.; HCFA Ex.1, at 9.

Petitioner asserts that all of the worksheets and other information related to its laboratory were provided to the CLIA representatives. Presumably, that would include quality control documentation. Petitioner does not say who those CLIA representatives are. Certainly, it did not provide such documentation to the MDCIS surveyor, Ms. Lucy Estes. In addition, Petitioner did not provide any documentation showing that there was any underlying data to support the PT results that were submitted to the AAB for the second event of 1998. Copies of the original documents which it is duty bound to maintain, were not submitted as evidence for my consideration.

Dr. Moretsky was also Petitioner's technical supervisor. Inasmuch as it is the responsibility of the technical supervisor to establish a quality control program appropriate for the testing performed and establishing the parameters for acceptable levels of analytic performance and ensuring that these levels are maintained throughout the entire testing process from the initial receipt of the specimen, through sample analysis and reporting of test results, I also find a violation of the standard at 42 C.F.R. § 494.1451(b)(4).

VII. Conclusion

Petitioner failed to meet condition level requirements regarding PT for testing events in 1998 and also failed to meet the condition requirement for laboratory director. Further, Petitioner violated the standard for technical supervisor. Accordingly, HCFA had a basis to revoke Petitioner's CLIA certificate for a period of one year and to cancel Petitioner's approval to receive Medicare payments for laboratory services.

Jose A. Anglada

Administrative Law Judge

1. The score for a sample in routine chemistry is either the score determined under paragraph (c)(2) or (c)(3) of section 493.931 of 42 C.F.R. The score for endocrinology is determined under paragraph (c)(2) or (c)(3) of section 493.933 of 42 C.F.R.

2. Pages 2 and 3 of this Exhibit have been submitted by HCFA in inverted order.

3. 42 C.F.R. § 493.1840 states, in pertinent part:

(a) Adverse action based on actions of the laboratory's owner, operator or employees. HCFA may initiate adverse action to suspend, limit, or revoke any CLIA certificate if HCFA finds that a laboratory's owner or operator or one of its employees has . . .

(b) Adverse action based on improper referrals in proficiency testing. If HCFA determines that a laboratory has intentionally referred its proficiency testing samples to another laboratory for analysis, HCFA revokes the laboratory's CLIA certificate for at least one year, and may impose a civil money penalty.

4. It appears from HCFA Ex. 14 that Ms. Rene Wheatley and Ms. Debbie Sabo overlapped testing duties at the Boykansky clinical laboratory. HCFA's Ex. 18, however, indicates through Ms. Sabo's testimony, that Ms. Wheatley did not work at the Boykansky clinical laboratory in 1998. I conclude, nonetheless, that a finding of inter-laboratory communications in this case is not dependent necessarily on their common employment at the Boykansky clinical laboratory.

5. Violation under this paragraph carries a mandatory one year revocation of the facility's certification.

6. I am not unmindful of the holding in Blanding Urgent Care Center, DAB CR 438 (1996). However, in view of my conclusion that referral in this case can be established by way of circumstantial evidence, and since there are other condition level deficiencies that support revocation in this case, I need not opt for one view or the other.