Albert Cohen, M.D., DAB CR5616 (2020)

DECISION

This case was transferred to me from another administrative law judge.  The case file included a fully briefed but undecided motion for summary judgment.  I have reviewed the record and the parties' arguments.  I issue summary judgment in favor of the Centers for Medicare & Medicaid Services (CMS) and against Petitioner, Albert Cohen, M.D. (Petitioner Cohen), affirming CMS's determination to prohibit Petitioner from owning, operating, or directing any clinical laboratory for a period of two years from the date of revocation of the CLIA certificates of Delray Medical Center, Inc. d/b/a Delray Medical Center, and Emergency Center Lake Worth, a Department of Delray Medical Center.1

I.  History

The history of this case is a bit complicated, but as I discuss below, the facts and legal questions raised by the parties are not.

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Delray Medical Center (Delray) is a clinical laboratory certified pursuant to CLIA.  Another clinical laboratory, Emergency Center Lake Worth (Lake Worth), is affiliated with Delray.  In 2016, Petitioner was Delray's director.  In 2017, CMS determined to revoke Delray's CLIA certificate, premised on the finding that, on two occasions in 2016, Delray had referred clinical proficiency testing samples to Lake Worth for processing and had reported the results of the tests conducted by Lake Worth as its own, in violation of CLIA and applicable regulations.  CMS also imposed a civil money penalty against Delray and cancelled its approval to receive Medicare reimbursement.  Additionally, CMS imposed a directed plan of correction against Lake Worth and a civil money penalty against that laboratory as well.  Finally, CMS prohibited Petitioner Cohen, who was at the time the director of Delray, from owning, operating, or directing any other clinical laboratory for a period of two years.

Both laboratories and Petitioner requested hearings, and their hearing requests were docketed separately.  The parties requested that the cases be consolidated, and the administrative law judge then assigned to hear and decide the cases ordered that they be consolidated.

CMS then filed a motion for summary judgment directed against all three Petitioners.  The Petitioners opposed the motion for summary judgment.  The parties fully briefed the issues.  Before the administrative law judge then assigned to the case could decide it, Delray and Lake Worth entered into a settlement with CMS and withdrew their hearing requests, leaving only Petitioner Cohen as a party requesting a hearing.

The attorneys that had represented Delray, Lake Worth, and Petitioner Cohen withdrew as Petitioner Cohen's counsel.  Petitioner Cohen obtained new counsel.  The administrative law judge then assigned to the case allowed Petitioner Cohen's counsel to file a supplemental pre-hearing exchange, including a new brief addressing the motion for summary judgment and additional exhibits.  CMS replied to the supplemental exchange, and Petitioner Cohen's counsel filed a response to CMS's reply.  Counsel filed that last brief on June 26, 2018.  The case has lain fallow since then.  It was reassigned to me on April 20 of this year.

The several parties have filed exhibits and supplemental exhibits.  It is unnecessary that I decide whether to receive these exhibits into evidence inasmuch as I find no disputed issues of material fact.  However, I refer to some of these exhibits to illustrate facts that are undisputed.

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II.  Issue, Findings of Fact, and Conclusions of Law

A. Issue

The issue is whether CMS may prohibit Petitioner Cohen from owning, operating, and directing a clinical laboratory for a two-year period.

B. Findings of Fact and Conclusions of Law

A clinical laboratory certified pursuant to CLIA must enroll in a proficiency testing program approved by the Secretary of the Department of Health and Human Services "for each of the specialties and subspecialties for which it seeks certification."  42 C.F.R. § 493.801.  Proficiency testing is intended to assure that the laboratory is competent to perform those tests for which it is certified.  Lackawanna Med. Grp. Lab., DAB No. 1870 (2003).  In order to comply with this requirement, the laboratory contracts with a proficiency testing organization, which sends proficiency testing samples to the laboratory quarterly.  CMS Ex. 8 at ¶ 4; but see P. Ex. 1 at ¶ 19 (describing "three testing events per year.").  The laboratory tests each sample on its premises and reports the results to the proficiency testing organization.  CMS Ex. 8 at ¶ 4.

The laboratory is prohibited from referring proficiency testing samples to another laboratory for testing.  If the laboratory intentionally refers proficiency testing samples, CMS may revoke the laboratory's CLIA certificate.  42 U.S.C. § 263a(i)(4).  When a laboratory's certificate is revoked, the laboratory's owner, operator, or director may not own or operate a clinical laboratory for a two-year period following the revocation.  42 U.S.C. § 263a(i)(3); 42 C.F.R. §§ 493.2; 493.1840(a)(8).

The following facts are undisputed.  Delray and Lake Worth were both owned by Delray Medical Center.  Petitioner Cohen was the director of Delray.  Delray and Lake Worth were separately certified pursuant to CLIA.  CMS Ex. 1.  Each laboratory was therefore required to test proficiency testing samples independently and not in conjunction with the other laboratory, in order to maintain its CLIA certification.  Id.

Both Delray and Lake Worth were certified to perform specific tests for the presence of Human Respiratory Syncytial Virus (RSV).  On two occasions in 2016, five months apart from one another, Delray sent proficiency testing samples for RSV to Lake Worth, which performed the proficiency tests for these samples.  Delray reported the results of these proficiency tests as if it had performed them.  CMS Ex. 1; CMS Ex. 3; CMS Ex. 4 at 3; CMS Ex. 8 at ¶ 10; Petitioner Cohen's Supplemental Pre-hearing Exchange (Supplemental brief) at 10.

These undisputed facts plainly establish a violation of CLIA and its regulations.  These facts provide CMS with the authority to revoke Delray's CLIA certificates and,

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consequently, to bar Petitioner Cohen from owning, operating, or directing a clinical laboratory.

I have considered the arguments raised by Petitioner Cohen in opposition to CMS's determination, and I find them to be without merit.  I accept as true, for purposes of deciding the motion for summary judgment, the facts offered by Petitioner Cohen in response to that motion.  However, neither those facts nor the legal arguments that Petitioner Cohen raises establish a viable defense.

Petitioner Cohen's principal contention, which he contends constitutes unique facts that are a matter of first impression, is that the proficiency testing samples referred by Delray to Lake Worth were for tests that Delray did not perform and never had performed.  Supplemental brief at 2, 9-13.  From this, Petitioner Cohen argues the proficiency testing samples that are at issue were not Delray's samples.  Thus, according to Petitioner Cohen, the regulations governing proficiency testing were never triggered and do not apply to this case.  Id. at 4.

A clinical laboratory – and Petitioner Cohen – are not excused from the requirement to comply with proficiency testing requirements by the fact that a laboratory is not currently performing tests for which it is certified.  A laboratory must establish that it is proficient to perform all tests for which it is certified.  42 C.F.R. § 493.801.  That it might not actually be performing some of those tests does not excuse it from the duty to demonstrate proficiency to perform them.  42 U.S.C. § 263a(f)(3)(A).  Delray was certified to perform RSV testing.  In order to maintain its certification, it was obligated to comply with all proficiency testing requirements including that it – and not an affiliated but independently certified laboratory – actually perform the relevant proficiency tests.  Therefore, Delray's intentional referral of RSV testing samples to Lake Worth violated CLIA's prohibition against referrals even if Delray was not performing RSV testing at that time.  The governing regulation plainly states that a laboratory is prohibited from referring a proficiency testing sample "for any analysis for which it is certified to perform in its own laboratory."  42 C.F.R. § 493.801(b)(4).

Petitioner Cohen complains that the requirement that a clinical laboratory demonstrate proficiency in all tests for which it is certified imposes an unreasonable burden on the laboratory and would lead to an absurd outcome.  Hypothetically, according to Petitioner Cohen, a laboratory might be required to conduct proficiency testing for tests which it not only doesn't perform but for which it lacks the necessary equipment to perform.  Supplemental brief at 12.

In this case Delray made the choice to become certified for the subspecialty that included RSV testing.  It didn't have to do that.  However, once it decided to become certified in that subspecialty, it assumed the burden of establishing that it was proficient to perform the tests for which it was certified.  There is nothing unreasonable about requiring a

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laboratory to prove its proficiency for every test that it – as a matter of choice – decided to become certified to perform.

Next, Petitioner Cohen argues that sending proficiency testing samples from Delray to Lake Worth did not constitute "referrals" of these samples.  To support that assertion, Petitioner argues that "to refer" means bringing something to another person's attention in order to obtain information from that person.  Petitioner Cohen contends that Delray didn't seek information from Lake Worth because it needed no information from that laboratory concerning the RSV tests that it did not conduct.  Supplemental brief at 14.

This argument is belied by the undisputed facts, and Petitioner Cohen offered no facts to rebut these undisputed facts.  The undisputed facts are that, twice, Delray:  sent proficiency testing samples to Lake Worth; received test results from Lake Worth; and reported those test results as if it had performed them.

Petitioner Cohen argues that, if Delray referred testing samples to Lake Worth, he is not culpable because the referrals were not intentional.  Supplemental brief at 15-19.  He relies in part on the findings of the Joint Commission, which, according to Petitioner, investigated the referrals and found them to be unintentional.  Id. at 15.  Second, Petitioner attempts to distinguish from the present case other cases in which appellate panels of the Departmental Appeals Board found intentional referrals of proficiency testing samples.

Whatever the Joint Commission may have found, its findings on the issue of intent are not relevant here.  The Joint Commission's opinion is not binding on CMS.  Nor is there any evidence that the Joint Commission applied or even considered the regulatory definition of "intentional" in evaluating Delray's actions.

Second, the undisputed facts establish that Delray intentionally referred proficiency testing samples to Lake Worth within the meaning of CLIA, implementing regulations, and applicable Departmental Appeals Board decisions.  That is true even if Delray's staff was unaware that by doing so they were violating CLIA regulations and even if staff inadvertently entered the results of the referred tests into Delray's test reports.  Lackawanna Med. Grp. Lab., DAB No. 1870 (2003).  For regulatory purposes "intentional" means a deliberate referral of a testing sample.  It is no excuse that the referring laboratory believes that it is lawful to refer a testing sample.  A referral is intentional where a laboratory intends that another laboratory receive the sample and test it even if the referring laboratory operates under the misguided belief that it is doing so legitimately.  Victor Valley Cmty. Hosp., DAB No. 2340 at 6-7 (2010).

The referrals plainly were intentional.  Delray intended to send RSV testing samples to Lake Worth.  The undisputed facts establish that Delray assumed that Lake Worth would

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conduct proficiency tests on those samples.  Delray's staff received the results of those tests from Lake Worth and reported them as if Delray had done the tests.

Petitioner Cohen claims that not "a single fact" supports CMS's allegation that Delray sent proficiency testing samples to Lake Worth "for analysis."  Supplemental brief at 17.  I disagree.  The only inference that I can possibly draw from the undisputed facts is that Delray's staff assumed that Lake Worth would conduct proficiency tests on the samples that were sent to it.  There is absolutely no other rational conclusion that I might draw from the act of sending proficiency testing samples from Delray to Lake Worth.

I note that Petitioner Cohen has not offered a single fact showing that Delray sent proficiency testing samples to Lake Worth for any reason other than "for analysis."

Petitioner Cohen asserts that Delray could not have intentionally referred proficiency testing samples to Lake Worth "for analysis" inasmuch as it was not conducting clinical tests for RSV.  Supplemental brief at 18.  Evidently, Petitioner Cohen means by this assertion that Delray didn't care about the test results obtained by Lake Worth because it wasn't doing the type of tests that were the subject of the proficiency testing samples.  That argument essentially restates Petitioner Cohen's assertion that Delray, and he, could not be found culpable because a laboratory cannot be found to have referred proficiency testing samples for tests that it does not conduct.  I have explained why this argument is incorrect and I need not address it again.

It is not exculpatory that Delray's staff may have misunderstood the testing and reporting requirements.  Nor is it exculpatory that Delray's staff may have assumed that Lake Worth was the appropriate laboratory to perform proficiency testing inasmuch as it was conducting clinical tests for RSV and Delray was not.  Even honest errors by Delray's staff do not defend against the fact that it sent proficiency testing samples that had been directed to Delray to Lake Worth so that Lake Worth could perform the tests.

Nor is it exculpatory that Delray reported its referral as soon as its management discovered it.  That reporting does not gainsay the fact that Delray referred proficiency testing samples, twice, and reported proficiency testing results as its own, in violation of applicable law and regulations.

Petitioner Cohen challenges CMS's finding that he failed to perform his duties as a laboratory director as defined at 42 C.F.R. § 493.1441.  Supplemental brief at 20-21.  This regulation requires, in part, that a clinical laboratory director provide overall management and direction in accord with the requirements of CLIA and implementing regulations.

Petitioner Cohen's compliance or lack of compliance with this regulatory requirement is not the legal authority for CMS's imposition of a bar on his owning, operating, or

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directing a clinical laboratory.  That authority is a direct consequence of Delray's unlawful referral of proficiency testing samples to Lake Worth.  42 U.S.C. § 263a(i)(3); 42 C.F.R. §§ 493.2; 493.1840(a)(8).  For that reason, I do not address the question of whether Petitioner Cohen complied with 42 C.F.R. § 493.1441.

Finally, Petitioner Cohen asserts that CMS's determination to bar him from owning, operating, or directing a clinical laboratory for a two-year period was arbitrary, capricious, and an abuse of discretion.  Supplemental brief at 23-25.  I do not have authority to address this argument.  I may decide whether CLIA and governing regulations give CMS authority to impose whatever remedies it determines to impose.  I may not question CMS's wisdom and judgment in doing so.  Here, CMS's authority emanates directly from the regulations.

1. The acronym "CLIA" stands for "Clinical Laboratory Improvement Amendments," codified at 42 U.S.C. § 263a, and applicable regulations at 42 C.F.R. Part 493.
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