Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Mark Gary Hertzberg, M.D., P.C., |
DATE: August 3, 2001 |
- v - |
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Centers for Medicare & Medicaid
Services
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Docket No.C-99-763
Decision No. CR805 |
DECISION | |
DECISION I sustain the determination of the Centers for Medicare
& Medicaid Services (CMS)(1) to impose
remedies against Petitioner, a physician-owned laboratory known as Mark
Gary Hertzberg, M.D., P.C., pursuant to the Clinical Laboratory Improvement
Amendments of 1988, 42 U.S.C. � 263a et seq. (CLIA). The
remedies which I sustain include: (1) cancellation of Petitioner's approval
to receive Medicare payment for its services beginning 60 days from Petitioner's
receipt of CMS's June 23, 1999 remedy determination notice and continuing
until the date of this decision; and (2) revocation of Petitioner's CLIA
certificate effective the date of this decision.
I. BACKGROUND
As I discuss more fully below, CMS submitted 27 exhibits
(CMS Exs. 1 - 27) and Petitioner submitted five exhibits (P. Exs. 1 -
5) during the course of these proceedings. I receive into evidence CMS
Exs. 1 - 27 and P. Exs. 1 - 5. In receiving these exhibits into evidence,
I overrule any objection the parties made to making them part of the record. Petitioner is a clinical laboratory that is located in
Southfield, Michigan. Petitioner is owned and operated by Mark Gary Hertzberg,
M.D. Dr. Hertzberg serves as Petitioner's laboratory director. On February
25, 1999, surveyors employed by the Michigan Department of Consumer and
Industry Services (Michigan State survey agency) conducted a complaint
investigation of Petitioner to determine whether Petitioner was complying
with CLIA requirements. The surveyors made findings which were referred
to CMS. On June 23, 1999, CMS notified Petitioner that CMS had determined
that Petitioner had intentionally referred its proficiency testing samples
to another laboratory for analysis and it had been found to be deficient
in complying with CLIA requirements. CMS Ex. 4. CMS advised Petitioner
that it had determined to impose remedies against Petitioner which included
cancellation of Petitioner's approval to receive Medicare payment for
its services and revocation of Petitioner's CLIA certificate for at least
one year. Petitioner responded to CMS's notice with letters dated June 28, 1999, and August 9, 1999. CMS Exs. 20 and 21. Petitioner denied CMS's allegations and contended that CMS had misunderstood the manner in which the laboratory dated its worksheets.
CMS responded to Petitioner's letters on August 17, 1999.
CMS Ex. 22. CMS clarified and set forth in more detail its basis for imposing
CLIA sanctions on Petitioner. In this second notice, CMS advised Petitioner
that it had based its determination to impose remedies on its finding
that Petitioner had referred proficiency testing samples to another laboratory
for testing or had improperly collaborated with another laboratory in
the testing of proficiency testing samples. CMS asserted that this conduct
constituted noncompliance with 42 C.F.R.� 493.801, the CLIA condition
concerning proficiency testing. CMS provided a point by point response
to Petitioner's arguments concerning the laboratory records. CMS also
withdrew one of the deficiencies not related to the proficiency testing. Petitioner requested a hearing on August 19, 1999, and
the case was assigned to me on September 30, 1999 for a hearing and a
decision. On September 3, 1999, CMS forwarded to Petitioner certain
additional evidence upon which it had based it determinations. This evidence
was a spread sheet that compared the proficiency testing results reported
by Petitioner in 1998 with the identical (and nearly identical) results
reported by eight other area laboratories. CMS Ex. 23. The nine laboratories
at issue in this case employed either Deborah Sabo or Rene Wheatley as
testing personnel. CMS Ex. 25 at 3. CMS moved for summary disposition. CMS's motion was accompanied
by 25 exhibits which I identify as CMS Exs. 1 - 25. Petitioner filed a
response brief in opposition to CMS's motion. Attached to Petitioner's
brief were three documents labeled P. Exs. 1 - 3. CMS filed a reply in
support of its motion for summary disposition. Petitioner then moved to
file a surreply. I granted Petitioner's request and accepted Petitioner's
accompanying surreply into the record. On May 16, 2000, CMS submitted additional documents, including
the transcript of the in-person hearing in the case of Stanley Boykansky,
M.D., DAB CR690 (2000) and CMS's posthearing brief in Boykansky.(2)
I identify the transcript as CMS Ex. 26, and the copy of the brief as
CMS Ex. 27. Petitioner objected to the admission of these submissions,
but offered Boykansky's posthearing brief in Boykansky should CMS's
posthearing brief be admitted. (Petitioner and Boykansky were represented
by the same counsel.) I identify Boykansky's posthearing brief in Boykansky
as P. Ex. 4. On May 31, 2000, Petitioner filed a motion for summary
disposition with a supporting brief. CMS then filed a response in opposition
to Petitioner's motion accompanied by one attachment. Petitioner filed
a reply. On September 25, 2000, I convened a prehearing conference
in which I informed the parties that I was denying Petitioner's motion
for summary disposition, and that I would address Petitioner's arguments
in my written decision in this case. Pursuant to Petitioner's request,
I scheduled an in-person hearing for November 8, 2000. On
November 2, 2000, this hearing was canceled at the request of the parties,
and the parties were given additional time to submit written documents
which they said would obviate the need to take in-person testimony.
On November 2, 2000, the parties filed a stipulation that if Ms. Sabo, the testing personnel for Petitioner and the Boykansky laboratory, were to testify in this matter, her testimony would be the same as her April 12, 2000 testimony given in the hearing before the ALJ in Boykansky and contained in the transcript from that proceeding (CMS Ex. 26). Petitioner subsequently submitted a supplemental affidavit by Ms. Sabo. I mark this document as P. Ex. 5. CMS and Petitioner simultaneously filed concluding briefs and waived the filing of response briefs.
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.(3) The purpose of
the CLIA requirements is to ensure the accuracy and reliability of laboratory
tests, and hence the health and safety of those tested. See H.R.
Rep. No. 899, 100th Cong. 2d Sess. 8 (1988), reprinted
in 1988 U.S.C.C.A.N. 3828, 3829. CLIA grants the Secretary of the
United States Department of Health and Human Services broad enforcement
authority, including the ability to suspend, limit, or revoke the certificate
of a laboratory that is out of compliance with one or more requirements
for a certificate. A laboratory's CLIA certification is dependent upon whether
the laboratory meets the conditions of certification set out in the statute
and regulations. 42 U.S.C. � 263a(f)(1)(E); 42 C.F.R. � 493.1 et
seq. The CLIA regulations establish both conditions and
standards for participation under CLIA. Conditions of participation
are set forth as broadly stated general requirements which must be met
in order for a laboratory to qualify under CLIA. Standards of participation
are set forth as specific quality requirements which
must be met by a laboratory in order to meet the more general requirements
of conditions of participation. Standards are subparts of the more broadly
stated conditions. A failure by a laboratory to comply with one or more
standards may be so serious as to constitute failure to comply with the
condition of which the standards are subparts. Stanley Boykansky, M.D.,
DAB No. 1756, at 18 - 19 (2000). A key component of the statutory and regulatory program
to assure that laboratories holding CLIA certificates are competent to
perform tests of moderate and high complexity is the requirement for participation
in a proficiency testing program that is approved by CMS, as outlined
in 42 C.F.R. Part 493, Subpart H. Among the requirements of that subpart
are the following: a participating laboratory must test proficiency testing
samples it receives in the same manner as it tests patient samples; must
not communicate the results of its tests to other laboratories prior to
the deadline for reporting results; must not refer proficiency testing
samples to another laboratory for analysis; and must document and maintain
documentation for the handling, preparation, processing, examination,
and each step in the testing and reporting of results for all proficiency
testing samples. 42 C.F.R. � 493.801. The CLIA regulations authorize CMS or its designee (in
this case the Michigan State survey agency) to conduct validation inspections
of any accredited or CLIA-exempt laboratory in order to determine whether
the laboratory is in compliance with CLIA requirements. 42 C.F.R. � 493.1780(a).
The regulations confer enforcement authority on
CMS in order to assure that laboratories comply with CLIA. 42 C.F.R. �
493.1800. Where CMS determines that a laboratory is not complying with
one or more CLIA conditions, CMS may impose as remedies principal
sanctions against the laboratory which may include suspension and/or revocation
of the laboratory's CLIA certificate. 42 C.F.R. � 493.1806(a), (b). CMS
may also impose alternative sanctions against a noncompliant
laboratory in lieu of or in addition to principal sanctions. 42 C.F.R.
� 493.1806(c). Additionally, CMS may cancel a laboratory's approval to
receive Medicare payments for its services where the laboratory is found
not to be complying with one or more CLIA conditions. 42 C.F.R. � 493.1807(a). A laboratory that is dissatisfied with a determination by CMS to impose sanctions against it may request a hearing before an administrative law judge to contest CMS's determination. 42 C.F.R. � 493.1844. The CLIA regulations at 42 C.F.R. � 493.1844(a)(2) and (3) incorporate by reference the hearing procedures and the request for review provisions in 42 C.F.R. Part 498, Subparts D and E. The standard of proof that is employed
at a hearing concerning CMS's determination that a laboratory is not in
compliance with CLIA conditions is preponderance of the evidence. CMS
has the burden of coming forward with sufficient evidence to prove a prima
facie case that the laboratory is not complying with one or more CLIA
conditions. The laboratory has the ultimate burden of rebutting, by a
preponderance of the evidence, any prima facie case of noncompliance that
is established by CMS. Edison Medical Laboratories, Inc., DAB No.
1713 (1999); Hillman Rehabilitation Center, DAB No. 1611 (1997). II. ISSUE, FINDINGS OF FACTS AND CONCLUSIONS OF LAW
The issue in this case is whether Petitioner failed to
comply with one or more CLIA conditions of participation, thereby giving
CMS the authority to impose remedies against Petitioner, including canceling
Petitioner's approval to receive Medicare payments and revoking Petitioner's
CLIA certificate.
I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail and address Petitioner's arguments.
Petitioner asserts that CMS did not give it proper notice
of condition-level deficiencies in accordance with 42 U.S.C. � 263a(i),
42 C.F.R. � 493.1842(b), and 42 C.F.R. � 493.1844(g). Petitioner argues
that, as a result of this alleged failure, CMS is without authority to
impose principal sanctions against Petitioner. First, Petitioner argues that the initial (June 23, 1999)
notice was improper because it imposed principal sanctions, but did not
cite any condition-level deficiencies and was based on the attached Statement
of Deficiencies (HCFA Form 2567). The Statement of Deficiencies also listed
only standard-level deficiencies cited by the surveyors. Petitioner asserts
that CMS cannot impose principal sanctions pursuant to a finding of only
standard-level deficiencies. Petitioner argues that the "surveyors found
no condition level deficiencies, and they cannot simply be created by
HCFA as a result of the standard level violations alleged." Brief in support
of Petitioner's motion for summary disposition at 9. Petitioner's assertions that CMS cannot impose principal
sanctions for standard-level deficiencies and that CMS is limited to the
surveyors' findings is premised on a misreading of the CLIA sanction process.
Appellate panels of the Departmental Appeals Board have repeatedly ruled
that "a laboratory can be so pervasively noncompliant with standards as
to have failed to have complied with the overall condition." Boykansky,
DAB No. 1756, at 18 - 19. Therefore, the violation of a standard may constitute violation of a condition. Further, CMS is not limited to the surveyors' findings. Rather, CMS is authorized to make independent determinations about the nature and severity of a laboratory's noncompliance with CLIA requirements.(4) Boykansky, DAB No. 1756, at 7. In the first notice, CMS informed Petitioner that CMS had determined that Petitioner had referred proficiency testing samples to another laboratory for analysis and that, based on this failure, it proposed sanctions of cancellation of Petitioner's approval to receive Medicare payments and revocation of Petitioner's CLIA certificate. CMS Ex. 4. In the first notice, CMS expressly cited 42 C.F.R. � 493.801(b)(4), the CLIA standard concerning intentional referral of proficiency testing samples. This standard specifically mandates the principal sanction of certificate revocation. Therefore, the fact that the specific regulatory provisions cited in the attached Statement of Deficiencies concerned only standard level deficiencies does not make the notice inadequate to impose principal sanctions.Second, while Petitioner acknowledges that the second
notice (August 17, 1999) cited a condition-level deficiency for noncompliance
with 42 C.F.R. � 493.801 (enrollment and testing of samples), and two
new standard-level deficiencies, 42 C.F.R.� 493.801(b)(3) and 42 C.F.R.
� 493.801(b)(5), Petitioner argues that the second notice is deficient
because it was received after the sanctions were imposed and provided
no opportunity to respond or appeal previously undisclosed deficiencies.
I disagree. An appellate panel has determined that CMS may subsequently amend its initial notice to impose CLIA sanctions.(5) Boykansky, DAB No. 1756, at 6. CMS issued its
second notice prior to Petitioner's request for a hearing which was dated
August 19, 1999 (although Petitioner did not receive the second notice
prior to submitting its request). CMS inadvertently failed to enclose
the chart of the nine laboratories' results on which it based its determination
of referral or collusion. This omission was corrected by a September 3,
1999 mailing. Petitioner was fully informed of CMS's position and had
a copy of the evidence upon which CMS based its decision prior to any
substantive development of the record in this case. Petitioner has had
a full opportunity to develop its rebuttal to CMS's allegations. Thus,
the second notice constitutes an acceptable amendment of the first notice. Petitioner argues that it was prejudiced by this sequence
of events because: (1) the date of the termination of its Medicare payments
was based on the allegedly invalid first notice and was therefore miscalculated;
and (2) Petitioner was not given an opportunity to respond to the second
notice prior to the termination of Medicare payments. Neither of these factors constitutes prejudice in this case. Since I conclude that the first notice was valid, the date of the termination of Medicare payments was properly calculated. Furthermore, pursuant to the information in the first notice, Petitioner was given an opportunity to respond to the determinative allegation that it had referred proficiency testing samples to another laboratory for testing. While I agree that Petitioner may have theoretically been in a better position to respond had it been given all of CMS's information as of June 23, 1999, including the chart of coincidental results from the nine laboratories, CMS's failure to provide the information at that time made no practical difference in this case. Though Petitioner has denied collusion or referral, it has offered no persuasive evidence to rebut CMS's findings or to show in any way that the amended notice hampered its ability to rebut CMS's findings. Therefore, Petitioner has failed to show any prejudice resulting from CMS's amended notice.
Petitioner colluded with other laboratories during 1998
in the performance of proficiency testing. The evidence in this case provides
overwhelming support for this conclusion. Petitioner did not rebut the
evidence of collusion. The condition of participation that is stated at 42 C.F.R.
� 493.801 requires that a clinical laboratory must enroll in a proficiency
testing program that meets defined criteria and which is approved by the
United States Department of Health and Human Services. It also requires
laboratories to test the proficiency testing samples in the same manner
as patients' specimens. Petitioner enrolled in an approved proficiency testing
program that is operated by the American Association of Bioanalysts (AAB).
See CMS Ex. 24. Petitioner received a group of proficiency testing
samples from the AAB at regular intervals each year. Other clinical laboratories
who were enrolled in the AAB proficiency testing program received the
same samples at the same time. I take notice of the fact that the AAB
refers to each mailing of samples to laboratories for proficiency testing
as an "event." The object of the proficiency testing exercise is for
each participating laboratory to test its samples independently as if
they are patient specimens and to report the results of its tests to the
AAB. The laboratories were required to test five samples for each analyte.
The AAB scores the results for the tests that are performed for each event
and rates each laboratory's testing competency for that event based on
the scores that the laboratory obtains. Petitioner was required to test
for cholesterol, HDL cholesterol, glucose, triglycerides, iron, thyroid
stimulating hormone (TSH), total thyroxine, triiodothyronine, and thyroid
uptake. CMS Ex. 8, CMS Ex. 25 at 3. For many of the proficiency tests that Petitioner and
other laboratories were asked to perform in 1998, there was no such thing
as a single "correct" score. CMS Ex. 24 at 3 - 4. For these tests, the
AAB accepts scores that fall within a range of possible scores as "correct"
because of the wide range of variables that are involved in the testing
process. Id. For example, the third testing event of 1998 included
testing triglyceride samples. CMS Ex. 25 at 39. For the first sample of
that event, a laboratory would receive a passing score if it identified
a triglyceride level which fell anywhere in a range of values of between
140 to 233. Id. For the fourth sample, acceptable values ranged
between 96 to 160. Id. During 1998, Petitioner and eight other laboratories located
in the Detroit, Michigan area submitted proficiency test results that
were virtually identical. CMS Ex. 24 at 3. Indeed, on numerous tests,
Petitioner and the other eight laboratories submitted scores that were
precisely identical. Id. The inference that arises from Petitioner
and eight other laboratories submitting virtually identical proficiency
testing results for numerous samples in three testing events during a
single year - especially given the variable factors that were at play
- is that Petitioner and the other laboratories colluded with each other
to produce those results. There is no reasonable likelihood that nine
laboratories independently would produce nearly identical results on numerous
proficiency tests for three events in a single year. CMS Ex. 24 at 4;
CMS Ex. 25 at 4 - 5. The evidence which supports my conclusion that Petitioner
and eight other laboratories colluded with each other to produce nearly
identical proficiency testing results in 1998 includes the declarations
of two experts: Dennis W. Jay, Ph.D., DABCC, Technical Director of the
AAB Proficiency Testing Service (CMS Ex. 24) and Richard J. Benson, CLS,
MT, Chief, Laboratory Improvement Section, Bureau of Health Systems, of
the Michigan State survey agency (CMS Ex. 25). I find these experts to
be well-qualified and their opinions to be persuasive. As to the testing for triglycerides and total cholesterol, Dr. Jay stated in his declaration:
CMS Ex. 24 at 3 - 4. Dr. Jay concluded:
Id. at 4. Mr. Benson came to the same conclusion. CMS 25 at 4 -
5. In his letter recommending the revocation of Petitioner's CLIA certificate,
Mr. Benson wrote:
CMS Ex. 2 at 2.
I find reinforcement for my conclusion that there existed
no reasonable probability that the nine laboratories would independently
arrive at identical proficiency testing results on multiple occasions
by the existence of differences in testing conditions among the laboratories
which would have affected the test results produced by each laboratory.
Although some of the laboratories had the same model spectrometer - a
device that was used to perform proficiency testing - others had different
models. CMS Ex. 26 at 77. All of the spectrometers were calibrated separately.
Id. at 77 - 78. Each of the nine laboratories had its own supply
of controls and reagents. Id. at 76 - 77. Room temperature varied
from laboratory to laboratory. Id. at 78. The evidence which I have discussed so far indicates that
Petitioner and the other eight laboratories colluded in 1998 to produce
nearly identical proficiency testing results. Additionally, the following
evidence supports my finding that these laboratories engaged in collusion. First, the evidence establishes that the opportunity for
collusion existed. All nine of the laboratories submitting identical proficiency
testing results employed as testing personnel one of two individuals,
Ms. Sabo and Ms. Wheatley. CMS Ex. 25 at 3. During 1998, Petitioner employed
Ms. Sabo. CMS Ex. 26 at 42. Ms. Sabo and Ms. Wheatley are well-acquainted.
Id. at 42. In the Boykansky hearing, Ms. Sabo denied colluding
with other laboratories or individuals. CMS Ex. 26 at 21. She asserted
that she performed each proficiency test for the Boykansky laboratory
in the same manner that she performed tests on patients' specimens and
that she integrated her proficiency testing into her routine specimen
testing. Id. at 18 - 19, 20. Ms Sabo averred that discrepancies
between proficiency testing data and the results that she reported for
proficiency testing could be explained as simple errors on her part. Id.
at 30 - 39. The ALJ in Boykansky, found that Ms. Sabo's denials of complicity in collusion were not credible. He wrote:
Boykansky, DAB CR690, at 11. My review of the transcript of Ms. Sabo's testimony supports
the ALJ's conclusions in Boykansky. Further, Petitioner has introduced
no evidence or arguments in this case that would cause me to reject the
ALJ's conclusions as to the significance of Ms. Sabo's testimony in this
case. Second, the evidence shows that the proficiency testing
results that Petitioner submitted were not consistent with Petitioner's
own records of its proficiency tests. Such evidence strongly supports
a conclusion that Petitioner manipulated its proficiency testing results
in order to submit results that conformed to those which were submitted
by the other eight laboratories. The evidence shows that Petitioner rounded
proficiency testing values in a manner that is inconsistent with
accepted practice in order to produce results that conformed with the
results obtained by the other eight laboratories. CMS Ex. 25 at 8 - 11.
Thus, in March 1998, Petitioner recorded 162.5 and reported 163; but it
also recorded its fourth triglyceride sample as 182.5 and reported it
as 182. Id. at 8 - 9. In June, Petitioner recorded 187.5 and reported
188; but it also recorded its first glucose sample as 178.5 and reported
it as 178. Id. at 9-10. In October, Petitioner recorded 22.7 and
reported 23, but it also recorded 25.7 for its first HDL sample and reported
it 25. Id. at 11. These rounding practices are logically inconsistent, but
each one results in a figure which matches values reported by other Sabo/Wheatley
laboratories. In March 1998, Petitioner reported 182 as its result for
the fourth AAB triglyceride sample and so did six of the eight Sabo/Wheatley
laboratories. CMS Ex. 23 at 2. In June 1998, Petitioner reported 178 as
its result for the first glucose sample and so did four of the eight Sabo/Wheatley
laboratories that test for that analyte. CMS Ex. 23 at 3. In October 1998,
Petitioner reported 25 as its result for the first HDL sample and so did
all eight of the other Sabo/Wheatley laboratories. CMS Ex. 23 at 4.
The logical inference is that the values Petitioner reported
were obtained in whole or in part from analysis of samples in the other
eight laboratories. This inference is supported by other anomalies in
its worksheets. For example, in June 1998, like the six other laboratories
testing for triiodothyronine, Petitioner reported a result of 700 for
the third proficiency test sample. However, according to its own laboratory
worksheet, its test result was 701, not 700. CMS Ex. 23 at 3, CMS Ex.
25 at 11 - 12. Third, the evidence shows that Petitioner did not document
its testing of proficiency testing samples in the same manner as it documented
the testing process for patient samples. Patient results for cholesterol,
HDL, triglycerides, and glucose are almost always expressed as integers
in the worksheets. However, proficiency testing results are carried out
to one decimal place. CMS Ex. 25 at 8 - 10 . This raises additional questions
as to whether the proficiency testing was done as part of Petitioner's
regular workload. In rebuttal, Petitioner asserts that "results received
by AAB represent small standard deviations and thus a high probability
that multiple laboratories produced the same figures." Petitioner brief
in response to CMS memorandum of law in support of summary affirmance
at 13. In support of this representation, Petitioner relies on the summary
of proficiency testing results for TSH and triglycerides submitted to
AAB for the third quadrimester of 1998. P. Ex. 3. This exhibit does not support Petitioner's arguments for
the following reasons:
Petitioner also argues that Ms. Sabo had no motive to
falsify the proficiency testing results for Petitioner because it would
not save her any work. However, that argument is not persuasive in this
context. As the appellate panel concluded in Boykansky:
Boykansky, DAB No. 1257, at 9. Finally, Petitioner argues that although Ms. Sabo testified
that she performed laboratory technician services in 13 laboratories in
1998, only four of these were cited for collusion. Petitioner asserted
that CMS has ignored the fact that Ms. Sabo worked at twice as many laboratories
that did not have the same results as Petitioner and this fact "clearly
shows that neither Ms. Sabo nor Petitioner intentionally referred any
proficiency testing samples to another laboratory as contemplated by CLIA."
Petitioner reply to CMS response to Petitioner motion for summary disposition
at 3 - 4. I do not find this argument persuasive for the following
reasons. First, the record is silent as to the test results of these laboratories.
Second, even if it is assumed that these laboratories filed different
results, there is no way to know whether there were factors as to these
laboratories which would have interfered with collusion. For example,
perhaps these laboratories were not enrolled in the AAB program; perhaps
they used significantly different equipment or methods; or perhaps the
laboratory directors supervised the proficiency testing process more diligently.
If the circumstances and testing results of these laboratories were relevant,
Petitioner had the burden to produce such evidence and it has failed to
do so. Identical proficiency testing results submitted by up to nine laboratories, coupled with discrepancies between laboratory worksheets and reported proficiency testing results and the opportunity for collusion is persuasive evidence of collaboration among laboratories. Boykansky, DAB No. 1756, at 8 - 11. Therefore, I conclude that CMS has adduced persuasive evidence that Petitioner engaged in collusion with other laboratories in testing proficiency testing samples and Petitioner has offered no persuasive arguments or evidence which rebut CMS's showing of collusion.
The standards for the CLIA condition of participation
regarding testing of proficiency testing samples set forth at 42 C.F.R.
� 493.801 require that a clinical laboratory must test proficiency test
samples in the same manner as it tests patients' specimens; must not engage
in inter-laboratory communications pertaining to the results of proficiency
testing; and must not refer proficiency testing samples to other laboratories
for analysis. 42 C.F.R. � 493.801(b)(1), (3), and (4). Petitioner did
not comply with these standards during 1998. The manner in which Petitioner performed proficiency testing
- by colluding with other laboratories to obtain a collectively determined
result - clearly was a departure from standard procedures for testing
patients' specimens and involved communicating with other laboratories
about the results of proficiency testing. This behavior was a violation
of 42 C.F.R. � 493.801(b)(1) and (3). I also find that Petitioner's conduct constitutes a violation
of 42 C.F.R. � 493.801(b)(4) which prohibits intentional referral of testing
samples to another laboratory. In doing so, I reject Petitioner's argument
that section 493.801(b)(4) is limited to cases where physical transfer
of the testing sample is established. The question of physical transport was addressed by an appellate panel in Oakland, DAB No. 1755 (2000). It concluded that, while use of the word "send" in the first sentence of 42 C.F.R. � 493.801(b)(4) indicates a physical transfer, that sentence was not presented as a definition of "intentional referral" but could be read as a separate prohibition. The appellate panel noted that the second sentence of that section states: "Any laboratory that HCFA determines intentionally referred its proficiency testing samples to another laboratory for analysis will have its certification revoked for at least one year." Therefore, the appellate panel concluded as follows:
* * *
Oakland , DAB No. 1755, at 21 - 22. Consequently, I conclude that Petitioner violated 42 C.F.R. � 493.801(b)(4). That provision codifies a statutory provision, found at 42 U.S.C. � 263(a)(i)(4), requiring CMS to revoke Petitioner's CLIA certificate for at least one year.
Petitioner's owner and laboratory director, Dr. Hertzberg, did not sign the attestation statements that were submitted as part of the three proficiency testing events in 1998 in violation of the standard that is stated at 42 C.F.R. � 493.801(b)(5). CMS Exs. 8, 10, 12. That standard requires that a clinical laboratory's director must sign proficiency testing attestations. CMS asserts that Ms. Sabo, who was employed by Petitioner as its testing personnel and not as Petitioner's laboratory director, signed the statements.(6) Petitioner did not dispute this assertion.
If standard level deficiencies are sufficiently egregious,
they will constitute a failure by a laboratory to comply with the overall
condition of which the standards are subparts. Boykansky, DAB No.
1756, at 18 - 19. That is certainly the case here. I conclude that Petitioner's violation of the standards for testing of samples in a proficiency testing program set forth in 42 C.F.R. � 493.801(b) constitutes failure to comply with the condition of participation stated at 42 C.F.R. � 493.801. Petitioner's collusion in the performance of proficiency testing was a deliberate effort to frustrate the purpose of proficiency testing, which is to assure that a clinical laboratory establishes its competence through an impartial proficiency testing process. Petitioner's collusion was so egregious as to make its participation in a proficiency testing program meaningless. Petitioner's collusion undermined the integrity of the proficiency testing process for other laboratories.(7) Furthermore, such collusion by Petitioner meant that Petitioner was not performing its proficiency tests in the manner that it normally tested patients' specimens, was engaging in inter-laboratory communication about proficiency testing samples, and was referring proficiency testing samples to other laboratories. Finally, Petitioner's owner and laboratory director failed to sign required attestation statements that it submitted as part of the first three proficiency testing events in 1998.
CMS is authorized to impose principal sanctions, including
revocation of a laboratory's CLIA certificate, as remedies for a laboratory's
failure to comply with one or more CLIA conditions. 42 C.F.R. � 493.1806(a),
(b). CMS may impose the additional remedy of cancellation of a laboratory's
approval to receive Medicare payment for its services where the laboratory
has not complied with one or more CLIA conditions. 42 C.F.R. � 493.1807. As discussed above, the evidence in this case establishes that Petitioner failed to comply with a CLIA condition of participation. Therefore, CMS is authorized to cancel Petitioner's approval to receive Medicare payment for its services and to revoke Petitioner's CLIA certificate. |
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JUDGE | |
Alfonso J. Montano Administrative Law Judge
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FOOTNOTES | |
1. The Health Care Financing Administration (HCFA) has been renamed Centers for Medicare & Medicaid Services (CMS). For purposes of this decision, reference to either name will constitute reference to the same entity. In this regard, I point out, for example, that the CMS exhibits are marked with the acronym "HCFA". I have renamed these exhibits by substituting CMS for HCFA, and I refer to them as CMS exhibits. 2. With this submission as well as at other times during the proceedings, CMS submitted copies of Civil Remedies Division decisions. Since these decisions were submitted for my convenience, I do not consider them to be proposed exhibits. Both parties were given ample opportunity to address the legal significance of these decisions throughout the extensive briefing process in this case. 3. CMS may deem a laboratory to meet all applicable CLIA program requirements if the laboratory obtains a certificate of accreditation, as required in 42 C.F.R. Part 493, Subpart D, and meets the other requirements listed in 42 C.F.R. � 493.551(b). 4. As the ALJ in Boykansky reasoned:
5. As explained by the ALJ in Stanley Boykansky, M.D., DAB CR690, at 6, the regulations which govern CLIA enforcement by CMS and hearings involving an alleged failure by a clinical laboratory to comply with CLIA requirements do not prohibit CMS from amending or superseding a notice of an initial determination. See 42 C.F.R. Part 493, Subpart R.; 42 C.F.R. Part 498, Subpart D; 42 C.F.R. � 493.1844(a)(2). 6. At the in-person hearing in Boykansky, Boykansky and Petitioner's counsel asked Ms. Sabo if she had served as Boykansky's "technical supervisor." CMS Ex. 26 at 26. The ALJ in Boykansky surmised that counsel was trying to elicit testimony from Ms. Sabo to the effect that she served as the functional equivalent of a laboratory director. The ALJ rejected this approach, writing:
Boykansky, DAB CR690 at 13 - 14. 7. As Dr. Jay states: When, as occurred here, a group of laboratories reports
[proficiency testing] results that were not obtained as required, i.e.,
through independent testing of samples in the same manner as patient samples
are tested, the integrity of the entire proficiency testing program is
undermined. This is because proficiency testing is graded on a "curve." To determine what constitutes a "passing grade" for a
particular analyte, results from laboratories using the same methodology
and equipment are grouped together. The average value reported determines
the range of "correct" responses. Because any collaboration among laboratories
necessarily skews the calculation of the average, collaboration or referral
corrupts the grading range against which all laboratories in the given
group are evaluated. Consequently, referral and/or collaboration not only
helps insure those who engage in this improper activity obtain a passing
grade, regardless of the quality of their proficiency testing; but it
also may so disrupt the average values against which
all other similarly situated laboratories are rated as to make other laboratories
appear to have performed poorly when, in fact, they may be reporting results
well within what should be tolerable limits of accuracy. In addition,
false information concerning the reproducibility of the method is displayed
to the public, which could cause errors in judgment when evaluating laboratory
tests. CMS Ex. 24 at 4 - 5. |
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