Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oakland Medical Group, P.C., |
DATE: July 18, 2000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Health Care Financing Administration
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Docket No.C-99-731
Decision No. CR688 |
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DECISION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I enter summary judgement in favor of the
Health Care Financing Administration (HCFA) sustaining HCFA's determination
to impose remedies against Petitioner, Oakland Medical Group, P.C., under
the Clinical Laboratory Improvement Amendments of 1988 (CLIA). HCFA properly
revoked Petitioner's CLIA certificate for a period of one year. HCFA properly
canceled Petitioner's approval to receive Medicare payment for its services,
effective October 1, 1999. 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,
100th Cong., 2nd 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:
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:
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 (3rd 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
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.
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.
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.
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:
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:
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:
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.
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.
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:
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):
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:
Table No. 1 (First Testing Event of 1998)
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:
Table No. 2 (Third Testing Event of 1998)
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.
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.
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.
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.
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.
This issue has been discussed in Part VI(A)(7), above.
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. |
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JUDGE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jose A. Anglada Administrative Law Judge
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FOOTNOTES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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. |
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