SUBJECT: White Lake Family Medicine, P.C.,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

White Lake Family Medicine, P.C. (White Lake), appealed a November 14, 2003 decision by Administrative Law Judge (ALJ) Richard J. Smith. White Lake Family Medicine, P.C., DAB CR1109 (2003) (ALJ Decision). The ALJ granted summary judgment for the Centers for Medicare & Medicaid Services (CMS), concluding that CMS had properly imposed the remedies of 1) cancellation of White Lake's approval to receive Medicare payments for its services; and 2) suspension and revocation of White Lake's certificate under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). White Lake argued that it was entitled to a hearing, taking exception to each of the ALJ's findings and conclusions.

For the reasons explained below, we determine that summary judgment is appropriate here since there is no genuine dispute of material fact. The undisputed facts establish that White Lake failed to meet the CLIA conditions for participating in a proficiency testing (PT) program and for having a laboratory director who fulfills specified duties. Among other things, the undisputed facts establish that, for 47 PT samples in two testing events, White Lake recorded testing results in its logs, but then reported to the PT organization different results (identical to those of another laboratory). Therefore, White Lake's PT program did not function as intended - to test White Lake's proficiency. White Lake's proffer of evidence, even when viewed in the light most favorable to White Lake, is not sufficient to cause a rational trier of fact to find in White Lake's favor. White Lake's arguments, and consequently its proffer, were based on erroneous interpretations of the CLIA regulations. Even if those interpretations were correct and White Lake proved the facts it seeks to establish, however, this would not suffice to show compliance with the two CLIA conditions at issue, in light of the facts that White Lake did not dispute.

Applicable law and regulations

CLIA authorizes the Secretary to establish and enforce requirements for all laboratories that perform clinical diagnostic tests on human specimens and provides for federal certification of such laboratories. Public Law No. 100-578, amending � 353 of the Public Health Service Act, codified at 42 U.S.C. � 263a et seq. The Secretary's enforcement authority includes 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. 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, 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 performing only simple laboratory examinations and procedures may operate under a certificate of waiver if it meets the requirements of subpart B of Part 493. 42 C.F.R. � 493.15. Generally, a laboratory that is performing tests of high and/or moderate complexity must have a certificate, such as a certificate of compliance, and must meet applicable conditions of certification set out in subparts F, H, J, K, M, P, and Q of part 493. 42 C.F.R. �� 493.5, 493.20. Each condition is stated generally and then broken up into more detailed standards that a laboratory must meet as part of achieving compliance with the condition.

Each laboratory holding a CLIA certificate to do tests of moderate and/or high complexity must participate in a proficiency testing (PT) program that is approved by CMS, as outlined in subpart H. Among the requirements of that subpart are that each laboratory must enroll in an approved PT program that meets specific criteria set out at subpart I. 42 C.F.R. � 493.801. The laboratory "must successfully participate" in an approved PT program for each "specialty, subspecialty, and analyte or test in which it is certified under CLIA." 42 C.F.R. � 493.803(a). To be approved, a PT program must assure the quality of test samples it distributes to laboratories, appropriately evaluate and score the test results, identify performance problems in a timely manner, and maintain records of laboratories' performance. 42 C.F.R. �� 493.901, 493.902.

The legislative history of CLIA indicates that Congress considered an effective PT program to be an important way of ensuring accuracy of laboratory tests, but was concerned about ways that laboratories had devised to undercut such programs. The House Report on CLIA states:

The Committee was advised that some laboratories may treat proficiency test samples differently, knowing the laboratory is being judged on its performance. It was alleged, for example, that some laboratories might run repeated tests on the sample, use more highly qualified personnel than are routinely used for testing or send the sample out to another laboratory. Such practices obviously undermine the purpose of proficiency testing and the Committee seeks to prevent them through this agreement.

H.R. 899, 100^th Cong. 2d Sess., 24; see also id. at 16. The statute addressed this in part by providing:

Any laboratory that the Secretary determines intentionally refers its proficiency testing samples to another laboratory for analysis shall have its certificate revoked for at least one year.

42 U.S.C. � 263a(i)(4). The implementing regulation states:

The laboratory must not send PT samples or portions of samples to another laboratory for any analysis which it is certified to perform in its own laboratory. Any laboratory that CMS determines intentionally referred its proficiency testing samples to another laboratory will have its certification revoked for at least one year. Any laboratory that receives proficiency testing samples from another laboratory for testing must notify CMS of the receipt of those samples.

42 C.F.R. � 493.801(b)(4); see also 42 C.F.R. � 493.1840(b). ⁽²⁾

The prohibition on intentional referral was not the only means for ensuring meaningful PT programs, however. CLIA also provided that a laboratory must treat PT samples "in the same manner as it treats materials derived from the human body referred to it for laboratory examination or other procedures in the ordinary course of business." 42 U.S.C. � 263a(d)(1)(E). Section 493.801(b) of the regulations, which implements this requirement, provides in relevant part:

(1) The [PT] samples must be examined or tested with the laboratory's regular patient workload by personnel who routinely perform the testing in the laboratory using the laboratory's routine methods. The individual testing or examining the samples and the laboratory director must attest to the routine integration of the samples into the patient workload using the laboratory's routine methods.

* * *

(2) Laboratories that perform tests on [PT] samples must not engage in any inter-laboratory communications pertaining to the results of [PT] sample(s) until after the date by which the laboratory must report [PT] results to the program for the testing event in which the samples were sent. . . .

* * *

(5) The laboratory must document the handling, preparation, processing, examination, and each step in the testing and reporting of results for all [PT] samples. The laboratory must maintain a copy of all records, including a copy of the [PT] program report forms used by the laboratory to record [PT] results including the attestation statement provided by the PT program, signed by the analyst and the laboratory director, documenting that [PT] samples were tested in the same manner as patient specimens . . . .

In addition to having a PT program, each laboratory performing moderate or high complexity testing must have a director who is qualified and who provides overall management and direction, in accordance with the regulations. 42 C.F.R. �� 493.1403, 493.1441. Under the regulations, the "laboratory director is responsible for the overall operation and administration of the laboratory, including the employment of personnel who are competent" and "for assuring compliance with the applicable regulations." 42 C.F.R. �� 493.1407, 493.1445. The laboratory director may perform some personnel duties or delegate them to qualified persons (such as a "technical supervisor" for high complexity tests), but remains responsible for ensuring that all duties are properly performed. 42 C.F.R. �� 493.1407(a) and (b), 493.1445(a) and (b). Among other things, the laboratory director must "ensure" that PT samples are tested as required, that "the results are returned" within the timeframes established by the PT program, that PT "reports received are reviewed by the appropriate staff to evaluate the laboratory's performance and to identify any problems that require corrective action", and that an "approved corrective action plan is followed" when any PT results are found to be unacceptable or unsatisfactory. 42 C.F.R. �� 493.1407(d)(3), 493.1445(e)(3).

Failure by a laboratory to comply with even a single condition in an area of testing offered by that laboratory may be grounds for suspension or revocation of a laboratory's CLIA certificate. Ward General Practice Clinic, DAB No. 1624, at 2 (1997). CMS may suspend, limit, or revoke the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions, and may also impose alternative sanctions such as a directed plan of correction or monitoring by the state. 42 C.F.R. � 493.1806.

A laboratory is entitled to a hearing before an ALJ to contest the imposition of CLIA remedies, including the suspension, limitation, or revocation of the laboratory's CLIA certificate, and may request review of the ALJ's decision by the Departmental Appeals Board. 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.

Case Background and Undisputed Facts

White Lake is a physician office laboratory (POL) located in White Lake, Michigan. White Lake's laboratory director is David Leszkowitz, D.O. During the first half of 2000, White Lake performed routine chemistry and endocrinology testing and participated in proficiency testing (PT) conducted by the American Association of Bioanalysts (AAB). In 2001, the AAB reported to the Michigan Department of Consumer and Industry Services (MDCIS) that, in March and June 2000, White Lake had submitted PT results in various areas of testing that were nearly identical to those submitted by another Detroit area POL operated by Tisa K. Gabriel, D.O. (TKG). CMS Ex. 1. The PT submissions for both White Lake and TKG were signed by the same analyst, Nicholas M. Dippold. CMS Exs. 4, 5.

On March 20, 2001, an MDCIS surveyor conducted an onsite inspection at White Lake. CMS Ex. 7. The surveyor examined laboratory logs maintained by White Lake for March 10 and June 12, 2000, the dates on which Mr. Dippold attested he performed the PT. The results reported in the logs did not match the PT results White Lake reported to AAB. The surveyor concluded that White Lake was out of compliance with two CLIA conditions, relating to proficiency testing and responsibilities of a laboratory director. CMS Ex. 10. Regarding the former, the surveyor cited the discrepancies between the PT results White Lake recorded in its log books and the numbers sent to AAB, and further cited the identical PT results both White Lake and TKG submitted to AAB. Id. at 2-6. As to the latter deficiency, the surveyor found no evidence that White Lake's laboratory director had ever reviewed the PT results or instituted procedures for monitoring the competence of testing personnel. Id. at 8-9.

By letter dated September 12, 2001, CMS informed White Lake that, based on the survey and other evidence, CMS had determined to cancel White Lake's approval to receive Medicare payments for its services and to revoke its CLIA certificate for at least one year. CMS Ex. 19.

During oral argument, the Board sought, to clarify what, if any, of the facts found by CMS were disputed by White Lake. White Lake agreed that the following facts were undisputed:

1. None of the 25 values that were obtained in White Lake's laboratory for the PT samples for March 2000 were the same as the values that were reported to AAB by White Lake as its results for the March testing event.

2. Of the values that were obtained in White Lake's laboratory for the PT samples for June 2000, only 3 of the 25 values were the same as the values reported to AAB by White Lake as its results for the June testing event.

3. The PT values that were reported by White Lake for 25 samples in March 2000 were identical to the values reported by the Tina K. Gabriel laboratory for those 25 samples.

4. The PT values that were reported by White Lake for 22 out of 25 samples in June 2000 were identical to the values reported by the Tina K. Gabriel laboratory for those 22 samples.

5. Nicholas Dippold, who signed as the analyst who did the PT testing for White Lake for March and June 2000, also signed as the analyst for the PT testing for the Tina K. Gabriel laboratory for those testing events.

6. Nicholas Dippold worked part-time for White Lake and also worked for the Tina K. Gabriel laboratory.

7. White Lake's laboratory director did not sign the attestation statements on the AAB forms for PT testing for March and June 2000.

8. Nicholas Dippold signed the attestation statement from March 2000 both as analyst and as "technical supervisor."

9. Nicholas Dippold's credentials and proof of education consisted of a certificate of admission as an associate member to the American Society of Clinical Pathologists and an associate degree in applied science.

10. Nicholas Dippold did not qualify as a "technical supervisor" under the CLIA regulations.

11. The documents submitted by CMS as Exhibits 2 and 3 show the acceptable ranges that AAB determined for the testing events in March and June of 2000, respectively.

12. The values for the cholesterol testing reported by White Lake for the March 2000 testing event were not within a satisfactory range.

13. White Lake did not produce any documentation during the investigation that it took corrective action steps in response to the unsatisfactory results for cholesterol in the March 2000 testing event.

14. Prior to the investigation, the laboratory director had not established policies and procedures for monitoring the competency of personnel performing tests.

See Tr. at 23-29. White Lake also asserted, and CMS did not deny, that, except for a period of time in 2000, White Lake was doing only waived tests under a certificate of waiver and that White Lake had surrendered its certificate to do more complex testing prior to the investigation in March 2001. Tr. at 31, 34.

The ALJ Decision

The ALJ Decision was based on the following four numbered findings of fact and conclusions of law (FFCL).

1. Summary judgment is appropriate where, as here, Petitioner has not demonstrated any dispute over genuine issues of material fact.

2. The identical PT results submitted by Petitioner and TKG, along with the discrepancies between the PT results put forth in Petitioner's internal logs and the results sent to AAB, establish that Petitioner engaged in improper referral and collaboration of the PT samples.

3. Petitioner failed to comply with the regulatory requirements for a laboratory director.

4. I have no authority to address other arguments raised by Petitioner.

Relying on past ALJ and Board decisions, the ALJ treated the evidence of the identical results between the two laboratories as powerful circumstantial proof that improper communications between the two laboratories had occurred. In reaching this conclusion, he noted that, in Emil S. Sitto, M.D., DAB CR935 (2002), another ALJ had recognized, based on expert testimony, that "the likelihood of two laboratories arriving at the same value for a proficiency test result is very low because of the variable involved in the testing processes. . . ." ALJ Decision at 7. In these circumstances, he said, "it is not necessary for CMS to produce direct proof that the samples were actually carried, sent, or communicated to another laboratory." Id. He concluded that CMS's evidence of the identical results reported by the two laboratories was legally sufficient to establish a prima facie case of noncompliance and that White Lake had "presented no evidence" to meet its burden of rebutting that prima facie case by a preponderance of the evidence. The ALJ further concluded that the evidence from White Lake's own log books, revealing discrepancies between the results achieved on-site and the results reported to AAB for all but three out of 50 sampling results, was even more damning. Id. at 8-9. He noted that White Lake had "offered no explanation why it reported results to AAB that were different from the PT records in its own logs" and concluded that the discrepancies were legally sufficient to establish prohibited "referral" and "communications" in violation of CLIA regulations. Id.

In concluding that White Lake also failed to comply with the laboratory director condition, the ALJ rejected a number of arguments raised by White Lake, including the argument that a laboratory director's responsibilities for PT testing were not clear since AAB's PT reporting forms called for either the laboratory director or a technical supervisor to sign the attestation statement.

In determining that summary judgment was appropriate, the ALJ noted that CMS was here relying only on the "raw data on which it based its conclusions," rather than on affidavits. ALJ Decision at 6. He further stated that White Lake had "offered no declarations or affidavits by its staff disputing the accuracy of the documents offered by CMS as exhibits" and that "[i]n fact Petitioner has offered no evidence or documents at all in support of its position." Id.

In its request for review by the Board, White Lake objected to each of the ALJ's numbered FFCLs. White Lake also requested an opportunity for oral argument. The Board granted this request and heard oral argument on May 24, 2004. ⁽³⁾ The record before us consists of the parties' briefs and exhibits before the ALJ, their briefs on appeal, and the transcript of the oral argument.

Standard of review

Whether summary judgment is appropriate is a legal issue that we address de novo. Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004).

1. Summary judgment does not contravene the right to a hearing.

As a threshold matter, White Lake argued that the ALJ erred in finding against it without the benefit of an evidentiary hearing. Citing the CLIA hearing provisions at 42 U.S.C. � 263a(i)(1) and 42 C.F.R. � 493.1844(a), White Lake asserted that the right to an in-person hearing is essential to the appeal to an Administrative Law Judge.

The issues of whether and when an ALJ may resolve a case under subpart D of Part 498 by summary judgment without holding an in-person hearing have been the subject of much recent litigation before the Board and the courts. See, e.g., Madison Health Care, Inc., DAB No. 1927 (2004); Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004); Crestview Parke Care Center, DAB No. 1836 (2002), rev'd sub nom, Crestview Parke Care Center v. Thompson, 373 F.3d 743 (6th Cir. 2004). The right to a hearing in those matters derived from the Social Security Act (Act) and the hearing right in this case derives from CLIA. Section 1128A of the Act requires that an adversely affected person have an opportunity for a hearing "on the record." This term of art triggers the provisions of the Administrative Procedure Act that detail formal adjudicatory process including an oral evidentiary hearing before an ALJ. 5 U.S.C. �� 554(a), 556(d), 557. The applicable CLIA provision provides only for "reasonable notice and an opportunity for a hearing." 42 U.S.C. � 263a(i)(1). The implementing regulations in subpart D are the same, however, and generally contemplate that the ALJ will hold an oral hearing at which witnesses will testify and may be cross-examined (unless the parties have waived their right to a hearing in writing). Therefore, this Board does not lightly determine that no oral hearing need be provided.

Nevertheless, the Board and the courts have upheld procedures that allow alternative resolution of appeals without an oral hearing under certain circumstances. See, e.g., Crestview, 373 F.3d at 748-50 (upholding validity of summary judgment procedures in DAB Civil Remedies Division Procedures Manual). A requirement affording the opportunity for an oral hearing is not contravened by summary judgment if there is no genuine issue of material fact. Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997), citing Travers v. Shalala, 20 F.3d 993, 998 (9^th Cir. 1994). Thus, in reviewing a case where an ALJ did not either obtain a written waiver or hold an oral hearing, we may nonetheless uphold the decision if the affected party either had conceded all of the material facts or proffered testimonial evidence only on facts which, even if proved, clearly would not make any substantive difference in the result. Big Bend Hospital Corp., DAB No. 1814 (2002), aff'd, Big Bend Hospital Corp. v. Thompson, No. P-02-CA-030 (W.D. Tex. Jan. 2, 2003). As the Crestview court pointed out, "it would seem strange if disputes could not be decided without an oral hearing when there are not genuine issues of material fact" and "bizarre if administrative agencies, which are in many respects modeled after the federal courts and which indeed often have more informal proceedings than federal courts, could not follow a similar rule" to the federal summary judgement rule. 373 F.3d 743, at 750, citing Fed. R. Civ. P. 56.

Accordingly, we reject White Lake's argument that granting summary judgment would be inconsistent with its statutory and regulatory hearing rights.

2. In determining whether summary judgment is appropriate, we are guided by federal rules and case law applying those rules.

Since the Part 498 procedures do not specifically provide for summary judgment, neither do they set out rules for determining whether summary judgment is appropriately granted. Some ALJs have notified parties that they will apply Rule 56 of the Federal Rules of Civil Procedure (FRCP), but the pre-hearing order in this case did not give such notice. In similar cases, we have held that an ALJ may not hold parties to the Rule 56 procedures without such notice, but that the federal rule nonetheless provides helpful guidance on the standard to apply. Thelma Walley, DAB No. 1367 (1992). In analyzing whether summary judgment is appropriate, the Board therefore has set out a framework drawn from the federal rule and from the case law developed under it, as well as from an informed consideration of the nature and purpose of the administrative proceedings to which it is being adapted.

Summary judgment is generally appropriate when the record shows that there is no genuine issue as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986). The moving party must show that no genuine issues of material fact remain for trial, which it may do by showing that no evidence in the record supports a judgment for the non-moving party. Id. at 323, 325. The non-moving party must then "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). The non-moving party will not prevail by mere denials, but must furnish evidence of a dispute concerning a material fact. Id. at 586, n.11; Celotex, 477 U.S. at 322. Ultimately, summary judgment lies "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party . . . ." Matsushita, 475 U.S. at 587.

In the context of a summary judgment motion, all reasonable inferences supported by the evidence should be drawn in favor of the non-moving party. See, e.g., U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). The Sixth Circuit articulated the decisionmaker's role as follows:

In deciding a motion for summary judgment, the court must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party's favor. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The judge is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Sagan v. U.S., 342 F.3d 493, 497 (6^th Cir., 2003). Thus, the ALJ deciding a summary judgment motion does not "make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts," as would be proper when sitting as a fact-finder after a hearing, but instead should "constru[e] the record in the light most favorable to the nonmovant and avoid[] the temptation to decide which party's version of the facts is more likely true." Payne v. Pauley, 337 F.3d 767, 770 (7^th Cir., 2003). It follows that it cannot be said to be sufficient to support a grant of summary judgment that one "may" draw a conclusion favorable to the moving party based on the proffered evidence, if one might also reasonably reach inferences which would support a conclusion favoring the non-moving party. Nor is it appropriate to evaluate at this stage where the truth is most likely to lie or which party's evidence is more persuasive. The focus is rather on whether the non-moving party has so failed to meet the challenge of demonstrating that evidence exists on an element material to deciding the matter as to require an adverse judgment. ⁽⁴⁾

Finally, while the non-moving party is entitled for purposes of summary judgment to the benefit of any favorable factual finding or inference which a "rational trier of fact" could reach on the proffered evidence, that does not imply that the decision-maker must accept that party's thinking as to how the law should be applied to those facts. See, e.g., McCoy v. Harrison, 341 F.3d 600 (7^th Cir. 2003)(court is not required to credit mere speculation or conjecture by non-moving party). In other words, the decisionmaker need not resolve a purely legal dispute in favor of the non-moving party (as opposed to drawing favorable inferences from the proffered evidence). In that sense, a dispute between the parties as to the correct conclusion to draw from undisputed facts is not an impediment to the entry of summary judgment.

3. White Lake proffered testimonial evidence that we examine in the light most favorable to White Lake.

White Lake argued in its request for review that it should be afforded an opportunity to call witnesses, including the following:

• Nicholas Dippold
• Other representatives from Detroit Biomedical Laboratory
• Dr. Gabriel
• CMS surveyor Barbara Alspaugh
• AAB representatives (including Dennis W. Jay, Ph.D.)
• Representatives from the MDCIS (including Richard Benson and Robert P. Daly)
• Dr. Leszkowitz.
  

White Lake Br. at 12. White Lake also stated that it should have an opportunity to request subpoenas to obtain testimony and documents, including but not limited to testimony and documents from representatives of AAB, MDCIS, CMS and Detroit Medical Laboratory.

White Lake made essentially the same statements in response to the CMS motion for summary judgment. While White Lake did not provide any witness statements specifying what testimony it expected to present from these witnesses, White Lake did make assertions regarding what the laboratory director, Dr. Leszkowitz, did or did not do or know, to which he presumably would testify. White Lake asserted that Dr. Leszkovitz was not aware of Nicholas Dippold's work at the TKG laboratory and did not know Dr. Gabriel. Response to CMS's Motion for Summary Judgment at 8. White Lake also indicated that, when White Lake determined that some moderate or high complexity testing should be performed on-site, it relied on a large and established laboratory operation (Detroit Biomedical Laboratory) to set up the laboratory and that "Dr. Leszkovitz believed that Detroit Biomedical Laboratory would keep his laboratory in compliance with the myriad of federal and state clinical laboratory laws and regulations, and CLIA in particular." Id. at 7.

White Lake maintained that CMS's case was based on the actions and admissions of White Lake's analyst, Nicholas M. Dippold, as well as the untested written declarations of other individuals who had relied upon reports prepared by third parties. White Lake Br. at 12. According to White Lake, the purpose of a Board remand to the ALJ for a hearing would come down to "this issue of an intentional referral and being able to delve further, with possibly Nicholas Dippold and others, into this issue because there was no intentional referral in our view of samples or portions of samples, which really is the crux of this, that because of that there must be a revocation of this certificate of waiver." Tr. at 36. Another purpose, White Lake said, would be "to hear from Dr. Leszkowitz himself about what effect this has on his patients and trying to practice medicine." Id. The goal, White Lake said, however, "would be to direct the ALJ to compel CMS to resolve this in a way that doesn't result in a revocation of the certificate of waiver." Id.

CMS pointed out that White Lake had not submitted an affidavit by Dr. Leszkowitz. We have not required opponents of a summary judgment motion in Part 498 to submit proffered testimony in the form of an affidavit or signed declaration, as might be required if the procedures in FRCP Rule 56 applied or were made applicable. To show that there was a genuine dispute of material fact requiring a hearing, however, White Lake at a minimum needed to identify the nature of the testimony it would present at a hearing. Other than for Dr. Leszkovitz and Mr. Dippold, however, White Lake provided no description of the testimony it expected any particular listed witness to offer, even on appeal to the Board. ⁽⁵⁾

White Lake's descriptions of proffered testimony from Mr. Dippold and Dr. Leszkovitz were also relatively vague, and some of the asserted facts White Lake sought to prove were not directly disputed by CMS. ⁽⁶⁾ For purposes of summary judgment, however, we assume that the proffered testimony would show that--

• Mr. Dippold tested the PT samples at White Lake, using its routine methods.
• Mr. Dippold did not physically transport White Lake's PT samples (or portions of the samples) to the TKG laboratory.
• Mr. Dippold did not intentionally refer White Lake's PT samples to the TKG laboratory.
• Dr. Leszkovitz was not aware of Nicholas Dippold's work at the TKG laboratory and did not know Dr. Gabriel.
• Dr. Leszkovitz believed that Detroit Biomedical Laboratory would keep his laboratory in compliance with the myriad of federal and state clinical laboratory laws and regulations, and CLIA in particular.
• Loss of the certificate of waiver would hamper White Lake's practice of medicine and could result in harm to its patients.

Even assuming that these statements are true, however, this would not make a difference in the outcome of the case. ⁽⁷⁾ As we discuss below, with respect to each of the two CLIA conditions, the legal conclusions on which White Lake based its arguments about why it should get a hearing are erroneous, the undisputed facts are legally sufficient as a basis for revocation, and the facts White Lake seeks to prove are immaterial to the conclusion that it failed to comply with the condition. We also explain below why we conclude that this case is distinguishable from other cases on which White Lake relied, in which the Board or a court found that a hearing was required, and why we reject White Lake's arguments that revocation of its certificate of waiver was not the appropriate remedy.

4. Summary judgment in CMS's favor is appropriate with respect to the issue of whether White Lake was complying with the condition of participation at section 493.801.

a. CMS did not need to show that the referral was intentional, nor did it need to show physical transfer of the PT samples in order to revoke White Lake's certificate; under the regulations, failure to participate in a PT program in the manner anticipated by the regulations can be sufficiently serious to warrant revocation, even in the absence of such a showing.

White Lake asserted that CMS had offered no evidence supporting a finding of a physical transfer of PT samples from White Lake to any other laboratory. Such a finding, White Lake insisted, was necessary to prove a prohibited referral. White Lake argued that the ALJ had found that White Lake intentionally referred PT samples to another laboratory. According to White Lake, In order to have intentional referral, the samples must be taken to another laboratory for analysis. If the [statutory and regulatory] language does not have its plain meaning, then that portion of both the statute and regulation relating to the analysis of the samples becomes meaningless. One of the most often cited rules of statutory interpretation is that the words of a statute or regulation should not be rendered meaningless.

White Lake Br. at 21.

White Lake cited the ALJ decision in Southfield Medical Clinic, DAB CR667 (2000) for the proposition that there must be actual physical transfer of PT samples between laboratories in order to violate the referral prohibition at 42 C.F.R. � 493.801(b)(4). White Lake asserted that the ALJ's conclusion in Southfield comported with the applicable statutory and regulatory language. By contrast, White Lake contended, the ALJ Decision here -

determined that the language of the statute, regulations, and the conclusions in Southfield Medical Clinic are without meaning and determined that the actual physical conveyance of PT samples from one laboratory to another is not required to support a finding that an intentional referral of PT samples has occurred. As a basis for this conclusion, he cites the fact that in the two testing events involved in this case, all but 8 of 50 samples from two testing events were identical, which he concludes is evidence of collusion. This conclusion is obviously erroneous under the clear statutory and regulatory language, as well as the . . . earlier decision in Southfield Medical Clinic.

White Lake Br. at 21-22. ⁽⁸⁾

White Lake discounted the ALJ's reliance on an earlier ALJ Decision in RNA Laboratories, Inc. and Ter-Zakarian Medical Clinic, DAB CR829 (2001) ⁽⁹⁾ to support his conclusion that improper communication can occur without the physical conveyance of PT samples as "clearly erroneous as the ALJ's Decision does not address the fact that . . . [White Lake's] laboratory logs demonstrate that the proficiency tests were actually performed at . . . [White Lake's] lab." White Lake Br. at 23. Finally, White Lake noted that in rejecting the rationale of Southfield, the ALJ had relied upon the Board's decision in Oakland Medical Group, DAB No. 1755 (2000). White Lake argued that the ALJ erred by relying on Oakland since "the existence of inconsistent ALJ opinions on this topic demonstrates that this is an unsettled issue and, under the circumstances, the ALJ could have rejected the findings" in Oakland. White Lake Br. at 23. ⁽¹⁰⁾

White Lake argued that, "even assuming all CMS has alleged did, in fact, occur, . . . this behavior would constitute, at most, inter-laboratory communications and not an intentional referral." Tr. at 7. According to White Lake, revocation is not the appropriate sanction for a finding of inter-laboratory communications. Rather, White Lake contended, Congress envisioned that inter-laboratory communications be subject to a flexible intermediate sanction and should be treated only as standard level deficiencies, not resulting in mandatory revocations of CLIA certificates. White Lake Br. at 17-20.

Moreover, White Lake argued, the ALJ's conclusion that collaboration could rise to the level of intentional referral under 42 C.F.R. � 493.801(b)(4) is clearly erroneous based on the statutory and regulatory language. White Lake Br. at 21.

These arguments are not persuasive.

First, White Lake's argument to the effect that CMS may properly revoke White Lake's certificate only if it establishes intentional referral has no merit. The statute and regulations set out above require revocation for at least a year if intentional referral occurred and provide for alternative remedies (also called intermediate sanctions), where circumstances do not warrant revocation. Nothing in the statute or regulations precludes revocation on grounds other than intentional referral, however. Instead, the regulations provide generally that CMS may revoke a certificate if it finds a condition level deficiency and define a condition level deficiency as "noncompliance with one or more condition level requirements," that is, any of the requirements identified as conditions in subparts G through Q of Part 493. 42 C.F.R. � 493.2. Here, while CMS's determination cited the provision mandating revocation of at least a year for intentional referral, CMS's findings were framed as "improper referral or collaboration" and, more generally, as failure to meet the conditions for participation in a PT program and for a laboratory director. CMS Ex. 12.

Second, the regulations as a whole clearly contemplate that, to be in compliance, the laboratory must report as its PT results the values it obtains by testing the PT specimens according to the routine methods it uses for patient specimens. ⁽¹¹⁾ The requirement for integrating PT samples into the laboratory's routine workload is to ensure that the reported results truly measure the proficiency of the reporting laboratory in conducting the tests using its routine methods, so that corrective action can be taken, if needed. The lead-in language to section 493.801 states only that the samples must be "examined or tested" with the laboratory's regular patient workload. The more specific standard at subsection (b), however, requires the laboratory director to attest to the "routine integration of the samples into the patient workload" and the laboratory to "document the handling, preparation, processing, examination, and each step in the testing and reporting of results for all proficiency testing samples," maintaining "a copy of all records, including a copy of the [PT] program report forms used by the laboratory to record [PT] testing results including the attestation statement provided by the PT program . . . documenting that [PT] testing samples were tested in the same manner as patient specimens . . . ." 42 C.F.R. � 493.801(b)(emphasis added.) This wording reflects an expectation that the laboratory will document and attest that the results reported to the PT program on the program's form were the results obtained by integrating the PT samples into the regular patient workload. White Lake could not reasonably think that it could comply merely by conducting the PT tests using the routine methods it uses for patient specimens, even though it then reported to AAB results different from those obtained using those methods. Thus, the undisputed fact that the PT results White Lake reported to AAB for 47 PT samples were not the PT results its own logs represented as being obtained by testing the samples at White Lake, with patient specimens, is legally sufficient as a basis for determining that White Lake did not meet the condition at section 493.801. ⁽¹²⁾

Third, while it is not necessary to our decision, we also conclude that the ALJ was correct that CMS did not need to show physical transfer of PT samples from one laboratory to another in order to show that the requirements for PT testing were not met. Contrary to what White Lake argued, inconsistent ALJ decisions do not evidence that a legal issue is unsettled. One purpose for providing for this Board's review of ALJ decisions is to resolve any such inconsistencies in order to provide one answer on disputed legal issues on behalf of the Secretary.

In Oakland and other cases, the Board held that, if a laboratory uses results from another laboratory as if they were its own PT results, the laboratory could not reasonably think that its PT program complied merely because the PT samples were not physically transferred to the other. As the Board stated in Oakland:

When the regulations are considered as a whole, reading section 493.801(b)(4) to encompass a constructive referral such as what occurred here is a better reading. Limiting the concept of a referral to a physical transfer is inconsistent with the underlying purposes of the condition for certification. Adopting the values achieved in another laboratory (either with or without having done the tests in one's own laboratory) clearly undercuts the general concept that the PT sample be tested in the same way as regular patient specimens in the laboratory are tested so that the results truly measure the proficiency of the laboratory reporting the PT results. . . .

Oakland at 18.

The Board rejected the analysis by the ALJ in Southfield, which (like White Lake) relied on use of the word "send" in one sentence of section 493.801(b)(4). The Board pointed out that while "sending" PT samples to another laboratory is prohibited, that does not necessarily mean that sending is the only form of "intentional referral" that is prohibited. Relying on the dictionary definition of "refer" ("to direct the attention or thoughts of," and "to direct to a person, place, etc., for information or anything required"), the Board concluded that CMS could reasonably determine that the prohibition on intentional referral encompasses constructive referral, as well as actual physical transfer, particularly in circumstances where the facts render physical transfer unnecessary (for example, when the PT program sends identical PT samples to all participating laboratories certified to do a particular test). Id. at 17.

The Board also rejected an argument similar to the one White Lake made here - that section 493.801(b)(3) prohibits inter-laboratory communications, so communications about results could not constitute intentional referral. If the communications were intentional and led to circumstances with one laboratory not only knowing what another laboratory's results were, but also willfully reporting those results as its own, CMS could reasonably determine that intentional referral had occurred. The effect is substantially the same as if the PT samples had actually been sent to the second laboratory in order to obtain the results.

Finally, the clear purpose of prohibiting inter-laboratory communications is to avoid collusion between laboratories on what results to report. Where the analyst who conducts the test for one laboratory also conducts the test for another laboratory, the "communication" of PT results occurs within the brain of one individual, but the effect is the same as if two individuals from two different laboratories communicated about results. While the regulation does not expressly address this situation, no laboratory could reasonably think that it could circumvent the CLIA requirements by having the same analyst test the PT samples in more than one laboratory and then arguing that this did not constitute "communication." Indeed, White Lake did not specifically argue here that prohibited inter-laboratory communications did not occur.

In sum, the condition of certification at section 493.801, read as a whole, clearly contemplates that the results reported to the PT program will be the results obtained by testing the PT samples in the same way as patient specimens, so that the results reported in fact reflect the proficiency of the reporting laboratory. Neither physical transfer nor intentional referral is a prerequisite to a determination that the condition was not met, and such a determination is a sufficient basis for revoking a CLIA certificate.

b. The undisputed facts are sufficient as a basis for establishing a prima facie case that White Lake failed to meet the condition at section 493.801.

White Lake argued that in order to establish a prima facie case, CMS must present sufficient evidence to allow an inference "in favor of the asserted allegation" and that such evidence was missing here. White Lake maintained that an allegation of similar PT scores emanating from both White Lake and TKG was the only evidence CMS offered to prove its case and that CMS had based its determination upon unscientific conclusions, without support in the record. White Lake dismissed CMS's concerns about the scores, reasoning that since numerous laboratories had the same samples, reagents and equipment, similar scores should be expected. White Lake Br. at 15-17.

CMS was asked during oral argument to clarify whether it, like the ALJ, was relying on the expert testimony in Emil S. Sitto, DAB CR935 (2002) regarding the likelihood of two laboratories arriving at the same value for a proficiency test result. See ALJ Decision, at 7. ⁽¹³⁾ CMS responded that it was not relying on the testimony in the earlier case, explaining:

What's really striking about this case is that it's not necessary to wonder whether it would be possible for two labs who happen to have the same testing personnel to randomly report the same results given the range of correct results. There are two reasons it's unnecessary. One . . . we know that the results that White Lake reported weren't the ones in its log, so we know that it didn't report its own results. Second . . . , White Lake reported five inaccurate results, and . . . it's a matter for judicial notice that there are an infinite number of wrong answers, as opposed to a large, but finite number of right answers, and coincidence isn't going to get you five out of five identical wrong answers out of the infinite possibilities.

Tr. at 37.

We reject White Lake's arguments as unfounded. The conclusion that the ALJ drew regarding referral of PT samples and communication between the two laboratories was not based solely on an allegation of "similar" PT scores from both White Lake and TKG. Instead, it was based on the following undisputed facts: the PT scores White Lake reported for all 25 PT samples for March 2000 and for 22 out of 25 samples in June 2000 did not match the results in its own logs; the PT scores reported were identical to the results reported by TKG; Nicholas Dippold worked for both laboratories; and Nicholas Dippold was the only one who signed the attestation forms. Improper referral or communication is a reasonable inference from these undisputed facts. While the reporting of five identical inaccurate results may strengthen an inference of improper referral, the inference is a reasonable one, even without taking judicial notice that there are an infinite number of inaccurate answers, as CMS suggested.

More important, the undisputed facts showing that, for 47 PT samples in two testing events, White Lake reported results different from what was recorded in its logs are enough by themselves to show that White Lake failed to meet the condition for participating in a PT testing program, for reasons we have explained above.

Thus, we reject White Lake's argument that CMS failed to make a prima facie case.

c. The asserted facts on which White Lake relied are not material to the conclusion that White Lake was not in compliance with the condition at section 493.801.

The only proffered evidence that White Lake described that might potentially undercut the conclusion that White Lake failed to comply with the condition for PT testing is the testimony of Nicholas Dippold. As indicated above, we assume, for purposes of summary judgment, that his testimony would show that there was no intentional referral, that he did not transport White Lake's PT samples to the TKG laboratory, and that he tested White Lake's PT samples with patient specimens. These assumed facts, however, are not legally sufficient to show compliance with the CLIA condition for a PT program, in the face of the undisputed facts.

As explained above, CMS need not show actual physical transport of PT samples in order to show referral. Moreover, even if Mr. Dippold tested the PT samples at White Lake using its routine methods and then inadvertently reported TKG's results as White Lake's results for 47 different PT samples during two testing events, this would at most establish that the "referral" was unintentional. It would not establish compliance with the PT requirements.

As the ALJ pointed out, the problem here could have been avoided had the laboratory director (or someone else acting on his behalf) simply compared White Lake's logs to the results on the report form. White Lake cannot evade its responsibility for its noncompliance, whether the noncompliance somehow resulted from Mr. Dippold's inadvertent mistakes or was a result of his lies and fraudulent behavior, as White Lake first alleged. At the very least, multiple mistakes in reporting PT results as they were obtained at White Lake for two different testing events would evidence a serious failure of the PT program to function as intended.

In sum, the proffered testimony, even viewed in the light most favorable to White Lake, does not show that there is a genuine dispute of material fact regarding White Lake's compliance with the condition for a PT program at section 493.801.

5. Summary judgment in favor of CMS is appropriate on the issue of whether White Lake met the condition for laboratory director.

a. White Lake's arguments are based on erroneous legal conclusions.

White Lake argued that the ALJ's conclusions that White Lake's "laboratory director did not properly supervise . . . and was indifferent about . . . [White Lake's] PT responsibilities, are . . clearly erroneous." ⁽¹⁴⁾ According to White Lake, the ALJ relied solely on "the inference that because there are standard level deficiencies, the laboratory director did not perform his responsibilities." Most importantly, White Lake said, the "ALJ and CMS have never alleged or presented any evidence or made any finding of fact or conclusion of law related to patient testing not being properly performed at . . . [White Lake's] clinical laboratory." White Lake Br. at 24.

White Lake interpreted the ALJ Decision as standing for the "absurd proposition" that a "laboratory director needs to stand next to the laboratory technician and supervise all aspects of his or her work in order to meet the regulatory requirements. . . ." Id. at 25. White Lake contended that even if a laboratory director engaged in a more proactive oversight of technicians, this would not necessarily prevent collusion and that the director needed to rely on the expert - the laboratory technician. White Lake noted that there is no evidence of harm to the community of patients which it serves, nor any allegation that its laboratory work is not of the highest quality. Id. at 25-26. White Lake also argued that the ALJ erred in relying on the fact that Dr. Leszkovitz's signature is not on the PT reporting forms to support his conclusion that Dr. Leszkovitz failed to supervise Nicholas Dippold and failed in his responsibility as laboratory director, in light of the fact that the AAB form permits signing by a technical supervisor. Id. at 26; see, e.g., CMS Ex. 4, at 6.

These arguments have no merit. First, the ALJ properly rejected White Lake's arguments that the AAB form led to confusion over the laboratory director's attestation responsibilities because it would permit either a laboratory director or a technical supervisor to sign. Even assuming that this represents an official agency interpretation that a laboratory director may delegate his attestation duty to a technical supervisor (which it does not), it is undisputed that Nicholas Dippold did not qualify as a technical supervisor under the regulations (nor did White Lake offer evidence that Dr. Leszkovitz had in fact delegated his responsibilities to Nicholas Dippold). ⁽¹⁵⁾ Moreover, section 493.801 states that the analyst and the laboratory director must sign the attestation statement. Having one person sign in both capacities would undercut the intent of ensuring that the requirements are met. Indeed, the AAB form on which White Lake relied contemplates signatures by two different persons. CMS Ex. 4, at 6.

Contrary to what White Lake argued, moreover, CMS was not taking the position that a laboratory director needs to stand next to the laboratory technician and supervise all aspects of his or her work in order to meet the condition. Clearly, however, a laboratory director has to provide some oversight in order to fulfill the duties clearly set out in the regulations. The example that White Lake gave of how collusion could occur even after a laboratory director had overseen each step of PT testing and reporting of results is inapposite. Had Dr. Leszkovitz taken the minimal step here of comparing the PT results on the AAB report forms to the PT results on White Lake's own logs, he could have prevented White Lake from reporting results that were not what White Lake had recorded in its logs. That Dr. Leszkovitz might not have been able to prevent Nicholas Dippold from using White Lake's results when he reported results for TKG is irrelevant.

The conclusion that the laboratory director condition was not met is fully supported by the undisputed facts that Dr. Leszkovitz did not sign the attestation statement confirming that the results reported to AAB were obtained by testing the PT samples in the same manner as patient specimens; Nicholas Dippold was not qualified as a person to whom the authority to sign the attestation could be delegated; even though some of the results of the PT testing reported by White Lake were unsatisfactory results, Dr. Leszkovitz took no corrective action; and White Lake had no policies or procedures to ensure competency of personnel. Under the regulations set out above, the laboratory director clearly has the responsibility to ensure that a laboratory director's duties are fulfilled, including the duty to ensure that PT testing meets requirements, that corrective action is taken when a PT program reports unsatisfactory results, and that testing personnel are competent.

The absence of a specific finding that testing was being improperly performed at White Lake is not significant. Nothing in the regulations requires such a finding. While such a finding would support the determination that White Lake's deficiencies were at the condition level, the failures here are sufficiently serious to support that determination without such a finding.

b. White Lake did not show that there is a genuine dispute of material fact regarding its compliance with the condition for laboratory director.

The testimony that White Lake proffered from Dr. Leszkovitz, even when viewed in the light most favorable to White Lake, would not make a difference here.

As indicated above, we assume for purposes of summary judgment that Dr. Leszkovitz was not aware of Nicholas Dippold's work at the TKG laboratory and did not know Dr. Gabriel. CMS argued that this alleged ignorance, if true, would tend to support a conclusion that Dr. Leszkovitz was not fulfilling his responsibilities, rather than to undercut it, and the ALJ stated that Dr. Leszkovitz's purported lack of knowledge "provides no excuse when confronted by the explicitness of the regulations." ALJ Decision at 11. In any event, accepting these alleged facts as true provides no basis for concluding that Dr. Leszkovitz did fulfill his responsibilities as laboratory director.

We also assume for purposes of summary judgment that Dr. Leszkovitz believed that Detroit Biomedical Laboratory would keep his laboratory in compliance with the myriad of federal and state clinical laboratory laws and regulations, and CLIA in particular. At most, these assumed facts would undercut the inference the ALJ drew (from the undisputed facts) that Dr. Leszkovitz was "indifferent" to his responsibilities. ALJ Decision at 11. Drawing that inference was not material to the ALJ's overall conclusion, however. Nothing in the CLIA regulations allows a laboratory director to cede responsibility for compliance to another entity. To the contrary, the regulations specifically make the laboratory director responsible for ensuring compliance, even when properly delegating some duties to a qualified person.

In sum, none of the evidence proffered by White Lake shows that there is a genuine dispute of fact material to the conclusion that White Lake did not meet the condition for laboratory director.

6. The remedies imposed in this case are appropriate, based on the undisputed facts, and White Lake did not raise a genuine dispute of fact material to this conclusion.

White Lake asserted that the evidence offered by CMS did not justify shutting down a laboratory and denying services to the community it served. White Lake asserted that CMS had made no finding about the quality of the testing at White Lake, and that, given the totality of the facts of the case, the "punishment" imposed is disproportionate to the actual violation. White Lake referred to the enforcement procedures in the CLIA regulations (specifically � 493.1816), arguing that the appropriate remedy was a plan of correction, rather than revocation of its certificate.

White Lake's arguments were again based on an erroneous premise regarding the bases for CMS's action. As discussed above, the undisputed facts establish that White Lake did not have a PT program that functioned as intended, nor a laboratory director who fulfilled his regulatory responsibilities.

White Lake's assertion that CMS had made no finding about the quality of the testing at White Lake implies that a specific finding to that effect was required in order to find that the conditions of certification were not met. Under the regulations, however, in order to provide assurances of quality while it was performing tests of moderate or high complexity, White Lake was required to have a PT program meeting the regulatory requirements. The legislative history of CLIA reflects the importance of a PT program in ensuring quality. White Lake's failures were sufficiently serious (even if intentional referral could not be proved) that CMS could reasonably determine that there were condition level deficiencies.

As White Lake pointed out, it is undisputed that, before the inspection, White Lake had surrendered its certificate to do tests of moderate or high complexity and held only a certificate of waiver. White Lake indicated that Dr. Leszkovitz would testify that an inability to do waived tests could cause harm to White Lake's patients and its medical practice, and we assume for purposes of summary judgment that this is so. ⁽¹⁶⁾

Under the regulations, however, CMS may revoke "any type of CLIA certificate" when a laboratory is out of compliance with one or more CLIA conditions, and CMS concurrently cancels the laboratory's approval to receive Medicare payment. 42 C.F.R. �� 493.1806, 493.1807, 493.1814; see also � 493.1840. The regulations also indicate that "alternative sanctions" are not appropriate for a laboratory with a certificate of waiver. 42 C.F.R. �� 493.1806(c).

White Lake did not specifically challenge CMS's authority to revoke a certificate of waiver based on a finding of noncompliance with a condition for another type of certificate, but argued only that the remedy was inappropriate here and inconsistent with the statutory and regulatory scheme of providing alternative sanctions. We disagree. While one purpose of the enforcement mechanisms is to protect individuals served by laboratories against substandard testing, another purpose is to "motivate laboratories to comply with CLIA requirements so that they can provide accurate and reliable test results." 42 C.F.R. � 493.1804. In our view, permitting voluntary surrender of a higher level certificate to substitute for revocation could frustrate CLIA enforcement efforts, particularly since voluntary surrender does not have the same consequences for an owner or operator that a revocation has. See 42 C.F.R. � 493.1840(a)(8).

Thus, we disagree with White Lake that the remedies imposed here were disproportionate to the findings and inconsistent with the statutory and regulatory enforcement scheme.

7. The decisions in which summary judgment was denied are distinguishable.

White Lake maintained that the Board's decision in Garden City Medical Clinic, DAB No. 1763 (2001) supported its right to a hearing. White Lake argued that its circumstances as well as its allegations and documentation provided here were "almost identical" to those in Garden City and that the Board in Garden City had reversed the ALJ determination not to provide Garden City an evidentiary hearing. White Lake noted that in Garden City, the Board had rejected the ALJ's reasoning, applied by the ALJ here as well, that inconsistencies between Garden City's work papers and reported PT results led to the conclusion that Garden City was not entitled to a hearing. White Lake Br. at 13-14 (citing Garden City, at 13-14).

White Lake asserted that the difference between this case and Garden City was that here CMS "chose not to name or submit the declarations of the individuals at AAB . . . who worked together to identify and report physician office laboratories which reported similar PT results." Thus, White Lake reasoned, CMS's Motion for Summary Judgment in this case was even less compelling than that presented in Garden City, where CMS had entered affidavits into the record. White Lake Br. at 14-15.

White Lake's reliance on the Board's decision overturning a summary judgment ruling in Garden City is misplaced. In that case, CMS (and the ALJ) had relied on affidavits from two experts as showing that intentional referral had occurred (including the affiants' opinions about the unlikelihood of identical results occurring without collaboration), and the experts' opinions were based on data and calculations that were not in the record. Garden City had specifically requested an opportunity to cross-examine the affiants about the bases for their opinions, and relied on its attestation statements in support of its assertion that the results it reported for the PT samples were the results obtained by testing the PT samples with its patient specimens using its routine methods. Here, in contrast, CMS did not rely on affidavits. Instead, CMS relied on undisputed facts, CMS conceded (at least for purposes of summary judgment) that the PT samples were tested using White Lake's routine methods, and the results that Mr. Dippold attested were obtained by using White Lake's routine methods were admittedly different from what he had recorded on White Lake's logs as having been obtained at White Lake for 47 tests in two testing events. In light of the undisputed facts in this case, testimony on the likelihood of the two laboratories achieving identical results, while relevant, would not be material to the outcome, even if it showed that two laboratories could reach such results without referral or communication.

This case is also distinguishable from the Sixth Circuit's recent decision in Crestview, supra, which involved a civil money penalty imposed against a nursing facility. In Crestview, the court found that the ALJ had employed a procedure inconsistent with that set out in the Civil Remedies Division Procedures Manual. The court also concluded that the ALJ had improperly weighed the evidence on certain issues, which is inappropriate at the summary judgment stage, and that the issues raised by the facility were material to the decisionmaking (which included the issue of whether the amount of the penalty was reasonable). Here, in contrast, the decision is based on undisputed facts. We have not weighed the evidence, but assumed that White Lake could prove the facts it asserted, concluding that those facts were not material to the outcome.

Conclusion

For the reasons stated above, we conclude that summary judgment in favor of CMS was appropriate.

Daniel Aibel

Donald F. Garrett

Judith A. Ballard
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. While the CLIA regulations do not specifically define "intentional referral," they do define "intentional violation" to mean "knowing and willful noncompliance with any CLIA condition." 42 C.F.R. � 493.2.

3. One reason the Board granted this request was to address process concerns raised by White Lake. Specifically, White Lake argued that the failure of the ALJ to make "separate numbered findings of fact and conclusions of law" on all of the issues addressed in his decision violated 42 C.F.R. � 498.74(a), made it exceptionally difficult for White Lake to meet the requirement to "identify (by number) each finding of fact and conclusion of law with which [Petitioner] take[s] exception" in its request for review, and, together with the ALJ's delay in issuing the decision (18 months after written submissions), amounted to a denial of due process. White Lake Br. at 28-29. We do not here rule on how section 498.74(a) applies to a summary judgment decision since the lack of detailed, numbered findings and conclusions did not unduly prejudice White Lake. White Lake's request for review was accepted as adequate, and White Lake had an opportunity to supplement its request in the oral argument. Moreover, the ALJ's pre-hearing order gave White Lake an opportunity to request an expedited proceeding, but White Lake did not request one. While it is regrettable that the ALJ could not issue the decision more quickly, it is not reversible error.

4. While the non-moving party does not have to prove its case to avoid summary judgment, the evidentiary burdens borne by the parties under the applicable substantive law are a factor in evaluating whether a rational trier of fact could find in favor of the non-moving party. See Lebanon; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (in ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burdens). In a CLIA revocation case, CMS has the initial burden of presenting a prima facie case (either through undisputed facts or evidence) that is legally sufficient to show that the laboratory has not met one or more conditions of participation; the laboratory then has the ultimate burden of persuasion to show by a preponderance of the evidence that it met the conditions. Edison Medical Laboratories, Inc. DAB No. 1713 (1999), aff'd, Edison Medical Laboratories, Inc., v. Thompson, 250 F.3d 735 (3^rd Cir. 2001); cf. Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. United States, No. 98-3789 (GEB) (D.N.J. May 13, 1999).

5. The summary judgment principle that proffered evidence must be viewed in the light most favorable to the non-moving party does not require us to speculate as to what testimony the listed witnesses might present if they were called. It is not, moreover, sufficient that White Lake suggested a need to cross-examine witnesses involved in CMS's investigation and decisionmaking, without showing that CMS relied on those witnesses for its case. While White Lake argued that it should have an opportunity to request subpoenas to obtain documents, White Lake provided no reason to think that any documents exist that are not available to it and that might make a difference to the decision. Indeed, White Lake did not seek a subpoena before the ALJ, nor avail itself of the opportunity provided to submit documentary exhibits to the ALJ. Nor did White Lake argue that the ALJ could not fairly rule on the summary judgment motion because White Lake had not first been provided an opportunity for discovery.

6. For example, White Lake said Nicholas Dippold's testimony would address "whether samples or portions of samples were transported to another location for testing, [and] whether the results that were recorded in the logs were indeed obtained on the premises of White Lake." Tr. at 38. CMS conceded that "it is not likely that anyone bothered carrying White Lake's samples somewhere else. It's more likely that somewhere else was Tisa Gabriel and perhaps other unknown places, and they already had their own." Tr. at 39. (This alludes to the AAB practice, discussed in other cases, of sending identical PT samples to all laboratories doing the same type of testing. White Lake conceded here that "proficiency testing samples sent to each laboratory are identical, i.e., specimen 1 at one laboratory is the same as specimen 1 at another laboratory . . . ." White Lake Br. at 16.) Also, CMS did not claim that the results recorded in the logs were not obtained from testing done on White Lake's premises, but argued that it did not matter because the results in the logs were not what White Lake reported to AAB. Tr. at 30.

7. In making these assumptions, we arguably go beyond the summary judgment standard. It is questionable whether any rational trier of fact would accept as credible testimony by Nicholas Dippold to the effect that his failure to report to AAB the results he recorded in White Lake's logs for 25 PT samples in one event and 22 in another was caused by honest error, given the undisputed fact that the results he reported for these samples were identical to what the TKG laboratory (where he also worked) reported. The potential credibility of such testimony (even if he gave it, which is speculative) is further undercut by documents submitted by CMS (the authenticity of which White Lake did not challenge). Those documents show, for example, that he gave June 12 as the date on which he performed the tests for White Lake's PT samples for the June 2000 event, but June 19 as the date he signed the attestation statement on which he reported results identical to that of the TKG laboratory - a date that was after the June 14 date he reported as the date on which he tested PT samples for the TKG laboratory. CMS Ex. 4, at 7-12; CMS Ex. 5, at 7-12. This comparison suggests that he deliberately waited to report White Lake's results until after he had done the tests at the TKG laboratory.

8. White Lake's reference to "all but 8 of 50 samples" reflects an error in the ALJ Decision, referring to CMS Exhibit 3 as showing that "17 of 25 samples" were identical in the second event. ALJ Decision at 7. In fact, the exhibit shows and it is undisputed that 22 of 25 (all but 3) of the reported results were identical.

9. Affirmed in RNA Laboratories, Inc. and Ter-Zakarian Medical Clinic, DAB No. 1820 (2002).

10. During oral argument, White Lake suggested that CMS's interpretation that physical transfer of PT samples is not required in order to find intentional referral was being applied only in Region V (and primarily to Michigan laboratories) and that a disparity among regions might raise equal protection issues. This suggestion was apparently based on White Lake's review of "the line of intentional referral cases." Tr. at 7-8. Even assuming that, in fact, all such cases involved Region V, however, this fact alone would not establish disparate treatment (much less evidence an inconsistent interpretation). At the very least, White Lake would have had to proffer evidence that laboratories in other regions, in fact, engaged in similar activities, but it did not make such a proffer.

11. For example, the laboratory must authorize the PT program to release "data required" to determine "the laboratory's compliance" with PT requirements and to make PT results available to the public. 42 C.F.R. � 493.801(a)(4). Obviously, the data the PT program has would include the results reported to it by the laboratory. That data would not function as intended, however, if it is based on results from another laboratory since it would not show satisfactory participation in a PT program by the reporting laboratory, as required for compliance, nor accurately inform the public of that laboratory's proficiency.

12. We note that the ALJ said that these discrepancies were "legally sufficient to establish the 'communications' and 'referral' violations prohibited by 42 C.F.R. � 493.801(b)(3) and (b)(4)." ALJ Decision at 10. Our analysis is based on the wording of subsections (b)(1) and (b)(5) and the condition statement in section 493.801, and does not require characterizing what occurred as either prohibited communications or prohibited referral.

13. We agree with White Lake that the ALJ erred in relying on testimony submitted in that case, but conclude that the error was harmless.

14. White Lake also said the ALJ's findings were not supported by substantial evidence. That standard does not apply here, however.

15. We note that the AAB forms provide for signature either by a technical supervisor or a technical consultant. For moderate complexity level testing, a laboratory must have someone who qualifies as a technical supervisor. 42 C.F.R. � 493.1447. For high complexity level testing, a laboratory must have someone who qualifies as a technical consultant. 42 C.F.R. � 493.1409. The laboratory director must either perform the duties of a technical supervisor or consultant or may delegate those duties to someone meeting the qualifications (although this does not clearly mean that the laboratory director may delegate his/her own duties under the regulations). 42 C.F.R. �� 493.1407(a), 493.1445. There was some confusion here over whether White Lake did only moderate complexity testing or both moderate and high complexity testing. In any event, White Lake did not allege that Mr. Dippold qualified either as a technical supervisor or as a technical consultant.

16. During oral argument, White Lake also argued that most waived tests are so simple they may be performed in a patient's home, and, therefore, any potential for harm to patients from allowing White Lake to retain its certificate would be minimal. The CLIA regulations recognize, however, that, even though waived tests may be relatively simple, serious risks to patients may result if the tests are not performed properly (for example, if the laboratory does not follow the test manufacturer's instructions). 42 C.F.R. �� 493.35(d)(2)(i), 493.15(e)(1).