SUBJECT: Vijay Sakhuja, M.D.,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Vijay Sakhuja, M.D., appealed the April 19, 2004 decision by Administrative Law Judge (ALJ) Anne E. Blair upholding the action by the Centers for Medicare & Medicaid Services (CMS) revoking his physician laboratory certificate issued under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), and cancelling approval for Dr. Sakhuja to receive Medicare payments for laboratory services. Vijay Sakhuja, M.D., DAB CR1167 (ALJ Decision). The appealed actions were based on a review by the New York State Department of Health (the State agency) finding deficiencies at Dr. Sakhuja's laboratory that posed immediate jeopardy to patient health and safety.

Applicable law and regulations

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. The purpose of 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, 100^th Cong. 2d Sess. 8 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3829.

A laboratory that is not CLIA-exempt must have a CLIA certificate meeting the requirements of 42 C.F.R. Part 493. ⁽¹⁾ 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. Part 493. Under the applicable requirements, the conditions of certification vary depending on the level of complexity of the testing the laboratory performs. ⁽²⁾ Id. The regulations set forth conditions and standards for certification. Each condition of certification represents a general requirement that must be met for certification. Standards are the specific components of the conditions, and failure to meet one or more standards may be so serious as to constitute a failure to comply with the conditions of certification.

Failure by a laboratory to comply with even a single applicable condition may be grounds for suspension or revocation of the CLIA certificate. CMS may suspend, limit or revoke the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions. 42 C.F.R. � 493.1806.

Standard of Review of an ALJ Decision

Dr. Sakhuja presented his request for review without representation by counsel, so we consider his submission without regard to form, and in the best light consistent with the applicable standard of review. The standard of review for the underlying ALJ decision on factual issues is whether the ALJ decision is supported by substantial evidence in the whole record. The standard of review on issues of law is whether the ALJ decision is erroneous. An error of procedure may be a basis for modifying, reversing or remanding an ALJ decision if the error is prejudicial. Board Guidelines - Appellate Review of Decisions of Administrative Law Judges in Cases under CLIA and Related Statutes, http://www.hhs.gov/dab/guidelines/clia.html.

Factual and Procedural Background

Dr. Sakhuja maintained a physician's office laboratory in Jamaica, New York. The State agency performed a biannual recertification survey on September 28, 2001, after giving 18 days notice that it would be conducting the survey and indicating what documents would be reviewed. CMS Exhibits (Exs.) 2 and 4. The State agency surveyors returned on October 26, 2001, but, because the laboratory was closed on that day, the State agency instead met with Dr. Sakhuja in his Manhattan office. On October 29, 2001, the State agency returned to the laboratory to complete the survey review.

On November 7, 2001, CMS notified Dr. Sakhuja that, based on the State agency recertification survey, CMS determined that the laboratory's deficiencies posed immediate jeopardy. Consequently, CMS indicated, the CLIA certificate would be suspended as of November 16, 2001 and all Medicare payments would be cancelled. In addition, CMS notified Dr. Sakhuja that the CLIA certificate would be cancelled as of January 16, 2002. CMS informed Dr. Sakhuja that if he promptly submitted credible allegations of compliance, the State agency would conduct a follow-up visit that could lift these sanctions, and he was also informed that he could request a hearing on the revocation determination.

On January 3, 2002, Dr. Sakhuja filed a timely request for a hearing. During the same period, Dr. Sakhuja made some attempts to come into compliance. On December 28, 2001, Dr. Sakhuja submitted some materials that could be considered a plan of correction, but the State agency found these materials unacceptable. On January 16, 2002, Dr. Sakhuja again submitted a plan of correction that the State agency found to be unacceptable.

On February 11 and 12, 2003, the ALJ held a two-day hearing during which oral testimony and exhibits were presented. On April 19, 2004, the ALJ issued a decision affirming CMS's actions. Specifically, the ALJ made the following Findings of Fact and Conclusions of Law (FFCLs).

1. Petitioner [Dr. Sakhuja] failed to comply with the CLIA "condition" of patient test management.

1. Petitioner failed to meet the CLIA patient test management "standard" requiring a laboratory to have written policies and procedures.
2. Petitioner failed to meet the CLIA patient test management "standard" requiring a laboratory to have a record system to ensure reliable identification of patient specimens or to assure that accurate test results are reported.
3. Petitioner failed to meet the patient test management "standard" requiring a laboratory to produce records confirming that he had referred specimens for testing only to a laboratory that had a valid certificate to perform that test.
1. Petitioner failed to meet the CLIA "condition" of quality control.
1. Petitioner failed to meet the CLIA quality control "standard" requiring the laboratory to follow the manufacturer's instructions for test system operation and performance and to have a procedures manual describing its process for testing.
2. Petitioner failed to meet the CLIA quality control "standard" of providing a laboratory space and environmental conditions necessary for conducting the services offered.
3. Petitioner failed to meet the CLIA quality control "standard" requiring the laboratory to use testing methods and equipment that provide accurate and reliable test results and test reports and to use laboratory materials in a manner that ensures they are of good quality.
4. Petitioner failed to meet the CLIA quality control "standard" of having a written procedures manual for the performance of all analytical methods used by the laboratory.
5. Petitioner failed to meet the CLIA quality control "standard" requiring the laboratory to document and maintain records of all quality control activities for at least two years.
6. Petitioner failed to meet the CLIA quality control "standard" for syphilis serology that a laboratory's equipment, controls, and techniques conform to manufacturers' specifications.
2. Petitioner failed to meet the CLIA Laboratory Director "condition" requiring the laboratory to have a director who ensures the laboratory's compliance with CLIA requirements.
3. Petitioner failed to meet the CLIA Laboratory Director "condition" requiring the laboratory to have a quality assurance program.
4. I have no authority to overturn CMS's determination that Petitioner's noncompliance with CLIA requirements presented immediate jeopardy to patients.
5. The surveyors' procedures did not invalidate the deficiencies found during the survey of Peitioner's laboratory.
6. Petitioner's other arguments are unavailing to him in this case.

Dr. Sakhuja's Arguments on Appeal

1. ALJ Exclusion or Discounting of Evidence

Dr. Sakhuja asserts that the ALJ excluded evidence which "demonstrated the error in the State agency findings." Review Request at 3. The record describes only a single exhibit that the ALJ excluded, proposed Petitioner's Exhibit 46. That exhibit contained patient records from 1999, significantly prior to the period under review in the survey, which Dr. Sakhuja stated he was offering to demonstrate how he had kept records prior to converting to an electronic recordkeeping system. The ALJ excluded this material as irrelevant because it was largely prior to the period under review in the survey and, thus, not relevant to the survey findings. We agree with the ALJ's ruling excluding this material because, even if the material demonstrated that the recordkeeping system in 1999 was exemplary, that demonstration would not undercut the validity of the survey findings of noncompliance that are the basis for the sanction at issue.

Dr. Sakhuja also asserts that the ALJ erred in finding that Dr. Sakhuja's arguments had "no evidentiary value" because he was not sworn in. Review Request at 6-8. We do not agree either with Dr. Sakhuja's characterization of the ALJ Decision or with his contention that there was a basis for reversal. The ALJ Decision makes clear that the ALJ gave due consideration to Dr. Sakhuja's arguments but these arguments were simply not persuasive in light of the overwhelming evidence supporting the findings of noncompliance by surveyors. While Dr. Sakhuja argues that the findings were "based on unsupported leaps" and "unsupported by substantial facts," in fact the ALJ Decision included a detailed discussion of the evidence supporting those findings. ALJ Decision at 6-21. As a result, we conclude that the ALJ did not err as a matter of law in considering the evidence.

2. Surveyor Bias

Dr. Sakhuja alleges that the State agency employees who conducted the survey of his laboratory were biased in their review, and consequently made inferences that were not supported by evidence in the record. But the issue of bias was given a full and fair hearing by the ALJ. Dr. Sakhuja raised the issue before the ALJ, and had an opportunity to cross-examine the surveyors in a lengthy in-person hearing. In her decision, the ALJ considered the evidence supporting the survey findings, and necessarily assessed the credibility of the surveyors. As we have found in other cases, whether or not a surveyor was biased against a particular facility would make little difference in cases where objective evidence establishes the existence of a deficiency. See e.g., Vandalia Park, DAB No. 1940 (2004).

3. State Agency Survey Procedure

Dr. Sakhuja further asserts that the State agency had failed to follow its own procedures to inform the laboratory during an exit interview of the review findings, and, thus, had failed to provide the laboratory an opportunity to respond immediately and resolve deficiencies.

The record indicates that Dr. Sakhuja had clear notice of the survey findings and that he failed to take advantage of any opportunity to respond and resolve deficiencies. The State agency gave Dr. Sakhuja 18 days advance notice of the documents it would ask to review during the survey, and yet those documents were not made available to the surveyors, or were insufficient to document compliance. It is clear that Dr. Sakhuja knew that he was not fully responding to the surveyors' requests for patient records at the time of the initial survey. Furthermore, the surveyors testified that they again requested documentation during a meeting on October 26, 2001 (when the surveyors first attempted to complete the survey). Transcript (Tr.) at 147-148. Moreover, the November 7, 2001 letter informing Dr. Sakhuja of the CMS action provided an opportunity to submit allegations of compliance, which would have triggered a revisit survey. CMS Ex. 1. The record contains no indication that Dr. Sakhuja either made any such allegations, or proposed an adequate plan of correction, in a timely manner. ALJ Decision at 2. In sum, Dr. Sakhuja had clear notice of the findings, and an opportunity to respond, in addition to the opportunity for a hearing before an ALJ. Thus, we conclude that CMS and the State agency afforded Dr. Sakhuja the process required by federal law. 42 C.F.R. �� 493.1840 and 493.1842.

Even assuming it were true that the State agency had not followed its own internal procedures for an exit conference, this failure would not be a ground for reversal because the State procedures that were followed in this case complied with all federal notice and due process requirements. The remedies imposed by CMS are based on the finding of noncompliance, and State procedural irregularities that do not affect the finding of noncompliance do not impugn the basis for the remedy. See Beechwood Sanitarium, DAB No. 1906 (2004). Therefore, we conclude that the State agency procedures are not a basis for finding an error of law in the ALJ Decision. We further conclude that the State procedures do not undercut the substantial evidence supporting that decision in the record as a whole.

4. Plan of Correction

Dr. Sakhuja asserts that ALJ erred in affirming CMS's finding that his plan of correction was unacceptable. Dr. Sakhuja bases this assertion in part on the contention that the plan of correction was rejected simply because it was not "artful" and proposed corrections that were "general in nature." Dr. Sakhuja also contends that CMS and the ALJ should have given him "an opportunity to prepare and apply a procedure as laid down by regulations." Review Request at 8.

The record does not support Dr. Sakhuja's contention that the plan of correction was rejected because of concerns about its form, nor does it support his contention that he was not given an adequate opportunity to develop an acceptable plan of correction. Instead, the record indicates that Dr. Sakhuja must bear responsibility for his own failure to develop an acceptable plan of correction. Dr. Sakhuja was notified of the noncompliance on November 7, 2001 and did not submit an initial proposed plan of correction until December 28, 2001. The record contains no indication that he sought technical assistance from the State agency, CMS or outside experts to prepare this proposed plan of correction. Upon determining that the proposed plan of correction was not acceptable, CMS provided for a delay in the revocation of his CLIA certificate, until January 23, 2002, if he hired a consultant to assist him in preparing a plan of correction. The revised plan, however, contemplated further delays before Dr. Sakhuja would deliver documentation to the State agency to determine if he was in compliance (until February 13, 2002). CMS presented testimony explaining that the basis for rejecting the proposed plan of correction was both this delayed time schedule and the lack of specific procedures that would ensure compliance. Tr. at 44-45. We therefore conclude that there is no basis for reversal of the ALJ Decision based on Dr. Sakhuja's arguments related to the proposed plan of correction.

5. Factual Errors

In addition to these assertions of error by the ALJ, Dr. Sakhuja reiterates explanations for the State agency findings which he had previously offered to the ALJ. These explanations, however, do not deny or negate the underlying findings of noncompliance. Indeed, in these explanations, Dr. Sakhuja implicitly concedes that his laboratory was not in substantial compliance. Review Request at 9-10. Furthermore, these explanations were presented to the ALJ and fully considered in the proceedings before the ALJ.

For example, Dr. Sakhuja explains that patient records were unavailable to State surveyors because he was in the process of converting those records to electronic form and did not have sufficient time during the inspection to locate requested records. Review Request at 9. But he does not deny the underlying facts that he was unable to produce those records for the surveyors and thus failed to comply with recordkeeping requirements. ALJ Decision at 8-12. He also explains that he had been unaware that laboratories to which he referred samples did not have the appropriate licensure status. Review Request at 9. Implicit in this explanation, however, is the admission that the referral laboratories did not have appropriate licensure status. ALJ Decision at 13. He also asserts that findings related to uncollected waste were related to the relocation to new offices and disarray in the waste collection company. Review Request at 10. He does not deny, however, that there were used, uncapped syringes on the floor and an overflowing medical waste container. ALJ Decision at 15. These explanations do not provide a basis to reverse the ALJ Decision, because they do not indicate that the ALJ Decision was unsupported by substantial evidence in the record as a whole.

Conclusion

For the reasons set forth above, we affirm the ALJ Decision and adopt all the FFCLs made by the ALJ.

Judith A. Ballard

Donald F. Garrett

Daniel Aibel
Presiding Board Member

1. The CLIA regulations were recently amended. 68 Fed. Reg. 3640 (Jan. 24, 2003). We apply the regulations as in effect during the relevant time period.

2. For example, a laboratory performing only very simple tests may operate under a certificate of waiver if it meets the requirements of subpart B of Part 493. 42 C.F.R. � 493.15. A laboratory performing tests of higher complexity must have a certificate of compliance or accreditation, and meet additional requirements, including those set out in subparts F, H, J, K, M, P, and Q of Part 493. 42 C.F.R. �� 493.5, 493.20.