SUBJECT:

Lyle Griffith, M.D. (Laboratory),

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

The Petitioner in this case, Lyle Griffith Laboratory (Petitioner or lab) is a California clinical laboratory owned and operated by Lyle Griffith, M.D. It has been certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. � 263a et seq. Petitioner appeals the decision of the Centers for Medicare & Medicaid Services (CMS) to revoke its CLIA certificate, cancel its approval to receive Medicare payments, and impose a substantial civil money penalty (CMP).

The parties have filed cross-motions for summary judgment. For the reasons discussed below, I deny Petitioner's motion for summary judgment, and grant CMS's motion, sustaining its determinations and the imposition of penalties.

I. Background

In order to ensure the accuracy and reliability of laboratory tests, and thus the health and safety of those tested, CLIA creates a federal certification process for laboratories that perform clinical diagnostic tests on human specimens. Pub. L. No. 100-578, amending section 353 of the Public Health Service Act, codified at 42 U.S.C. � 263a et seq.; see H.R. Rep. No. 100-899, at 8 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3829. To be certified, a laboratory must meet the conditions of certification set out in the statute and regulations. 42 U.S.C. � 263(a)(f)(1)(E); 42 C.F.R. � 493.1 et seq. The statute gives the Secretary of Health and Human Services (Secretary) broad enforcement authority, including the authority to suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more conditions. Each condition represents a major division of laboratory services or required environmental protections, and standards are specific components of the conditions. RNA Laboratories, Inc., DAB No. 1820, at 3 (2002).

The Secretary has delegated to CMS the responsibility for CLIA enforcement. CMS or its designee conducts periodic inspections to determine a laboratory's compliance with CLIA requirements. 42 C.F.R. � 493.1777. CMS 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, state monitoring, or a CMP. 42 C.F.R. � 493.1806; RNA Laboratories, DAB No. 1820, at 3; Ward General Practice Clinic, DAB No. 1624, at 2 (1997).

Here, following a recertification survey completed August 25, 2004, the California Department of Health Services, Laboratory Field Services (State Agency) determined that the lab was out of compliance with seven CLIA conditions and various standard-level requirements. CMS Exhibit (Ex.) 1. By letter dated September 17, 2004, the State Agency instructed the lab to correct all of its condition-level deficiencies, affording it ten days in which to submit acceptable evidence of correction and a credible allegation of its compliance. CMS Ex. 4, at 2. The letter warned that, if the lab failed to correct its condition-level deficiencies, the State Agency would recommend that CMS impose sanctions, including revocation of the lab's CLIA certificate. CMS Ex. 4, at 2-3. At Petitioner's request, the State Agency allowed the lab an additional ten days for response. CMS Ex. 4, at 4.

Petitioner submitted its response, which the State Agency determined did not include acceptable evidence that the lab had corrected its deficiencies, and was not a credible allegation of compliance. In a letter dated December 16, 2004, the State Agency so advised Petitioner, and recommended that CMS impose sanctions. CMS Ex. 4, at 5-6.

CMS agreed with the State Agency's findings and recommendations, and, after allowing the lab an additional opportunity to show why sanctions should not be imposed (CMS Ex. 5), imposed the following sanctions: 1) revocation of the lab's CLIA certificate; ⁽¹⁾ 2) a $3,000 per day CMP for each day of noncompliance, effective January 6, 2005; 3) a directed plan of correction, directing the lab to cease all testing effective January 6, 2005, and to submit to CMS a list of the names and addresses of clients who had used the lab's services since October 2002 (so that CMS could inform them of the lab's noncompliance); and 4) cancellation of the lab's approval to receive Medicare payments for any services performed on or after January 6, 2005. CMS Ex. 6.

Petitioner appeals. The parties have filed cross-motions for summary disposition accompanied by witness declarations and other exhibits. ⁽²⁾ CMS asks that I consider 14 of its 21 proposed exhibits, CMS Exs. 1-9, and 17-21. CMS Opp. Br., at 1. With its motion, Petitioner has filed seven exhibits (P. Exs. 1-7). For the purpose of resolving these motions, I admit into evidence CMS Exs. 1-9 and 17-21 and P. Exs. 1-7.

II. Issues

I first consider whether summary disposition is appropriate.

On the merits, the question is whether Petitioner failed to comply with one or more CLIA conditions of participation, thereby giving CMS the authority to impose remedies, including the revocation of Petitioner's CLIA certificate and the cancellation of Petitioner's approval to receive Medicare payments.

Because I find at least one condition-level deficiency, CMS may impose sanctions (42 C.F.R. � 493.1804(b)), and its choice of alternative sanctions, including the amount of a CMP, is not an initial determination reviewable in this forum. 42 C.F.R. � 493.1844(c)(4). See discussion below.

III. Discussion

A. Summary disposition is appropriate where, as here, Petitioner has not demonstrated any dispute regarding genuine issues of material fact. ⁽³⁾

Summary disposition is appropriate where there are no disputed issues of material fact and where the only questions that must be decided involve either questions of law or the application of the law to the undisputed facts. Livingston Care Center, DAB No. 1871, at 6 (2003). A party opposing summary disposition must allege facts that, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c); Garden City Medical Center, DAB No. 1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997) (in-person hearing required where only non-movant shows there are material facts in dispute that require testimony). A party may not simply state that it disputes allegations of fact in order to avoid the entry of summary disposition; it must describe the asserted facts credibly in order to establish a dispute.

CMS is requesting summary affirmance here, asserting that no material facts are in dispute with respect to two of the cited condition-level deficiencies: 1) the lab did not successfully participate in an approved proficiency testing (PT) program (42 C.F.R. � 493.803); and 2) the laboratory director did not fulfill his responsibilities under 42 C.F.R. � 493.1403. CMS alleges, and presents evidence to establish, that, for one routine analyte, ⁽⁴⁾ the lab failed to achieve satisfactory PT scores during the first and third testing events of 2003. CMS also alleges, and presents evidence to establish, that the lab director, Dr. Griffith, was not even aware of the lab's PT errors, did not follow up on the problems, and thus failed to provide the lab with the necessary management and administration. See discussions below.

Petitioner has not challenged these assertions. See, e.g., P.'s Hearing Request; CMS Ex. 7. Instead, it questions the agencies' motives in imposing these sanctions, and complains about the quality of the state survey, and the refusals by the State Agency and CMS either to accept its plan of correction or to assist the lab in addressing its deficiencies. I find that these, at best, marginally relevant accusations are simply not material to the question of the lab's compliance with CLIA conditions. Inasmuch as Petitioner has alleged no material fact in dispute on this critical question, CMS is entitled to summary judgment if it establishes that, based on the undisputed facts, it is entitled to judgment as a matter of law. I now address that question of law.

B. Petitioner was not in substantial compliance with 42 C.F.R. � 493.803 because, for two out of three consecutive testing events, it failed to achieve a satisfactory score for each analyte tested.

A laboratory that holds a CLIA certificate of accreditation may perform moderate and high complexity tests, but it must participate in a proficiency testing program as outlined in 42 C.F.R. Part 493, Subpart H. This is a condition-level requirement. See 42 C.F.R. � 493.2 (any of the requirements identified as "conditions" in subparts G through Q of Part 493 is a condition-level requirement). Under the provisions of Subpart H, each laboratory must enroll in an approved PT program that meets specific criteria set out at Subpart I of Part 493. 42 C.F.R. � 493.801. A laboratory performing high complexity testing "must successfully participate" in an approved PT program for each "specialty, subspecialty, and analyte or test in which the laboratory is certified under CLIA." 42 C.F.R. � 493.803(a). If a laboratory fails to participate successfully, CMS must impose sanctions. 42 C.F.R. � 493.803(b).

The undisputed evidence establishes that, for the years 2002, 2003, and 2004, Petitioner was enrolled in a PT program administered by the American Academy of Family Practitioners, and participated in three PT events per year. CMS Exs. 17; 18; ⁽⁵⁾ 19, at 4-5 (Myler Declaration (Decl.)); 21 (Mitchell Decl.). Results of its PT tests show that, for the first and third testing events of 2003, the lab received scores of 0% and 40%, respectively, for the analyte alanine aminotransferase (ALT/SGPT), part of the routine chemistry subspecialty. CMS Exs.17, at 2, 16; 18; 19, at 5 (Myler Decl.); and 21, at 3 (Mitchell Decl.).

Failure to attain a score of at least 80 % of acceptable responses for each analyte in each testing event is unsatisfactory performance for the testing event. 42 C.F.R. � 493.841(a). Failure to achieve an overall testing event score of satisfactory performance for two consecutive testing events or two out of three consecutive testing events is unsuccessful performance. 42 C.F.R. � 493.841(g). Thus, because Petitioner failed to achieve a satisfactory score for two out of three consecutive testing events, it was not in substantial compliance with the CLIA condition governing proficiency testing, 42 C.F.R. � 493.803.

C. Petitioner did not comply with the requirements of 42 C.F.R. � 493.1403 because its laboratory director failed to provide the lab with adequate management and administration.

A laboratory must have a director who meets the qualifications set forth in 42 C.F.R. � 493.1405, and who provides overall management and direction in accordance with 42 C.F.R. � 493.1407. 42 C.F.R. � 493.1403. The lab director is responsible for the overall operation and administration of the lab, which includes employing personnel competent to perform test procedures, and record and report test results promptly, accurately, and proficiently, and for assuring compliance with applicable regulations. 42 C.F.R. � 493.1407. Among the director's specific responsibilities, he/she must ensure that the laboratory is enrolled in an approved PT program, that the PT samples are tested as required, and that PT results are reviewed in order to identify problems. 42 C.F.R. �� 493.1407(e)(4), ⁽⁶⁾ 493.1445; see Oakland Medical Group, P.C., DAB No. 1755, at 21-22 (2000).

Petitioner acknowledges its significant deficiencies and the laboratory director's responsibility for them. Nevertheless, it points out that there were personnel changes in the lab, including the departure of a prior lab technician and the lab's office manager, and that the lab relocated during this time. P. Hearing Request, at 3 (December 21, 2004) (CMS Ex. 7); P. Opp. Br. at 4. The lab director, Dr. Griffith, also complains that, prior to the CLIA inspection, his lab technician had not told him that his proficiency testing was not passing standards. P. Ex. 1, at 5 (Griffith Decl.). These assertions only underscore Petitioner's noncompliance with 42 C.F.R. � 493.1403. That the lab director was not even aware that his lab had failed its PT events demonstrates the absence of oversight. That his staff were not performing adequately is no defense since the lab director is responsible for employing competent personnel. Delegation of his duties does not relieve the director of responsibility. 42 C.F.R. � 493.1445(b); see also Preferred Family Clinic, DAB CR 975, at 11 (2002).

The undisputed evidence thus establishes a pervasive absence of oversight and direction, sufficient to render unmet, at the condition level, the regulatory requirement for lab director.

D. I have no authority to review Petitioner's other complaints.

Petitioner has admitted its laboratory failures, but raises other issues:

Specifically, I wish to appeal the process that has transpired leading to the rejection of my corrective action response . . . . I fully accept that the systems, which I believed were in place in my laboratory appear to have broken down, and that in the end the responsibility for the running of my laboratory rests squarely on my shoulders. I do not, however, understand why I have not been given the opportunity to fix these problems and bring my laboratory back into compliance with the applicable state and federal regulations.

P. Hearing Request, at 1 (December 21, 2004) (CMS Ex. 7). Petitioner also complains that it was misled into believing that the State Agency would assist in correcting the lab's problems, and points out the steps it took to develop a plan of correction and to bring itself into compliance. Petitioner also points out that its owner/operator has not been charged with any fraud, and complains that, in light of the lab's level of cooperation, the sanctions are too severe. I have no authority to resolve these issues.

First, with respect to the sanctions imposed, since Petitioner failed to comply with conditions of participation, CMS is authorized to impose principal sanctions, including revocation of the laboratory's CLIA certificate. 42 C.F.R. � 493.1806(a), (b). CMS may also cancel the laboratory's approval to receive Medicare payment for its services. 42 C.F.R. � 493.1807. CMS's determination to impose a CMP, and the amount of the CMP imposed are not initial determinations and thus are not reviewable in this forum. 42 C.F.R. � 493.1844(c).

The agencies' decisions not to accept Petitioner's plan of correction are not "initial determinations," and therefore are not reviewable. 42 C.F.R. � 493.1844.

Finally, Petitioner's complaints about agency motives and purported deception are simply irrelevant to the question of the lab's compliance.

IV. Conclusion

For all of these reasons, I sustain CMS's determination to revoke Petitioner's CLIA certificate for at least one year, to cancel its approval to receive Medicare payment for its services, and to impose a CMP.

Carolyn Cozad Hughes

Administrative Law Judge

1. Because Petitioner filed an appeal, the revocation of the lab's CLIA certificate does not become effective until the date of an administrative law judge decision upholding the basis for the remedy. 42 C.F.R. �� 493.1840(e), 493.1844(d)(2).

2. CMS has submitted a Brief in Support of Summary Disposition (CMS Br.) and, responding to Petitioner's Motion for Summary Judgment, a document titled CMS's Opposition to Petitioner's Cross-Motion for Summary Judgment (CMS Opp. Br.). Petitioner has filed a Motion for Summary Judgment (P. Br.) and a document titled Petitioner's Opposition to CMS's Brief in Support of Summary Disposition (P. Opp. Br.). I note that Petitioner's submissions are virtually identical to each other. Its brief in opposition does not so much respond to CMS's arguments as simply repeat verbatim its initial arguments.

3. I make findings of fact and conclusions of law to support my decision. I set forth each finding, below, in bold and italics, as a separately numbered or lettered heading.

4. An analyte is a substance or constituent for which the laboratory conducts testing. 42 C.F.R. � 493.2.

5. CMS Ex. 18 is an Oscar Report, showing the lab's PT profile for the years 2002, 2003, and 2004. It lists the analytes for which the lab completed PT for these years, and provides the PT scores for each testing event. Failing scores are marked by an asterisk. Although CMS does not base its summary judgment motion on all of the PT failures, the document shows more than a dozen failed tests over a relatively short period (seven testing events, from the third event of 2002 through the third event of 2004).

6. Noncompliance with 42 C.F.R. � 493.1407(e)(4)(iii) was separately cited as a standard-level deficiency. CMS Ex. 1, at 38-39.