Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division |
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IN THE CASE OF | |
Garden City Medical Clinic, |
DATE: January 30, 2001 |
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Health Care Financing Administration.
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Civil Remedies
CR698 Docket No. A-2000-14 Decision No. 1763 |
DECISION | |
FINAL DECISION ON REVIEW OF Garden City Medical Clinic (Garden City/Petitioner), a physician office laboratory located in metropolitan Detroit, Michigan, appealed a September 11, 2000 decision by Administrative Law Judge (ALJ) Jose A. Anglada granting summary judgment for the Health Care Financing Administration (HCFA). Garden City Medical Clinic, DAB CR698 (2000) (ALJ Decision). There, the ALJ found that Garden City failed to meet condition level requirements for proficiency testing (PT) for testing events in 1998, and failed to meet the condition level requirement for laboratory director. Consequently, the ALJ determined that HCFA had properly revoked Garden City's certificate under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) for one year and properly canceled Garden City's approval to receive Medicare payments for its services, effective September 11, 1999. ALJ Decision at 1. The ALJ Decision was based on 20 findings of fact and conclusions of law (FFCLs). Garden City filed seven general exceptions to the ALJ Decision, including an argument that summary judgment was inappropriate. We have determined that Garden City's contention that summary judgment was inappropriate has merit. Consequently, we reverse and remand this case to the ALJ for further proceedings. Since those proceedings could change the record for decision before the ALJ, we need not delve further into the merits of Garden City's exceptions to the substance of the ALJ Decision.(1) Applicable law and regulations CLIA establishes requirements for all laboratories that perform clinical diagnostic tests on human specimens and provides for federal certification of such laboratories. Pub. L. No. 100-578, amending � 353 of the Public Health Service Act, codified at 42 U.S.C. � 263a et seq.(2) CLIA further grants the Secretary of this Department broad enforcement authority, including the ability to suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more requirements for a certificate. The purpose of the CLIA requirements is to ensure the accuracy and reliability of laboratory tests, and hence the health and safety of those tested. See H.R. Rep. No. 899, 100th Cong. 2d Sess. 8 (1988), reprinted in 1988 U.S.C.C.A.N., 3828, 3829. A laboratory's CLIA certification is generally dependent upon whether the laboratory meets the conditions of certification set out in the statute and regulations. 42 U.S.C. � 263a(f)(1)(E); 42 C.F.R. � 493.1 et seq. Each condition represents a major division of laboratory services to be offered by the laboratory or required environmental protections at the laboratory. The regulations also set forth standards, the specific components of the conditions of laboratory certification that a laboratory must meet as part of achieving compliance with applicable conditions. A key component to the statutory and regulatory program to assure that laboratories holding CLIA certificates are competent to perform tests of moderate and high complexity is the requirement for participation in a PT program that is approved by HCFA, as outlined in 42 C.F.R. Part 493, Subpart H. Among the requirements of that subpart are the following: each laboratory must enroll in an approved PT program that meets specific criteria set out at Subpart I of Part 493; a participating laboratory must test PT samples it receives in the same manner as it tests patient samples; must not communicate the results of its tests to other laboratories prior to the deadline for reporting results; must not intentionally refer PT samples to another laboratory for analysis; and must document and maintain documentation for 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. The condition at 42 C.F.R. � 493.803(a) specifically requires that a laboratory performing high complexity testing "must successfully participate" in an approved PT program for each "specialty, subspecialty, and analyte or test in which it is certified under CLIA." Failure by a laboratory to comply with even a single condition in an area of testing offered by that laboratory may be grounds for suspension or revocation of a laboratory's CLIA certificate. Ward General Practice Clinic, DAB No. 1624, at 2 (1997); 42 C.F.R. � 493.2. HCFA may suspend, limit, or revoke the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions, and may also impose alternative sanctions such as a directed plan of correction or monitoring by the state. 42 C.F.R. � 493.1806.(3) A laboratory is entitled to a hearing before an ALJ to contest the imposition of CLIA remedies, including the suspension, limitation, or revocation of the laboratory's CLIA certificate, and may request review of the ALJ's decision by the Departmental Appeals Board. The CLIA regulations at 42 C.F.R. � 493.1844(a)(2) and (3) incorporate by reference the hearing procedures and the request for review provisions in 42 C.F.R. Part 498, Subparts D and E. Background The following background information is drawn from the ALJ Decision and the record before him. Garden City conducted high complexity testing for routine chemistry and endocrinology. At the time in issue, Nazar Sarafa, M.D., was Garden City's laboratory director. HCFA Ex. 7; ALJ Decision at 10. Debra Sabo was a member of Garden City's testing personnel, as well as part of the personnel working at other laboratories in the general vicinity. HCFA Ex. 7. She performed high complexity routine chemistry and endocrinology testing, as well as PT for Garden City. HCFA Exs. 7, 11-13. Some of the laboratories in the Detroit metropolitan area participating in a PT program operated by the American Association of Bioanalysts (AAB) were Garden City; Mark Hertzberg, M.D. (also known as Millenium Medical Group); Oakland Medical Group (also known as Moretsky/Trager/Flor); John Dunn, M.D.; Rochester Road Clinic; Liptawat Family, P.C.; Lakeland Medical; Ecorse Med Center; and Stanley Boykansky, M.D. HCFA Ex. 2. The AAB would mail to each laboratory participating in the PT program 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. Garden City was required to test the specimens for cholesterol, HDL cholesterol, triglycerides, glucose, thyroid stimulating hormone, total thyroxine, triiodothyronine, and free thyroxine. 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 suspect. HCFA Ex. 1 at 3-8. 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, M.D., Rochester Road Clinic, and Nazar Sarafa, M.D. (Garden City). HCFA Ex. 1. On January 14, 1999, the AAB notified MDCIS that it 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. 2. Based on the above information, on March 2, 1999, Lucy Estes, Laboratory Evaluation Specialist, MDCIS, performed a complaint survey at Garden City. 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; 42 C.F.R. � 493.1205(e)(1); 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 ALJ Decision at 4-5; HCFA Ex. 3 at 6-10. By letter dated July 9, 1999, HCFA served on Garden City a Notice of Medicare Cancellation, Suspension, and Revocation of CLIA Certificate of Accreditation pursuant to the MDCIS's referral of its case for imposition of enforcement action. Specifically, HCFA found that Garden City was not in compliance with the following CLIA statutory and regulatory requirements:
HCFA Ex. 3. Because of what it then characterized as Garden City's improper referral of PT samples to another laboratory for analysis and other serious deficient test practices found during the survey, HCFA imposed the principal sanctions of cancellation of Garden City's approval to receive Medicare payment for its laboratory services and revocation of Garden City's CLIA certificate of accreditation. HCFA Ex. 3. On October 15, 1999, HCFA served Garden City with a final and more complete notice of adverse action. Addressed to Dr. Sarafa, this letter stated, in pertinent part:
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ANALYSIS | |
Before the Board, Garden City labeled as "simply false" HCFA's assertions that Garden City had never asked to call witnesses, never submitted affidavits, never asked to cross-examine witnesses, and never challenged the authenticity or relevance of HCFA's exhibits. Garden City noted that it had proposed an evidentiary hearing for the purposes of cross-examining witnesses and was denied that right by the ALJ. Garden City asserted that the ALJ's action denied it the opportunity to cross-examine HCFA's witnesses and test the reliability of their testimony. Garden City Reply Br. at 1-2. We conclude that there is merit to Garden City's argument. The ALJ committed a procedural error that prejudiced Garden City when he denied its request for an evidentiary hearing on the ground that Garden City raised no genuine dispute of material fact. Both the statute and the regulations confer upon a provider who has received an initial determination the right to a hearing. See section 353 of the Public Health Service Act; 42 U.S.C. � 263a(i)(1); 42 C.F.R.� 493.1844(a). The Board has interpreted these provisions as giving an appellant the right to an opportunity for an in-person hearing where the appellant shows that there are material facts in dispute for which testimonial evidence is required. Everett Rehabilitation and Medical Center, DAB No. 1628 at 3 (1997), citing Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994). In the present case, the failure to permit cross-examination of affiants whose testimony was challenged reduces the reliability of that testimony such that, unless there is other substantial evidence supporting the ALJ's decision, we must reverse and remand the case. As we explain below, there is not sufficient other evidence to support the ALJ's FFCLs, and we therefore reverse and remand. In his discussion of why he found summary judgment appropriate for this case, the ALJ did not address Garden City's assertion in its Readiness Report that it was requesting an evidentiary hearing to cross-examine the two witnesses, one an employee of HCFA and the other an employee of the AAB, upon whose statements HCFA and the ALJ relied in reaching the conclusion that Petitioner was out of compliance with CLIA requirements. Several of the contentions raised by Garden City in its response to HCFA's motion for summary judgment made it clear that Garden City disputed the facts alleged in the affidavits provided by HCFA as support for its position and raised questions about the affiants' qualifications and the data upon which they based their opinions. Garden City Medical Clinic's Reply to HCFA's Motion for Summary Affirmance at 19-23. While an ALJ may rely upon written statements as evidence where an appellant has not availed itself of the opportunity for cross-examination provided in the applicable administrative procedures, Richardson v. Perales, 402 U.S. 389 (1971), once cross-examination is requested, the ALJ must either grant the request or explain why cross-examination is not required.(4) Failing that, the ALJ could not reasonably rely upon the affiants' testimony as "undisputed." Consequently, we must remand this case to the ALJ unless there exists other substantial evidence supporting his FFCLs. There were two other items of evidence cited by the ALJ in support of his conclusion that Garden City engaged in unlawful collaboration with other laboratories (which in turn supported his conclusion as to Garden City's noncompliance with the laboratory director condition).(5) These were the alleged inconsistency of Garden City's work papers with its reported PT results and its alleged admission that its laboratory employee had used the data from another laboratory as Garden City's PT results. ALJ Decision at 13-15. Neither of these items is sufficient to support the ALJ's conclusion. With respect to Garden City's work papers, the ALJ's finding that they are inconsistent with its reported PT results is also based upon testimony of an affiant. See ALJ Decision at 11 (citing HCFA Ex. 16). Although Garden City did not challenge the authenticity of the work papers, the affiant's opinion was based in part upon calculations performed by him using Garden City's data, not just a simple comparison of numbers listed as results. HCFA Ex. 16 at 5-8. In light of Garden City's request to cross-examine the affiant as to the data supporting his opinion, and lacking any indication that the ALJ performed these calculations for himself, we cannot sustain this finding. Finally, we agree with Garden City that the statement by Garden City's counsel that the ALJ held to be an admission by Garden City that it had engaged in collaboration and inter-laboratory communications was not an admission. That statement, contained in a July 22, 1999 letter to HCFA, was: "This case is most unusual in that one employee worked for a number of unaffiliated laboratories. This employee, acting on her own, without the knowledge of her employer, allegedly used the data from tests done at one of the laboratories for all of her employers' proficiency examinations." HCFA Ex. 17 at 2 (emphasis added). It is clear from the context of this letter and the overall context of the proceedings before the ALJ that this statement, which contains the word "allegedly," was made as a part of Garden City's argument in the alternative that, even if HCFA successfully established that the employee had behaved in this manner, a lesser penalty should be imposed upon Garden City. Elsewhere, in this letter and in the pleadings before the ALJ and this Board, however, Garden City has repeatedly asserted that the PT tests in question were performed by its employee in the same manner as all patient testing and that she signed PT reporting forms reporting the results properly. Garden City Br. at 17. Consequently, we conclude that this statement is not an admission by Garden City that it collaborated with other laboratories during the 1998 PT testing events. Consequently, we reverse the ALJ Decision and remand this case to the ALJ for further proceedings. Given the heavy reliance placed by the ALJ on the testimony of HCFA's affiants, the ALJ should address Garden City's request for an opportunity to cross-examine those witnesses. We, therefore, remand this case for further proceedings in accordance with our decision. |
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JUDGE | |
Judith A. Ballard Donald F. Garrett M. Terry Johnson |
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FOOTNOTES | |
1. We note that this is the third appeal to come before us based on HCFA's finding of irregularities in 1998 PT results reported by nine physician laboratories in the metropolitan Detroit area. See Oakland Medical Group, P.C., DAB No. 1755 (2000) and Stanley Boykansky, M.D., DAB No. 1756 (2000). Some of the issues raised in Garden City's current exceptions to the substance of the ALJ Decision are similar to those raised and resolved in Oakland and Boykansky. 2. HCFA may deem a laboratory to meet all applicable CLIA program requirements if the laboratory obtains a certificate of accreditation, as required in 42 C.F.R. Part 493, Subpart D, and meets the other requirements listed in 42 C.F.R. � 493.551(b). 3. These remedies are also available if a laboratory with a certificate of accreditation fails to meet the requirements of 42 C.F.R. � 493.61, including the requirement that it treat the PT samples in the same manner as patient samples. 42 C.F.R. �� 493.61(b)(1) and (c). 4. We note that in Richardson v. Perales the appellant had asked for cross-examination of witnesses whose written statements were cited by the ALJ but had not requested subpoenas. The Court determined that failure to request subpoenas in that case amounted to a waiver of cross-examination. In this case, the ALJ did not address Garden City's request for cross-examination, much less determine that it had been waived. 5. The ALJ also relied upon the failure of Garden City to proffer affidavits or other documentary evidence that if taken as true would create a genuine issue of material fact that would require a hearing. FFCL 16. However, the record before the ALJ included PT test reporting documents submitted by HCFA (HCFA Exs. 8-13) that all include the following statement, signed by the laboratory employee that Garden City alleged properly performed the testing: "THE UNDERSIGNED ANALYST ATTESTS THAT SAMPLES WERE TESTED IN THE SAME MANNER AS PATIENT SAMPLES." See, e.g., HCFA Ex. 8, at 2 (capitalization in original). Garden City's laboratory director signed these documents as well. The characterization of the act of signing such documents as attesting to specific facts was sufficient to put into dispute HCFA's expert's testimony that testing was not performed as required. |
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