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CASE | DECISION |JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Sonali Diagnostic Laboratory,

Petitioner,

DATE: January 13, 2005
                                          
             - v -

 

Centers for Medicare & Medicaid Services.

 

Docket No.C-02-047
Decision No. CR1267
DECISION
...TO TOP

DECISION

Sonali Diagnostic Laboratory's (Sonali or laboratory or Petitioner) certificate to engage in the testing of human specimens issued pursuant to the Clinical Laboratory Improvement Amendments of 1988 (CLIA) is revoked. Pursuant to 42 C.F.R. � 493.1844(d)(4)(ii), the revocation of the laboratory's CLIA certificate is effective the date of this decision. By operation of law, the owner and operator of the laboratory is prohibited from owning or operating a CLIA laboratory for two years pursuant to 42 U.S.C. � 263a(i)(3) due to the revocation of the laboratory's certificate. The two-year prohibition runs from the date of the revocation of the laboratory's certificate pursuant to 42 U.S.C. � 263a(i)(3) - the date of this decision. The evidence shows that Rustom Ali, Ph.D. was the owner, operator, and laboratory director of Sonali. The civil money penalty (CMP) of $30,000 ($10,000 per day for August 4, 5, and 6, 2001) is approved.

I. PROCEDURAL HISTORY

Sonali and Rustom Ali, Ph.D. (Petitioners) were advised by letter from the Centers for Medicare & Medicaid Services (CMS) (1) dated July 30, 2001, that a complaint survey completed on January 25, 2001, by the Arizona Department of Health (the state agency), found Petitioners in violation of eight condition-level requirements of CLIA and implementing regulations at 42 C.F.R. �� 493.801, 493.1101, 493.1201, 493.1247, 493.1403, 493.1447, 493.1453, and 493.1701. (2) A revisit and recertification survey of the laboratory was completed on May 31, 2001, and the laboratory was found to remain in violation of seven CLIA conditions including 42 C.F.R. �� 493.803, 493.1101, 493.1201, 493.1403, 493.1447, 493.1453, and 493.1701. By letter dated July 30, 2001, CMS notified Petitioners that the laboratory presented immediate jeopardy to patient health and safety. CMS further advised Petitioners that it proposed imposition of sanctions including a CMP, directed plan of correction, suspension of the laboratory's CLIA certificate, and cancellation of approval to receive Medicare payments. CMS Exhibit (CMS Ex.) 16. (3) By letter dated August 17, 2001, CMS advised Petitioners that Petitioners' plans of correction and allegations of compliance were not acceptable and that the following sanctions were imposed: a CMP of $10,000 per day for August 4, 5, and 6, 2001, for a total CMP of $30,000; a directed plan of correction that required Petitioner's to cease testing effective August 4, 2001; cancellation of Petitioners' approval to receive Medicare and Medicaid payments effective August 7, 2001; suspension of the laboratory's CLIA certificate effective August 7, 2001, and revocation effective September 28, 2001, subject to any appeals. CMS Ex. 17.

Petitioners requested a hearing by an administrative law judge (ALJ) in a letter dated September 17, 2001. The request for hearing was received by CMS and forwarded to the Departmental Appeals Board (DAB) on October 5, 2001. The case was assigned to me for hearing and decision on October 25, 2001. Petitioners' counsel withdrew from representation by letter dated March 14, 2002, and thereafter Petitioners proceeded with Petitioner Rustom Ali representing himself and the laboratory, which he owned and operated.

I convened a hearing in this case on December 16, 2002 in Phoenix, Arizona. The hearing adjourned on December 19, 2002. CMS Exhibits 1 through 24 were admitted as evidence. Transcript pages (Tr.) 10 - 20. Petitioners' exhibits (P. Ex.) 1 through 30 (Tr. 29); A2(a), A2(b), A2(c), A2(d), A2(e), A3, A5, and A6 (Tr. 37-47); 31-33 (Tr. 132, 222, 232); and 34 (Tr. 509) were admitted as evidence. Joan Apt, surveyor; Diane Eckles, surveyor; Gary Yamamoto, CMS; and Mary K. Jew, CMS, testified for CMS. Rustom Ali, Ph.D. testified on behalf of Petitioners.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Findings of Fact

The following findings of fact are based on the evidence admitted at hearing and the testimony of the witnesses. Specific citations to the evidence may be found in the discussion if not included here.

1. Sonali Diagnostic Laboratory is located in Lake Havasu, Arizona.

2. Sonali Diagnostic Laboratory is owned and operated by Rustom Ali, Ph.D., who also served as its Laboratory Director.

3. Petitioners conducted both moderate and high complexity testing at Sonali.

4. Petitioners' CLIA certificate which would have expired on April 20, 2001 was administratively extended until August 17, 2001, when the certificate was suspended.

    5. By letter dated July 30, 2001, CMS notified Petitioners that a complaint survey completed on January 25, 2001 by the state agency found Petitioners in violation of eight condition-level requirements of the CLIA and implementing regulations at 42 C.F.R. �� 493.801, 493.1101, 493.1201, 493.1247, 493.1403, 493.1447, 493.1453, and 493.1701.

    6. A revisit and recertification survey of the laboratory was completed on May 31, 2001, and the laboratory was found to remain in violation of seven CLIA condition-level requirements: 42 C.F.R. � 493.803, successful participation in proficiency testing, Tag D2016; 42 C.F.R. � 493.1101, patient test management, moderate or high complexity, Tag D3000; 42 C.F.R. � 493.1201, general quality control, moderate or high complexity, Tag D4000; 42 C.F.R. � 493.1403, laboratory director, moderate complexity testing, Tag D5000; 42 C.F.R. � 493.1447, technical supervisor, high complexity testing, Tag D6108; 42 C.F.R. � 493.1453, clinical consultant, high complexity testing, Tag D6134; and 42 C.F.R. � 493.1701, quality assurance, moderate or high complexity testing, Tag D7000.

    7. By letter dated July 30, 2001, CMS notified Petitioners that the laboratory presented immediate jeopardy to patient health and safety. CMS further advised Petitioners that it proposed imposition of sanctions including a CMP, directed plan of correction, suspension of the laboratory's CLIA certificate, and cancellation of approval to receive Medicare payments.

    8. By letter dated August 17, 2001, CMS advised Petitioners that Petitioners' plans of correction and allegations of compliance were not acceptable and that the following sanctions were imposed: a CMP of $10,000 per day for August 4, 5, and 6, 2001, for a total CMP of $30,000; a directed plan of correction that required Petitioner's to cease testing effective August 4, 2001; cancellation of Petitioners' approval to receive Medicare and Medicaid payments effective August 7, 2001; suspension of the laboratory's CLIA certificate effective August 7, 2001 and revocation effective September 28, 2001, subject to any appeals.

    9. Petitioners, Rustom Ali, Ph.D. and Sonali, requested a hearing by an ALJ in a letter dated September 17, 2001, challenging the findings of the revisit survey completed at the laboratory on May 31, 2001.

    10. Petitioners were conducting testing in hematology, which includes partial thromboplastin time (PTT), and chemistry, which includes testing for chloride, creatinine, sodium, and total protein, during the fall of 2000 and the spring of 2001, in which these periods were included within the third proficiency test (PT) event of 2000 and the first PT event of 2001.

    11. Petitioners' PT scores for PTT were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 40 percent, respectively.

    12. Petitioners' PT scores for creatinine were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 20 percent, respectively.

    13. Petitioners' PT scores for total protein were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 60 percent respectively.

    14. Petitioners failed to accurately report times in its final reports.

    15. Petitioners failed to assure that test reports were accurate and reliable.

    16. Petitioners failed to disclose on reports the location of the reference laboratory that did the testing.

    17. Petitioners issued reports that failed to include the name and address of the reference laboratory where tests were actually performed.

    18. Petitioner Ali was aware that erroneous test reports were being issued.

    19. Neither Ms. Canlas nor Ms. Longares had the required experience to serve as technical supervisor for high complexity testing in bacteriology.

    B. Conclusions of Law

    1. Petitioners request for hearing was timely and I have jurisdiction.

    2. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.803, successful participation in proficiency testing, Tag D2016.

    3. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.1101, patient test management, moderate or high complexity, Tag D3000.

    4. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.1447, technical supervisor, high complexity testing, Tag D6108.

    6. Petitioners' due process arguments have no merit.

    a. Immediate jeopardy existed prior to suspension of Petitioners' CLIA certificate and suspension was clearly appropriate.

    b. There was no violation of the statutory or regulatory process, and Petitioner was not deprived of due process.

7. The existence of a single condition-level deficiency provides a basis for the revocation of Petitioners' CLIA certificate and imposition of other remedies.

8. The proposed CMP serves a remedial purpose.

9. The owner and operator of Sonali is prohibited from owning, operating, or directing another laboratory subject to CLIA for a period of two years from the date of this decision.

10. Petitioners' CLIA certificate is revoked effective the date of this decision.

III. ANALYSIS

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, 1302, 1395x(e). The purpose of CLIA is to ensure the accuracy and reliability of laboratory tests, and hence, the public health of all Americans. See H.R. Rep. No. 100-899, at 8, 18 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3839. CLIA grants the Secretary of Health and Human Services (Secretary) broad enforcement authority, including the ability to suspend, limit, or revoke the CLIA certificate of a laboratory that is out of compliance with one or more requirements for certification. The Secretary has exercised his authority under 42 U.S.C. � 263a(f) and issued regulations implementing CLIA. See 42 C.F.R. Part 493.

The Secretary's regulations delegate to CMS broad authority to ensure that laboratories perform as Congress intended, including authority to inspect and sanction laboratories that fail to comply with the regulatory requirements. CMS certification of a laboratory under CLIA is dependent upon whether the laboratory meets the conditions for certification set out in the statute and regulations. 42 U.S.C. � 263a(f)(1); 42 C.F.R. � 493.1 et seq. Pursuant to the enforcement provisions of the regulations, CMS may impose principal or alternative sanctions when it finds that a laboratory has a "condition-level" deficiency. 42 C.F.R. � 493.1804(b)(2). Principal sanctions are suspension, limitation, or revocation of a CLIA certificate. 42 C.F.R. � 493.1806(b). Alternative sanctions are a directed plan of correction, state on-site monitoring, and a CMP. 42 C.F.R. � 493.1806(c). Cancellation of Medicare payments is also authorized as a principal sanction when condition-level deficiencies are found (42 C.F.R. �� 493.1807(a) and 493.1842(a)(2)) and required when CMS suspends or revokes a laboratory's certificate (42 C.F.R. � 493.1842(a)). Standard-level deficiencies are not an adequate basis for the imposition of a sanction, except when the laboratory fails to correct such deficiencies within 12 months after the last day of inspection. 42 C.F.R. � 493.1816(b). This provision has no application to the case before me.

Each condition-level requirement of the regulations represents a major division of laboratory services to be offered by the laboratory or establishes an important environmental protection for the laboratory. Since each "condition" represents a major division of laboratory services to be offered by the laboratory or an important safety requirement, it has been held that a failure by a laboratory to comply with even a single applicable condition can represent a critical breakdown in one of the major health care delivery or safety systems of the laboratory. Ward General Practice Clinic, DAB No. 1624, at 2 (1997). Therefore, violation of just one condition-level deficiency can be grounds for a principal sanction, including revocation of a laboratory's CLIA certificate. 42 C.F.R. � 493.1804(b); Edison Medical Laboratories, DAB No. 1713 (1999).

If, on inspection, a laboratory is found to have condition-level deficiencies that pose immediate jeopardy, CMS requires the laboratory to take immediate action to remove the jeopardy and may impose alternative sanctions to assist. If, on revisit, the deficiencies remain, CMS may suspend or limit and later revoke the laboratory's CLIA certificate. CMS is also delegated authority to bring a civil suit for an injunction against a laboratory in specified circumstances where there is immediate jeopardy. 42 C.F.R. � 493.1812. Condition-level deficiencies that do not constitute immediate jeopardy and standard-level deficiencies that do not rise to condition-level, are treated differently and a laboratory is generally accorded 12 months to correct such deficiencies before action is taken to suspend, limit, or revoke the laboratory's CLIA certificate. 42 C.F.R. �� 493.1814 and 493.1816.

CLIA provides at 42 U.S.C. � 263a(i)(1) that a laboratory's certificate may be suspended, revoked, or limited only after reasonable notice and opportunity for hearing to "the owner or operator of the laboratory." The implementing regulations provide that a laboratory or prospective laboratory dissatisfied with an initial determination listed in 42 C.F.R. � 493.1844(b) is entitled to a hearing before an ALJ. 42 C.F.R. � 493.1844(a). The hearing procedures found in subpart D of Title 42, Part 498 are incorporated by reference. 42 C.F.R. � 493.1844(a)(2). The "suspension, limitation, or revocation of the laboratory's CLIA certificate . . . because of noncompliance . . ." is the first listed initial determination subject to hearing before an ALJ. 42 C.F.R. � 493.1844(b)(1). The imposition of alternative sanctions is also an initial determination subject to appeal (42 C.F.R. � 493.1844(b)(3)), but the determination as to which alternative sanctions to impose and the amount of the CMP to be imposed are not. 42 C.F.R. �� 493.1844(b)(3) and (c)(4). The general rule is that suspension, limitation, or revocation of a CLIA certificate does not go into effect if appealed, and is not imposed until the ALJ issues a decision, unless CMS declares immediate jeopardy, and then there is no delay in the suspension or limitation of the offending laboratory's CLIA certificate. 42 C.F.R. � 493.1844(d)(2). Section 498.74 of 42 C.F.R. provides that, absent appeals to the DAB or the U.S. District or Circuit Courts, my decision is final.

In addition to sanctions directed against laboratories, CLIA provides the following with respect to the owners and operators of non-compliant laboratories:

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).

The implementing regulations do not include any express provision implementing or imposing this two-year prohibition against an offending owner or operator. However, the regulations provide that CMS may suspend, limit, or revoke a laboratory's CLIA certificate if it finds that the owner or operator has -

[w]ithin 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).

CLIA does not include a definition of the term operator. However, the regulations define an "operator" as:

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. The "stated criteria" for a laboratory director to be considered an operator are those criteria described in the introductory sentence of the above-quoted section, i.e., whether a person oversaw all facets of the operation of the laboratory and bore primary responsibility for the safety and reliability of the results of specimen testing performed in the laboratory. Sentinel Medical Laboratories, Inc., DAB No. 1762, at 13 (2001), aff'd, Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9th Cir. Mar. 15, 2002), reh'g denied, No. 01-70236 (9th Cir. May 22, 2002); Sol Teitelbaum, M.D., DAB No. 1849, at 8 n.7 (2002). It is a condition-level requirement that a CLIA-certified laboratory have a qualified laboratory director who is required to assume oversight and responsibility for the laboratory and the results of its testing. See 42 C.F.R. �� 493.1403, 493.1405, 493.1407, 493.1441, 493.1443, and 493.1445. Thus, the regulation creates a rebuttable presumption that a laboratory director is an operator of the laboratory within the meaning of the regulations and CLIA.

The allocation of the burden of proof in an appeal of CMS's sanctions is set forth in Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. HHS, No. 98-3789 (GEB) (D.N.J., slip op. May 13, 1999). Edison, DAB No. 1713 (Hillman burden of proof applicable in CLIA appeals). At a hearing, CMS has the burden of coming forward with sufficient evidence to prove a prima facie case of noncompliance with one or more CLIA conditions. The petitioner then has the ultimate burden of showing by a preponderance of the evidence that it was not out of compliance with the conditions placed at issue by CMS in its prima facie case. Regarding the imposition of sanctions, the issue to be resolved by the ALJ is not whether CMS properly exercised discretion in imposing either principal or alternative sanctions, but rather, whether a basis existed for the imposition of sanctions under governing statutory and regulatory authorities based upon the evidence before the ALJ, i.e. the ALJ resolves these issues de novo. Cf. Emerald Oaks, DAB No. 1800 (2001).

B. Issues

1. Whether one or more condition-level deficiencies existed at Petitioner.

2. Whether there is a basis for the revocation of Petitioners' CLIA certificate and the imposition of other remedies.

C. Discussion

In the request for hearing dated September 17, 2001, Petitioners challenge the findings of the revisit survey completed on May 31, 2001. The state agency surveyors found during the May revisit survey that Petitioner was in violation of the condition-level requirements of 42 C.F.R. �� 493.803, successful participation in proficiency testing, Tag D2016; 493.1101, patient test management, moderate or high complexity, Tag D3000; 493.1201, general quality control, moderate or high complexity, Tag D4000; 493.1403, laboratory director, moderate complexity testing, Tag D5000; 493.1447, technical supervisor, high complexity testing, Tag D6108; 493.1453, clinical consultant, high complexity testing, Tag D6134; and 493.1701, quality assurance, moderate or high complexity testing, Tag D7000. (4) One condition-level violation is a sufficient basis for the revocation of Petitioners' CLIA certificate. In this case, I review and conclude that at least three condition-level violations have been established. In the interest of judicial economy, I do not address the other alleged condition-level deficiencies.

1. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.803, successful participation in proficiency testing, Tag D2016.

Pursuant to 42 C.F.R. � 493.803, a laboratory performing either moderate complexity or high complexity testing, as there is no dispute Petitioners were in this case, must successfully participate in a proficiency testing program approved by CMS, for each specialty, sub-specialty, analyte or test which the laboratory is certified to perform under CLIA. CMS may impose sanctions against a laboratory that fails to successfully participate in proficiency testing. CMS may direct the laboratory to train its personnel and/or obtain technical assistance rather than imposing principle or alternative sanctions, but only if there is no immediate jeopardy, the laboratory provides satisfactory evidence of correction of the problem that caused unsuccessful participation, and the laboratory does not have a poor compliance history. Unsatisfactory proficiency testing performance is defined at 42 C.F.R. � 493.2:

Unsatisfactory proficiency testing performance means failure to attain the minimum satisfactory score for an analyte, test, subspecialty, or specialty for a testing event. Unsuccessful participation in proficiency testing means any of the following: (1) Unsatisfactory performance for the same analyte in two consecutive or two out of three testing events. (2) Repeated unsatisfactory overall testing event scores for two consecutive or two out of three testing events for the same specialty or subspecialty. (3) An unsatisfactory testing event score for those subspecialties not graded by analyte (that is, bacteriology, mycobacteriology, virology, parasitology, mycology, blood compatibility, immunohematology, or syphilis serology) for the same subspecialty for two consecutive or two out of three testing events. (4) Failure of a laboratory performing gynecologic cytology to meet the standard at � 493.855. Unsuccessful proficiency testing performance means a failure to attain the minimum satisfactory score for an analyte, test, subspecialty, or specialty for two consecutive or two of three consecutive testing events. Validation review period means the one year time period during which HCFA conducts validation inspections and evaluates the results of the most recent surveys performed by an accreditation organization or State laboratory program.

Specific standards are applicable to various specialties and sub-specialties. For hematology and general chemistry, the two specialities at issue in this alleged deficiency, unsatisfactory performance is a failure to attain a score of 80 percent on a PT event. 42 C.F.R. �� 493.841(a) and 493.851(a). Failure to participate in a testing event for a specialty is unsatisfactory performance and is treated as if a score of 0 percent was attained. 42 C.F.R. �� 493.841(c) and 493.851(c). Failure to achieve satisfactory performance for the same analyte in two consecutive events is unsuccessful performance. 42 C.F.R. �� 493.841(f) and 493.851(f).

The surveyors allege in the Statement of Deficiencies (SOD) for the survey completed on May 31, 2001, five examples of Petitioners' violation of the PT requirement: (1) Petitioners' PT scores for PTT were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 40 percent, respectively; (2) Petitioners' PT scores for chloride were unsatisfactory for the third event of 2000 and the first event of 2001 with PT scores of 0 and 60 percent, respectively; (3) Petitioners' PT scores for creatinine were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 20 percent, respectively; (4) Petitioners' PT scores for sodium were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 20 percent respectively; and (5) Petitioners' PT scores for total protein were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 60 percent respectively. CMS Ex. 6, at 2-3. PTT falls within the specialty of hematology (42 C.F.R. � 493.941) and chloride, creatinine, sodium and total protein testing fall within the area of general chemistry (42 C.F.R. � 493.931).

CMS rejected Petitioners' allegation of compliance as not credible and concluded that there was inadequate evidence of correction on August 17, 2001. CMS Ex. 17, at 2. The SOD for the survey ended January 25, 2001, reflects that the surveyors interviewed the Laboratory Director, Petitioner Ali, who admitted that the laboratory was not then enrolled in an approved proficiency testing program for 2001 for any of the specialties or sub-specialties for which the laboratory provided services. In the Plan of Correction (right column of the SOD completed on January 25, 2001), Petitioner Ali alleged that the laboratory had enrolled in a PT program and was completing the first event as of January 30, 2001 with completion on April 13, 2001. CMS Ex. 5, at 2. Joan Apt, the surveyor for this deficiency citation, testified that the laboratory was enrolled for PT in 2000 but failed to timely file its testing reports which caused a score of 0 percent. Tr. 108-09, 250-57. Surveyor Apt's testimony is consistent with P. Ex. 3, at 6, which indicates that Petitioners' "2000 American Proficiency Institute 3rd Test Event Chemistry/Hematology" results arrived too late to be evaluated. See also P. Ex. 2, at 3.

There is no dispute that Petitioners had not suspended hematology or general chemistry testing during the period which would have been covered by the third PT event of 2000 and the first PT event of 2001. There is no dispute that Petitioners scored a 0 percent for the third event of 2000 for both chemistry and hematology because Petitioners did not timely submit a test report. Tr. 598-99. There is also no dispute that Petitioners failed to achieve 80 percent for hematology and general chemistry after the laboratory participated in the first test event of 2001. Thus, Petitioners had two consecutive unsuccessful test events for hematology and general chemistry and CMS established a prima facie violation of the condition-level requirement established by 42 C.F.R. � 493.803.

Petitioner Ali does not deny the facts, but rather argues that he was not aware that the state agency and CMS refused to accept Petitioners' self-evaluation in lieu of satisfactory PT results and that had Petitioner known, remedial action could have been taken. Petitioners' Post Hearing Brief dated March 24, 2003 (P. Brief I) at 8-9; Petitioners' Post Hearing Brief dated April 8, 2003 (P. Brief II) at 8-9. Petitioner Ali also offered as evidence a letter dated August 3, 2001 with three attached tables which show that the laboratory passed an "off-schedule proficiency testing" in PTT which was submitted by Petitioners to the PT provider on July 30, 2001. P. Ex. 23, at 1-5. Petitioner Ali testified that passing the off-schedule proficiency testing for PTT shows that his remedial action following the prior two unsatisfactory scores was successful, the implication being that his remedial action excuses the prior unsuccessful PTT scores. Tr. 522-24. Petitioners also prevailed upon the PT provider to reevaluate Petitioners' PT scores for chloride, creatinine, sodium, and total protein for the first test event of 2001 on the grounds that Petitioners reported using a machine other than that actually used. The reevaluation shows that Petitioners passed for chloride and sodium, but still failed for creatinine and total protein. P. Ex. 23, at 6-8. Petitioner Ali testified that his self-evaluation for creatinine and total protein was successful. Petitioner Ali suggested that his successful self-evaluation and subsequent successful test events should excuse two failing scores. He also suggested in testimony that Surveyor Diane Eckles represented to him that self-evaluation might be considered sufficient. Tr. 525-26. However, Ms. Eckles' testimony clearly is at odds with Petitioner Ali's representation. Tr. 366.

Petitioners' arguments reveal a fundamental misunderstanding of CLIA. The regulations do not permit CMS to accept a "self-evaluation" process in lieu of satisfactory participation in an approved PT program that includes test events for hematology and general chemistry. See 42 C.F.R. �� 493.801, 493.841, 493.851, and 493.1236. Furthermore, while remedial action is required (e.g. 42 C.F.R. �� 493.803 and, 493.1236), remedial action, assuming it is found acceptable by CMS, does not excuse the unsuccessful PT performance, (5) but merely allows CMS to direct the laboratory to train personnel or to obtain outside technical assistance or both, in lieu of imposing a principle or alternative sanction. 42 C.F.R. � 493.803(c). However, in this case, CMS did not have that discretion as Petitioner Ali admitted that no remedial action was taken for general chemistry, CMS declared immediate jeopardy, and there is evidence that Petitioners had a long history of poor PT compliance (see CMS Exs. 18, at 3-4; 19, at 3-5; 20, at 12; 21, at 3-4; 22, at 3-11; 23, at 3-4; and 24, at 4-8). 42 C.F.R. � 493.803(c).

Petitioners have not rebutted the CMS prima facie showing of a violation of 42 C.F.R. � 493.803. Petitioner Ali asserts in P. Brief I, page 9, that there was no negative impact upon patient health and safety. (6) I reject this assertion or opinion. Petitioners qualified no expert at hearing who could opine about impact upon patient health and safety. While Petitioner Ali may assert he is himself qualified to render an opinion, I find the evidence of his education, training, and experience insufficient to show him competent to opine about patient impact. Furthermore, Petitioner Ali's interest in the outcome of this case is far too great to overlook by treating his opinions as credible.

2. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.1101, patient test management, moderate or high complexity, Tag D3000.

Pursuant to 42 C.F.R. � 493.1101, a laboratory performing moderate complexity or high complexity testing "must employ and maintain a system that provides for proper patient preparation; proper specimen collection, identification, preservation, transportation, and processing; and accurate result reporting." The laboratory system "must assure optimum patient specimen integrity and positive identification throughout the preanalytic (pre-testing), analytic (testing), and postanalytic (post-testing) processes and must meet the standards as they apply to the testing performed." 42 C.F.R. � 493.1101.

The surveyors allege in the SOD that Petitioners violated the condition-level requirement of 42 C.F.R. � 493.1101 (Tag D3000): (1) by failure to accurately document test times, in violation of 42 C.F.R. � 493.1107(d) (Tag D3041) for 4 of 43 patient test reports reviewed; (2) by failure to assure that its test reports were accurate and reliable for 4 of 43 patient test reports reviewed, in violation of 42 C.F.R. � 493.1109(a) (Tag D3050); and (3) by failure to disclose on its reports the location of the reference laboratory that did the testing reported in 13 of 43 cases reviewed, in violation of 42 C.F.R. � 493.1109(b). CMS Ex. 6, at 3-10.

CMS provided four examples of incorrect times being reported by Petitioners. CMS Ex. 8, at 3 and 4, upper right quadrant, shows a specimen was collected on November 13, 2000, that the laboratory received the specimen on November 14, 2000, at 4:00 p.m., and reported a result on November 14, 2000, at 1:26 p.m., more than two hours prior to receipt of the sample. A similar error is reflected in Petitioner's laboratory reports at CMS Ex. 8, at 5-6, 7-9, and 10. Petitioner Ali does not deny that the reports were in error, but rather argues that this is a minor error with no patient harm or impact and that the laboratory had other documents which showed correct times for receipt, testing, and reporting. P. Brief II at 10.

CMS makes a prima facie showing by showing that there are errors in a laboratory report. CMS can rely upon the presumption which arises under the regulations that an error which violates the regulation gives rise to potential patient harm. There is no dispute that there are errors reflected in the reports at CMS Ex. 8, at 3-4, 5-6, 7-9, and 10. Furthermore, there is no dispute that these errors reflect a systemic error which Petitioner Ali admitted plagued the laboratory. CMS Ex. 6, at 6; P. Brief II at 10-11. I do not accord weight to Petitioner Ali's opinion that the erroneous information on the reports had no potential for patient impact. Petitioner Ali is not a medical doctor and there is no evidence that he has experience or training in diagnosing or treating patients using laboratory reports. Petitioners offered no credible expert testimony that reflected the potential impact upon patients due to a doctor's receipt of a laboratory report with an error such as that cited in this example. Accordingly, Petitioners have failed to rebut the CMS prima facie showing by a preponderance of the evidence.

The surveyors also cited several examples of the reporting of questionable test results by Petitioners. CMS Ex. 6, at 7-8. During the survey ended on January 25, 2001, the surveyors found that in two instances, Petitioners' report showed a different "ESR" than was recorded in its results logbook (ESR of 18 mm/hr reported but 3 mm/hr recorded for the patient in the logbook and ESR of 15 mm/hr reported but 10 mm/hr recorded for the patient in the logbook). The surveyors also found that a different "WBC" (white blood count) was reported for two patients than was reflected on instrument printouts. At the time of the January 2001 survey, no corrected reports were provided by Petitioners to show that corrected reports had been issued. CMS Ex. 5, at 5. During the revisit survey which ended May 31, 2001, the surveyors found that corrected reports were issued for the foregoing examples, but the surveyors then found other reports that included results that could not be verified. For example, the report for patient 28735 at CMS Ex. 9, at 1 shows an assayed value for calcium of 9 but the instrument printout at CMS Ex. 9, at 2 shows that the test result was actually 4.3. Subsequent to the May survey, Petitioner produced another instrument printout showing a calcium result of 9.0 mg/dl for patient 28735. (7) P. Ex. 24.

There is no dispute that Petitioners did not do albumin testing for patients 28735 (CMS Ex. 9, at 1) and 29536 (CMS Ex. 9, at 3), as reflected by the comment on the reports for 28735 and 29536. The reported result for albumin in both instances is the result of testing by the reference laboratory. Petitioners do not dispute that while albumin was tested at a reference laboratory for both patients, the reference range listed on the report issued by Petitioners is actually the reference range used by Petitioner, which is different from the reference range used by the reference laboratory. Petitioner again attributes this error to a systemic problem with its computer system, its Laboratory Information System and suggests that there was no patient harm. P. Brief II at 11-12. Petitioners do not explain why this deficiency should be considered excused given that Petitioners had a known, on-going computer problem that was affecting the accuracy and reliability of the reports they were sending to practitioners. Petitioners' conduct is all the more culpable in this case because this was a known problem and Petitioners continued to issue test reports. I also refuse to accept as worthy of any weight, Petitioner Ali's opinion that there was no potential for patient harm for the reasons already indicated.

Finally, the surveyors alleged in the SOD that Petitioners issued reports that failed to include the name and address of the reference laboratory where tests were actually performed. Petitioner Ali, the laboratory director, admitted to the surveyors that this was a problem with his computer system. CMS Ex. 6, at 9-10. CMS Ex. 9, at 1 and 3 are laboratory reports issued by Petitioners that indicate in the comments section that albumin was tested by a reference laboratory; however, the address of that laboratory is not listed. CMS points out that the address of the reference laboratory also does not appear on that test result which is attached to the report at CMS Ex. 9, at 3-4. CMS Reply Brief at 8. CMS Ex. 10, at 3 and CMS Ex. 14, at 5-6 are additional reports that show that specimens were sent to a reference laboratory for testing but without any indication of the address of the laboratory.

Petitioner points to P. Exs. 15, 26, and 5A and asserts these documents show that Petitioners are in compliance with the regulatory requirement. However, it is clear that these are not Petitioners' laboratory reports with an address for a reference laboratory indicated. Petitioner also argues that pursuant to 42 C.F.R. � 493.1111(b), Petitioner as the referring laboratory could allow the reference laboratory to report results directly to the person who requested the tests and all that Petitioner would be required to do is produce copies of the reference laboratory test results. Petitioners argue that they also sent copies of the reference laboratory results to the requesting physician. P. Brief II at 12.

The regulation is very specific:

The test report must indicate the name and address of the laboratory location at which the test was performed, the test performed, the test result and, if applicable, the units of measurement.

42 C.F.R. � 493.1109(b). The requirement is clear that a laboratory must indicate in its test report the address at which the tests were performed. Petitioners do not dispute that final reports were issued with results of tests performed at different laboratories at different locations; however, the addresses of those laboratories are not included in Petitioners' laboratory reports. Thus, CMS has made a prima facie showing. Petitioners' arguments in response are without merit. The regulatory language does not allow the option of attaching a copy of a reference laboratory report where, as in this case, the reference laboratory result is included in the referring laboratory's final report. Contrary to Petitioners' argument (P. Brief II at 12), Mr. Yamamoto, a CMS witness, did not approve a practice of attaching a reference laboratory report, but rather emphasized that if the laboratory reports a reference laboratory's result in its report, it must include the address of the reference laboratory. Tr. 390-91. Further, there is no credible evidence that Petitioners requested, or that the reference laboratories sent, any results to the authorized person who requested the testing. Thus, there is no evidence to support the application of 42 C.F.R. � 493.1111(b) in this case. Finally, I find Petitioner Ali's opinion regarding patient impact to have no weight for the reasons already discussed.

CMS has made a prima facie showing of three standard-level violations which I conclude amount to a condition-level violation of 42 C.F.R. � 493.1101. Petitioner Ali knew that laboratory reports were being issued that included erroneous or missing information, attributable in part to a faulty computer program or system. Despite having knowledge of these errors, Petitioner Ali and his laboratory continued to issue erroneous and faulty test reports. Petitioner has not established any defense.

3. Petitioners violated the condition-level requirement of 42 C.F.R. � 493.1447, technical supervisor, high complexity testing, Tag D6108.

Section 493.1447 of Title 42 requires that a laboratory performing high complexity testing have a technical supervisor who meets the qualifications established by 42 C.F.R. � 493.1449. A laboratory may have one or more technical supervisors who have the education and either training or experience to provide technical supervision for each of the specialties and sub-specialties in which the laboratory performs high complexity tests or procedures. A laboratory director may be the laboratory technical supervisor so long as he or she meets all the qualification requirements.

It is alleged in the SOD that the person designated by the Petitioner to be the technical supervisor in bacteriology did not have the minimum qualifications of a bachelor's degree in chemical, physical, or biological science or medical technology from an accredited institution, plus four years of experience or training in bacteriology testing. CMS Ex. 6, at 20-22. CMS explained in the letter of August 17, 2001, in which Petitioners' plans of correction and allegations of compliance were evaluated, that Petitioners' technical supervisor's educational background had been clarified, but Petitioner had failed to document her laboratory experience. CMS Ex. 17, at 3.

This deficiency was cited in the survey ended January 25, 2001. Petitioners' plan of correction for this alleged deficiency with a completion date of February 28, 2001, indicated that a new technical supervisor, Felsie Acosta Longares, had been hired. CMS Ex. 2, at 18; CMS Ex. 5, at 18. Petitioners indicate in the plan of correction for the survey ended May 31, 2001, (8) that Mary Kulp was originally hired as the technical supervisor, but Petitioner Ali admitted that he misunderstood the qualifications required for a technical supervisor and agreed that Ms. Kulp could not qualify for that position. Petitioner Ali then hired Felsie Longares for whom he obtained a foreign equivalency certification. Petitioner Ali states in the plan of correction that he subsequently hired Veronica Canlas, for whom he also had a foreign equivalency certification. P. Ex. 22, at 18-19. Petitioners provided the resume of Felsie Acosta Longares (P. Ex. 18, at 4-5) and a copy of her diplomas which show she received a Bachelor of Science in Medical Technology in March 1981 in the Philippines. P. Ex. 18, at 10-11. Petitioner also provided a copy of a credential evaluation report from the World Education Services, Inc. dated October 14, 2002, that indicates that Ms. Longares' bachelor of science degree is equivalent to a bachelor's degree in medical technology issued by a regionally accredited institution. P. Ex. 18, at 4A-4B. Petitioner Ali also provided the resume of Veronica Canlas and a copy of a World Education Services, Inc. credential evaluation report dated July 3, 2001, that indicates that Ms. Canlas' foreign degree was equivalent to a bachelor's degree in medical technology from a regionally accredited institution with the equivalent of two years of graduate study in hospital administration. P. Ex. 18, at 12-18. It appears from the evidence that Ms. Longares was hired as a technical supervisor following the January 2001 survey to replace Ms. Kulp and that Ms. Canlas was hired around the time of the May 2001 survey to replace Ms. Longares. (9) Thus, the focus of the deficiency citation from May 2001 was upon the qualifications of Ms. Longares and the focus at the time of imposition of the remedies in August 2001 was upon the qualifications of Ms. Canlas. After reviewing all the evidence, I conclude that Petitioners never resolved the deficiency.

Section 493.1449 of Title 42 repeats the requirement of 42 C.F.R. � 493.1447 that a laboratory which performs high complexity testing in a specialty or subspecialty must employ a qualified technical supervisor for each specialty or subspecialty. While a laboratory director may serve as technical supervisor, the director must meet the specific qualification requirements of the regulation. It has never been alleged that Petitioner Ali met the qualification requirements for technical supervisor for bacteriology and there is no dispute that he did not meet those requirements. There is also no dispute that Petitioners were attempting to do testing in the bacteriology specialty throughout the period covered by the surveys of January and May 2001 through the suspension of the laboratory's CLIA certificate. The question is whether or not either Ms. Canlas or Ms. Longares met the regulatory requirements to qualify as technical supervisor in bacteriology. The CMS position as indicated in its letter of August 17, 2001 (CMS Ex. 17, at 3) is that while a equivalency certificate for each woman was ultimately produced, Petitioners never established that either woman had the required experience. I concur with that conclusion. The minimum requirements for a technical supervisor in the subspecialty of bacteriology are set forth at 42 C.F.R. � 493.1449(c)(5). A technical supervisor must have a minimum of "a bachelor's degree in a chemical, physical, or biological science or medical technology from an accredited institution; and have at least 4 years of laboratory training or experience, or both, in high complexity testing within the specialty of microbiology with a minimum of 6 months experience in high complexity testing within the subspecialty of bacteriology."

Even assuming that the certificates of equivalence from the World Education Services, Inc. are sufficient to show that both Ms. Canlas and Ms. Longares had the required bachelor's degree in medical technology, the evidence does not show that they had the required experience. Ms. Canlas' resume shows that she worked as a medical technologist from January 23, 2001 to May 23, 2001, at La Paz Regional Hospital. Ms. Canlas previously worked for the Ministry of Public Health, Al-Jahra Hospital, State of Kuwait, from October 28, 1980 to August 2, 1990 and July 1, 1991 to September 7, 1992 as a medical technologist/microbiologist. Her resume does not indicate what Ms. Canlas was doing from September 7, 1992 to January 23, 2001. The general description of duties for both Ms. Canlas' jobs does not provide sufficient detail to determine what her actual level of responsibility was in either job. P. Ex. 18, at 13. There is no evidence, such as a performance evaluation or other statement from Ms. Canlas' supervisors or employers, to shed light upon her actual level of responsibilities, her performance, or competence. In the case of Ms. Longares, her resume reflects a consistent work history in various positions with the title Medical Technologist, but does not provide sufficient detail to determine her level of responsibility. P. Ex. 18, at 4-5; Tr. 638-41. There is also no evidence such as performance evaluations or a supervisor or employers statement to indicate Ms. Longares' level of responsibility, performance, or competence.

I conclude that Petitioners have failed to show by a preponderance of the evidence that the admitted failure to have a qualified technical supervisor in the subspecialty of bacteriology was corrected at any pertinent time.

4. Petitioners' due process arguments have no merit.

Petitioner Ali makes several arguments challenging the procedural process followed in the two surveys of his laboratory, the imposition of remedies, and the hearing process. I discuss his challenges generally and conclude that Petitioners have not been denied due process or been unlawfully prejudiced at any stage.

(a) Immediate jeopardy existed prior to suspension of Petitioners' CLIA certificate, and suspension was clearly appropriate.

Congress granted laboratory owners and operators a right to a hearing before the Secretary may suspend, revoke, or limit the laboratory's CLIA certificate. 42 U.S.C. � 263a(i)(1). There is an exception, however. In a case where a laboratory's failure to comply with CLIA standards presents "an imminent and serious risk to human health," the Secretary may suspend or limit the laboratory's CLIA certificate prior to hearing but the laboratory has a right to an expedited hearing "no later than 60 days from the effective date of the suspension or limitation." The suspension or limitation remains in effect until a decision is made following the hearing. 42 U.S.C. � 263a(i)(2).

The Secretary, acting pursuant to his delegated authority under CLIA, has directed that CMS not suspend, limit, or revoke a laboratory's CLIA certificate until after an ALJ hearing decision except that CMS may suspend or limit a laboratory's certificate before hearing where the laboratory's deficiencies pose immediate jeopardy. (10) 42 C.F.R. �� 493.1840(d) and (e) & 493.1844(d)(2).

The Secretary has provided by regulation that a laboratory has a right to an ALJ hearing (42 C.F.R. � 493.1844(f)), and the Secretary has delegated the authority to conduct hearings in CLIA cases to ALJs (42 C.F.R. � 493.1844(a)(2)). The Secretary, however, set limits upon which actions of CMS are subject to appeal and ALJ review. Actions which are "initial determinations" may be reviewed; those that are not, are not subject to review. Initial determinations identified by the Secretary are the following: (1) suspension, limitation, or revocation of a CLIA certificate; (2) denial of a CLIA certificate; (3) the imposition of alternative sanctions; and (4) the denial or cancellation of approval to receive payments from Medicare. 42 C.F.R. � 493.1844(b). Examples of CMS actions that are not subject to review as initial determinations include: findings that a laboratory only has standard-level violations; the determination as to which alternative sanctions to impose and the amount of a CMP; and the determination that deficiencies pose immediate jeopardy. 42 C.F.R. � 493.1844(c). Thus, while the CMS decision to suspend a CLIA certificate is subject to review, the CMS decision to suspend a CLIA certificate prior to hearing on grounds that immediate jeopardy exists is not subject to appeal.

Petitioner argues that there was no immediate jeopardy in this case and it was not proper for CMS and the state agency to stop the laboratory operations prior to hearing. P. Brief II at 17-19, 26-29. It is well settled that the CMS decision to declare immediate jeopardy is not subject to appeal. Petitioners' characterization of an issue related to the declaration of immediate jeopardy as one of denial of due process does not make the declaration of immediate jeopardy a matter subject to review even though it is not subject to appeal. However, in this case I have already discussed in detail that I find that three condition-level deficiencies existed at Petitioners' laboratory. The three condition-level deficiencies involve failure of the laboratory to demonstrate minimum competence to do testing in some of the areas in which it was testing; issuance of erroneous reports to physicians who presumably used the reports for diagnosis and treatment; and failure to hire a technical supervisor to supervise high complexity testing in bacteriology, thus rendering suspect all reports in this area. Immediate jeopardy is a situation where immediate corrective action is required because noncompliance with one or more condition-level requirements "has caused, is causing, or is likely to cause at any time, serious injury or harm, or death to individuals served by the laboratory . . . ." 42 C.F.R. � 493.2. The CMS decision that immediate jeopardy existed is consistent with the deficiencies I have found, deficiencies which clearly presented the possibility of serious injury or harm, or death to patients. Suspension of the CLIA certificate was clearly appropriate based on the fact that condition-level deficiencies continued to exist at this laboratory which posed immediate jeopardy.

(b) There was no violation of the statutory or regulatory process and Petitioner was not deprived of due process.

My review of the record shows that Petitioners received appropriate notice of the findings of the January 2001 survey and had an opportunity to submit a plan of correction and allegation of compliance.

Petitioners argue that CMS improperly administratively extended Petitioners' certificate of compliance. P. Brief II at 25. Petitioners suggest that had CMS not administratively extended Petitioners' CLIA certificate, then Petitioners would not be subject to sanctions. I find this to be a frivolous argument. The regulation is clear that when CMS begins an action to revoke or suspend a laboratory's CLIA certificate, CMS must take action to ensure that the laboratory retains its certificate until a final decision by an ALJ in the event of an appeal, unless immediate jeopardy justifies immediate suspension. 42 C.F.R. � 493.49(e). In this case, a complaint triggered the January 2001 survey and condition-level violations were found. CMS Ex. 1-2. Petitioners' CLIA certificate would have expired on April 20, 2001, but the January 2001 survey began a process which would clearly lead to suspension, limitation, or revocation of Petitioners' CLIA certificate and the right of Petitioners to request a hearing, if Petitioners did not remedy their condition-level deficiencies. Thus, 42 C.F.R. � 493.49(e) gave CMS no choice but to administratively extend Petitioners' CLIA certificate until the decision was made that suspension was necessary absent timely correction of the condition-level deficiencies that ultimately were found to pose immediate jeopardy. CMS Ex. 16, at 5.

Petitioners argue that it was error for CMS to order Petitioners to cease testing August 4, 2001, as part of the plan of correction. P. Brief II at 26; CMS Ex. 16, at 5. CMS advised Petitioners in its letter of July 30, 2001, that as part of the directed plan of correction, Petitioners were to cease testing August 4, 2001, until such time as compliance was achieved. CMS also advised that suspension of the laboratory's CLIA certificate was effective August 7, 2001. Petitioners make a colorable argument that ordering a laboratory to cease testing as part of a plan of correction is not consistent with the purpose and regulatory authority for imposing a plan of correction. 42 C.F.R. � 493.1832. However, I see no need to analyze this issue in detail as CMS could have simply suspended Petitioner's certificate effective August 4, 2001, which would have caused Petitioner to cease testing. Pursuant to 42 C.F.R. � 493.1812, when CMS concluded that Petitioners' condition-level deficiencies posed immediate jeopardy, which must have been on or about July 30, 2001 (the date of the CMS notice at CMS Ex. 16), CMS had to wait five days after the date of the notice of suspension to effect the suspension, and the fifth day was August 4, 2001. See also 42 C.F.R. � 493.1810(b)(2). It is not clear to me why CMS ordered the laboratory to cease testing effective August 4 and ordered suspension effective August 7, 2001 when suspension could have been effective August 4. Further inquiry is not warranted however, as Petitioner has articulated no prejudice from what amounts to at most a procedural error in this case. I also note that this procedural error gave Petitioners three additional days to achieve compliance before the suspension was effective. (11)

Petitioners argue that due process was violated because Surveyor Apt did not conduct an exit conference and advise Petitioner Ali that immediate jeopardy was found. P. Brief II at 18-19. There are no constitutional, statutory, or regulatory requirements for an exit conference to be held at the end of a laboratory survey, and there is no decision of a court that suggests that due process requires such a conference. Even if one concluded that the State Operations Manual (SOM) required an exit conference, survey procedures specified in the SOM are not a source of due process rights, but rather, constitute CMS guidance to surveyors. As CMS notes, the SOM is a set of interpretive rules, not promulgated by notice and comment rule-making, and thus do not have the force or effect of law. CMS Reply at 14 (citing Avol v. Sullivan, 883 F.2d 659 (9th Cir. 1989); Beverly Health & Rehabilitation Services v. Thompson, 223 F.Supp. 2d 73 (D.D.C. 2002)); see also Cross Creek Health Care Center, DAB No. 1665 (1998). Furthermore, Surveyor Apt was clear in her testimony that while she felt on leaving the facility that immediate jeopardy existed, she did not actually make that decision until after she left the facility when she wrote the SOD and her decision was subject to review by CMS. Tr. 224-27.

Subsequent to hearing, Petitioners filed a document dated February 26, 2003, and styled "CMS did not comply with the Court's order with regard to Form 1557 (providing copies of the two worksheets)." Petitioners do not specify what relief they sought by the pleading, such as either compelled production or sanctions. Petitioners are in error at any rate. CMS did produce the Form 1557 at hearing, and provided a copy to Petitioner Ali. He elected not to offer the documents as evidence. Tr. 630-32. Petitioner Ali then asserted that there were other worksheets that he wanted. When I asked Petitioner Ali specifically what he was looking for, he had no idea, just a vague hope of finding helpful information. Tr. 632-34. As I pointed out at hearing, the state agency surveyor responsible for the survey was present at the hearing and testified. Thus, Petitioners had the opportunity to fully inquire about the basis for the deficiency citations and the process the surveyor followed. Petitioner never inquired as to whether there existed additional notes or worksheets of the surveyor not produced by CMS. I advised Petitioner Ali at hearing that I would entertain a post-hearing motion to compel production if Petitioner Ali could point to any evidence that there existed documents not produced that might assist Petitioners case. Tr. 634-35. Petitioner Ali pointed to no such evidence in his motion. I conclude that no grounds for post-hearing relief have been shown by Petitioners.

Petitioners complain that CMS surveyor Holly Stern was not called to testify at hearing. I note that Petitioners did not request that Ms. Stern be subpoenaed as a witness. Further, Ms. Stern's testimony would have been cumulative of testimony of Ms. Apt who was the surveyor Ms. Stern was observing. Any testimony Ms. Stern might have given about the immediate jeopardy determination would have been irrelevant as that determination is not subject to my review. I see no error in the fact that CMS did not call Ms. Stern as a witness - her testimony was not necessary to a prima facie showing of a deficiency.

My review of the procedures followed by CMS following the May 2001 survey reveals no substantive error that would have prejudiced Petitioners. Petitioners were given notice of the alleged deficiencies subject to hearing before me; they were given the opportunity to obtain counsel; they had a full hearing at which evidence was taken and a transcript made; and Petitioners submitted post-hearing briefs. My review of the alleged deficiencies has been de novo. My findings and conclusions that Petitioners had at least three condition-level deficiencies are based upon the evidence presented to me. Accordingly, I conclude that Petitioners' due process rights have been carefully and fully preserved throughout the process.

5. The existence of condition-level deficiencies provides a basis for the revocation of Petitioners' CLIA certificate and imposition of other remedies.

By letter dated August 17, 2001, CMS imposed sanctions against Petitioners including a CMP of $10,000 per day for August 4, 5, and 6, 2001, for a total of $30,000; cancellation of approval to receive Medicare and Medicaid payments effective August 7, 2001; suspension of the laboratory's CLIA certificate effective August 7, 2001; and revocation of the CLIA certificate effective September 28, 2001, if no request for hearing was timely filed. I found three condition-level deficiencies at Petitioners' laboratory which provide a basis for the revocation of Petitioners' CLIA certificate. Furthermore, the CMP effective August 4, 2001, clearly had a remedial purpose of encouraging Petitioners to achieve substantial compliance. Revocation of Petitioners' CLIA certificate is effective the date of this decision.

Petitioner, Rustom Ali, Ph.D., was notified by CMS of its actions in this case. The evidence shows that Petitioner Ali was the owner, operator, and laboratory director of the laboratory. Accordingly, Petitioner Ali is subject to the two-year ban on owning, operating, or directing another laboratory subject to CLIA pursuant to 42 U.S.C. � 263a(i)(3), effective the date of this decision.

IV. CONCLUSION

For the foregoing reasons, the CLIA certificate of Petitioner, Sonali Diagnostic Laboratory, is revoked effective the date of this decision and CMS may proceed to collect the CMP imposed.

JUDGE
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Keith W. Sickendick

Administrative Law Judge

FOOTNOTES
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1. Effective July 5, 2001, the Health Care Financing Administration (HCFA) was renamed the Centers for Medicare & Medicaid Services. 66 Fed. Reg. 35437.

2. CLIA is codified as 42 U.S.C. �� 263a, 1302, and 1395x(e). CLIA is often used to refer to both the statutes and implementing regulations found at 42 C.F.R. Part 493 and that is the case with this decision unless otherwise indicated. All references to 42 C.F.R. Part 493 are to the revision of October 1, 2000, which was in effect at the time of the survey of May 2001.

3. The July 30, 2001, CMS letter failed to list the violations of 42 C.F.R. � 493.801 among the condition-level violations from the January 25, 2001 survey and failed to list the violation of 42 C.F.R. � 493.803 among the condition-level violations identified during the May 31, 2001 revisit survey. CMS Ex. 16. I find no prejudice to Petitioners, however, as the violations are clearly reflected in the table which appears in CMS Ex. 16, at 2. Furthermore, the CMS letter of August 17, 2001, shows that Petitioners addressed the alleged violation of 42 C.F.R. � 493.803 (Tag D2016) as part of the plan of correction and allegation of compliance. CMS Ex. 17, at 2.

4. According to the CMS letter dated August 17, 2001, Petitioners' plan of correction and allegation of compliance was acceptable with regard to the alleged violation of 42 C.F.R. � 493.1453, clinical consultant, high complexity testing, Tag D6134. CMS Ex. 17, at 3; P. Ex. 18, at 1-2. CMS did not find the plans of correction and allegations of compliance acceptable for any of the other alleged condition-level deficiencies.

5. Ms. Apt discussed self-evaluation and remedial action at the hearing. Tr. 108-09, 250-57.

6. I can read the assertion as applying only to an Albumin test result, which is not at issue before me, but I chose to address it generally out of an abundance of caution.

7. It is troubling that both instrument printouts bear a date of "5 FEB 00" when, according to the laboratory report, the specimen was received at the laboratory on January 26, 2001. Clearly, Petitioners were having trouble with getting their equipment to record correct dates.

8. The plan of correction appears in the right column of the SOD admitted as P. Ex. 22, at 18-19. The plan of correction was signed by Petitioner Ali on August 10, 2001. P. Ex. 22, at 1.

9. Ms. Canlas' resume indicates that she worked at La Paz Regional Hospital until May 23, 2001. P. Ex. 18, at 13. Petitioner Ali testified that Ms. Canlas was employed at the laboratory on May 30, 2001, and Ms. Longares was employed on a part-time basis. Tr. 663.

10. Other exceptions specified in the regulation have no application in this case.

11. Petitioner did submit additional documentation following the July 30 CMS letter which was considered by CMS before the final imposition of sanctions letter was issued by CMS on August 17, 2001. CMS Ex. 17.

CASE | DECISION | JUDGE | FOOTNOTES