Fort Wayne Women's Health, DAB CR5228 (2019)

DECISION

The Clinical Laboratory Improvement Amendments of 1988 (CLIA) certificate of Petitioner, Fort Wayne Women’s Health, is revoked for two years because Petitioner’s laboratory director, Ulrich G. Klopfer, DO, was barred from operating a laboratory for two years.

I.  Background

The Centers for Medicare & Medicaid Services (CMS) notified Petitioner by letter dated December 18, 2015, that its CLIA certificate was being revoked.  CMS advised Petitioner that the revocation was because Petitioner’s owner and operator, Dr. Klopfer, was the owner and operator of Women’s Pavilion when its CLIA certificate was revoked, and Dr. Klopfer was ineligible to own, operate, or direct another laboratory for two years after the Women’s Pavilion CLIA certificate revocation, that is, during the period November 25, 2015 through November 24, 2017.  CMS Exhibit (Ex.) 4.

Petitioner requested a hearing by an administrative law judge (ALJ) on January 4, 2016.  The case was assigned to me and I issued an Acknowledgment and Prehearing Order on January 20, 2016.  On February 22, 2016, CMS filed a motion for summary judgment (CMS Br.) with CMS Exs. 1 through 10.  On March 17, 2016, Petitioner filed a response

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(P. Br.) to the CMS motion and no exhibits.  Petitioner did not object to my consideration of CMS Exs. 1 through 10 and they are admitted as evidence.  Further proceedings were stayed on March 23, 2016, upon motion of the parties pending disposition of the CMS motion.

II.  Discussion

A.  Applicable Law

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.).  Pursuant to 42 U.S.C. § 263a(b):

No person may solicit or accept materials derived from the human body for laboratory examination or other procedure unless there is in effect for the laboratory a certificate issued by the Secretary [of Health & Human Services] under this section applicable to the category of examination or procedures which include such examination or procedure.

The purpose of CLIA is to ensure the accuracy and reliability of laboratory tests and the public health of all Americans.  See H.R. Rep. No. 899, 100th Cong. 2d Sess. 8, 18, as reprinted in 1988 U.S.C.C.A.N. 3828, 3839.  CMS certifies a laboratory under CLIA only if it meets statutory and regulatory requirements.  42 U.S.C. § 263a(f)(1); 42 C.F.R. pt. 493.1 Pursuant to CLIA, the Secretary of the Department of Health and Human Services (Secretary) has broad, discretionary, enforcement authority, including the authority to impose intermediate sanctions or suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more requirements for certification.  42 U.S.C. § 263a(h), (i).

Implementing regulations issued by the Secretary specify standards and the specific conditions of certification that a laboratory must meet.  42 C.F.R. pt. 493.  The regulations confer broad, discretionary, authority on CMS to ensure that laboratories perform as Congress intended, including authority to inspect and sanction laboratories that fail to comply with the regulatory requirements.  CMS has the delegated authority to impose the principal sanction of suspension, limitation, or revocation of the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions, and may also impose alternative (referred to as intermediate sanctions in 42 U.S.C.

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§ 263a(h)) sanctions, such as a civil money penalty, directed plan of correction, or state monitoring.  42 C.F.R. § 493.1806.

CLIA provides the following with respect to the owners and operators of non‑compliant laboratories:

(3) Ineligibility to own or operate laboratories after revocation

No person who has owned or operated a laboratory which has had its certificate revoked may, within 2 years of the revocation of the certificate, own or operate a laboratory for which a certificate has been issued under this section.

42 U.S.C. § 263a(i)(3) (emphasis in original).  Therefore, Congress has prohibited any person from owning or operating a laboratory with a CLIA certificate, if that person owned or operated another laboratory that had its CLIA certificate revoked within the preceding two years.  The plain language of the statute shows that this prohibition on owning or operating a laboratory for two years is automatic and requires no action by the Secretary or CMS to impose.  The Secretary has defined the term “operator” to include a laboratory director:

Operator means the individual or group of individuals who oversee all facets of the operation of a laboratory and who bear primary responsibility for the safety and reliability of the results of all specimen testing performed in that laboratory.  The term includes –

(1)  A director of the laboratory if he or she meets the stated criteria.

42 C.F.R. § 493.2 (emphasis in original).  The plain language of the regulation is that the “stated criteria” a laboratory director must meet to be considered an operator are that he or she is responsible to “oversee all facets of the operation of a laboratory and . . . bear[s] primary responsibility for the safety and reliability of the results of all specimen testing performed in that laboratory.”  Id.

The Secretary has delegated to CMS the discretion to suspend, limit, or revoke a laboratory’s CLIA certificate based on the actions of a laboratory owner, operator, or employee:

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(a)  CMS may initiate adverse action to suspend, limit or revoke any CLIA certificate if CMS finds that a laboratory’s owner or operator or one of its employees has –

* * * *

(8)  Within the preceding two-year period, owned or operated a laboratory that had its CLIA certificate revoked.  (This provision applies only to the owner or operator, not to all of the laboratory’s employees.)

42 C.F.R. § 493.1840(a)(8) (emphasis added).  Congress granted a laboratory owner, operator, or director a right to reasonable notice and an opportunity for hearing in the event the Secretary or CMS determines to suspend, limit or revoke a laboratory’s CLIA certificate.  42 U.S.C. § 263a(i)  The Secretary has provided for a hearing by an ALJ and review by the Departmental Appeals Board (Board) under the procedures established by 42 C.F.R. pt. 498, subpts. D and E, for initial determinations listed in the CLIA regulations.  42 C.F.R. § 493.1844.  The “suspension, limitation or revocation of the laboratory’s CLIA certificate . . . because of noncompliance” is an initial determination for which a hearing by an ALJ is authorized.  42 C.F.R. § 493.1844(b)(1).

CMS notified Petitioner that its CLIA certificate is being revoked.  Petitioner has a right to request a hearing before an ALJ, and Petitioner timely requested a hearing.  I conclude that this matter is properly before me for decision.

B.  Issues

Whether summary judgment is appropriate.

Whether there is a basis for revocation of Petitioner’s CLIA certificate.

C.  Findings of Fact, Conclusions of Law, and Analysis

1.  Summary judgment is appropriate.

Summary judgment is not addressed in 42 C.F.R. pt. 498.  However, the Board has long recognized the availability of summary judgment in cases subject to 42 C.F.R. pt. 498 and the Board’s interpretative rule has been recognized by the federal courts.  See e.g.,  Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 749-50 (6th Cir. 2004).  Furthermore, a summary judgment procedure was adopted as a matter of judicial economy within my authority to regulate the course of proceedings and made available to the parties in the litigation of this case by my Prehearing Order.  The parties were given notice by the Prehearing Order that summary judgment is an available procedural device

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and that the law as it has developed related to Fed. R. Civ. Pro. 56 will be applied.  Prehearing Order ¶ II.D.3.

Summary judgment is appropriate and no oral hearing is required where either:  there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law, even if, all disputed facts are resolved in favor of the party against whom the motion is made.  The Board follows the general approach of the federal courts in evaluating whether or not summary judgment in lieu of a hearing is appropriate.  The movant bears a heavy initial burden of demonstrating that there are no genuine issues of material fact for trial as to any element of the movant’s prima facie case and that the movant is entitled to judgment as a matter of law.  When confronted with a properly supported motion for summary judgment, the nonmoving party “may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First Nat’l Bank of Az. v. Cities Serv. Co., 391 U.S. 253, 249 (1968)); Fed. R. Civ. P. 56(c); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001), Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997) (in-person hearing required where nonmovant shows there are material facts in dispute that require testimony); Big Bend Hosp. Corp., DAB No. 1814 at 13 (2002) (in some cases, any factual issue is resolved on the face of the written record because the proffered testimony, even if accepted as true, would not make a difference).  In opposing the motion for summary judgment, the nonmovant bears the burden of showing that there are material facts that are disputed either affecting the movant’s prima facie case or that might establish a defense.  It is insufficient for the nonmovant to rely upon mere allegations or denials to defeat the motion and proceed to hearing.  The nonmovant must, by affidavits or other evidence that set forth specific facts, show that there is a genuine issue for trial.  If the nonmovant cannot show by some credible evidence that there exists some genuine issue for trial, then summary judgment is appropriate and the movant prevails as a matter of law.  Anderson, 477 U.S. at 247.  A test for whether an issue is regarded as genuine is if “the evidence [as to that issue] is such that a reasonable jury could return a verdict for the nonmoving party.”  Id. at 248.  In evaluating whether there is a genuine issue as to a material fact, an ALJ must view the facts and the inferences to be drawn from the facts in the light most favorable to the nonmoving party.  Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

In this case, CMS has moved for summary judgment and asserted that there is no genuine dispute as to any material fact.  CMS Br.  Petitioner does not oppose summary judgment or allege that there are specific material facts that are genuinely in dispute.  P. Br.  I conclude that there is no genuine dispute as to any material fact and summary judgment is appropriate in this case.

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2.  A person, including a laboratory director, who operated a laboratory that had its CLIA certificate revoked may not own or operate another CLIA‑certified laboratory for two years.  42 U.S.C. § 263a(i)(3).

3.  There is a basis to revoke Petitioner’s CLIA certificate pursuant to 42 C.F.R. § 493.1840(a)(8) because Petitioner’s laboratory director of record, Dr. Klopfer, was prohibited by 42 U.S.C. § 263a(i)(3) from owning or operating any laboratory from November 25, 2015 through until November 24, 2017.

a.  Facts

Petitioner is an abortion clinic in Indiana.  CMS Ex. 1.  Petitioner’s application for a CLIA Certificate dated January 29, 2015, and its Certificate of Compliance, effective July 23, 2013 to July 22, 2015, list Ulrich G. Klopfer, DO, as Petitioner’s laboratory director.  CMS Exs. 1, 3.  Dr. Klopfer is also listed as the president or highest officer for the business entity with the same address as Petitioner, 2210 Inwood Drive, Fort Wayne, Indiana.  CMS Ex. 2.

Dr. Klopfer was also the laboratory director of Women’s Pavilion, another clinic located in South Bend, Indiana.  CMS Ex. 10.  On April 8, 2015, CMS notified Dr. Klopfer, in his capacity as laboratory director of Women’s Pavilion, that the Women’s Pavilion CLIA certificate was being revoked for noncompliance with a CLIA condition of participation.  CMS Ex. 5.  Women’s Pavilion requested a hearing before an ALJ, but the case was subsequently dismissed for abandonment.  CMS Exs. 6-8.  On December 10, 2015, CMS notified the Women’s Pavilion that its CLIA certificate Number 15D0709934 was revoked effective November 25, 2015, and that the regulations:

[P]rohibit the owner(s) or operator(s) (including director. . .) from owning or operation (or directing) a laboratory for at least two years from the date of the revocation.  This prohibition applies to the owner(s) as well as the director at the time that the deficiencies were found which led to the current sanction actions.  The two year period is in effect from November 25, 2015 to November 24, 2017.

CMS Ex. 9 (emphasis in original).

CMS notified Dr. Klopfer as laboratory director for Petitioner on December 18, 2015, that Petitioner’s CLIA certificate was being revoked.  CMS advised Petitioner that the revocation was based on the fact Dr. Klopfer was prohibited from owning, operating, or

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serving as laboratory director for a CLIA certified laboratory from November 25, 2015 through November 24, 2017.  CMS Ex. 4

Petitioner does not dispute that:

The Women’s Pavilion CLIA certificate was revoked effective November 25, 2015;

Dr. Klopfer was the laboratory director for the Women’s Pavilion when its CLIA certificate was revoked;

Dr. Klopfer was notified of the revocation of the Women’s Pavilion CLIA certificate and the fact he was prohibited from owning, operating, or directing another CLIA certified laboratory for two years from November 25, 2015 through November 24, 2017;

It is not disputed that Dr. Klopfer was Petitioner’s laboratory director on December 18, 2015; and

It is not disputed that Dr. Klopfer met the definition of “operator” under 42 C.F.R. § 493.2, that is, he oversaw the operation of Petitioner and bore primary responsibility for the safety and reliability of test results produced by the laboratory.  RFH; P. Br.

b.  Analysis

Petitioner does not dispute that, based on the foregoing facts, Dr. Klopfer was prohibited as a matter of law by 42 U.S.C. § 263a(i)(3), from owning, operating, or directing another laboratory during the two years following revocation of the Women’s Pavilion CLIA certificate on November 25, 2015.  Petitioner also does not contest that Petitioner’s CLIA certificate is subject to revocation because Dr. Klopfer continued as its laboratory director after November 25, 2015.  RFH; P. Br.

Petitioner argues that it “followed all the requirements that CLIA demanded of the lab and that they were documented.”  RFH at 1.  Petitioner also argues that it was certified as compliant from 2008 through 2014 and that as of December 2013 it limited its laboratory work.  P. Br.  I accept these assertions as true for purposes of summary judgment.  However, whether Petitioner previously followed all CLIA regulations, previously held a valid certificate, or limited its scope of testing does not affect the outcome in this case.  Dr. Klopfer was barred by CLIA from owning or operating Petitioner, but Dr. Klopfer continued as Petitioner’s laboratory director.  Petitioner’s CLIA certificate is subject to revocation on that basis.  Accordingly, I conclude that there is a basis to revoke Petitioner’s CLIA certificate pursuant to 42 C.F.R. § 493.1840(a)(8).

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III.  Conclusion

For the foregoing reasons, Petitioner’s CLIA certificate is revoked for two years.

• 1. Citations are to the 2015 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.