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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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William Komaiko, M.D,, |
DATE: November 18, 2003 |
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Centers for Medicare & Medicaid
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Docket No.C-03-025
Decision No. CR1111 |
| DECISION | |
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DECISION
Petitioner, William Komaiko, M.D., was not an owner or operator of GenSys, Incorporated (GenSys), within the meaning of 42 U.S.C. � 263a(i)(3). Accordingly, he has no right to a hearing on, or to request a reopening of, my decision in Gen Sys Incorporated (Gen Sys). (1) Further, because Petitioner was not an owner or operator of GenSys within the meaning of 42 U.S.C. � 263a(i)(3), he is not subject to the two-year ban on owning or operating a clinical laboratory that is imposed by that statute. The Centers for Medicare & Medicaid Services' (CMS) declaration that 42 U.S.C. � 263a(i)(3) and its two-year ban applies to Petitioner is in error. The request for hearing is dismissed. I. PROCEDURAL HISTORY On April 15, 2002, I granted summary judgment for CMS in the case of Gen Sys. I affirmed the CMS suspension of the GenSys CLIA (2) certificate based on the existence of two condition-level deficiencies existing between the date of the survey, April 16, 1999, and the suspension of the laboratory's CLIA certificate on August 3, 1999. Pursuant to 42 C.F.R. � 493.1844(d)(4)(ii), the GenSys CLIA certificate was revoked effective the date of my decision. There is no dispute that Petitioner did not participate as a party in the Gen Sys case, either on his own or on the laboratory's behalf. In a letter dated May 23, 2002 (Notice), CMS notified Petitioner that based on my decision in Gen Sys, Petitioner would not be able to own, operate, or direct another laboratory until on or after April 15, 2004, two years from the effective date of the revocation of the GenSys CLIA certificate. CMS Exhibit (CMS Ex.) 5. The notice advised Petitioner that he had the right to request a hearing before an administrative law judge (ALJ) of the Department of Health and Human Services, Departmental Appeals Board (DAB). Petitioner requested a hearing by letter dated September 30, 2002. (3) The case was assigned to me on November 7, 2002, for hearing and decision. A hearing was conducted in this matter on May 15, 2003, in Chicago, Illinois, the substance of which is recorded in a 366 page transcript (Tr.) of the proceedings. Petitioner was advised of his right to the assistance of counsel and acknowledged his understanding of that right, but elected to proceed pro se. Tr. at 312. Petitioner's exhibits (P. Exs.) 1 through 20 were offered and admitted. Tr. at 14. CMS offered CMS exhibits (CMS Exs.) 1 through 10, which were admitted. Tr. at 12. CMS presented the testimony of Bonnie Scimeca. Petitioner called Robert Daly, Bonnie Scimeca, and himself to testify. The Parties filed their opening post hearing briefs and reply briefs in July 2003. II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
The following findings of fact are based on all the evidence of record:
III. DISCUSSION
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 is to ensure the accuracy and reliability of laboratory tests, and hence the public health of all Americans. See H.R. Rep. No. 899, 100th Cong. 2d Sess. 8, 18 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3839. CLIA grants the Secretary of Health and Human Services (Secretary) broad enforcement authority, including the ability to suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more requirements for certification. The Secretary has exercised his authority under 42 U.S.C. � 263a(f) and issued regulations implementing CLIA. See 42 C.F.R. Part 493. The Secretary's regulations give CMS broad authority to ensure that laboratories perform as Congress intended, including authority to inspect and sanction laboratories that fail to comply with the regulatory requirements. CMS certification of a laboratory under CLIA is dependent upon whether the laboratory meets the conditions for certification set out in the statute and regulations. 42 U.S.C. � 263a(f)(1)(E); 42 C.F.R. � 493.1 et seq. Pursuant to the enforcement provisions of the regulations, CMS may impose principal or alternative sanctions when it finds that a laboratory has a "condition-level" deficiency. 42 C.F.R. � 493.1804(b)(2). Principal sanctions include suspension, limitation, or revocation of a CLIA certificate. 42 C.F.R. � 493.1806(b). Alternative sanctions include a directed plan of correction, state on-site monitoring, and a civil money penalty. 42 C.F.R. � 493.1806(c). Cancellation and suspension of Medicare payments are also authorized. 42 C.F.R. � 493.1807(a). Where none of the deficiencies are a violation of a condition-level requirement, the laboratory must submit a plan of correction and show on revisit that it has corrected the deficiencies. 42 C.F.R. � 493.1816. CLIA provides at 42 U.S.C. � 263a(i)(1) that a laboratory's certificate may be suspended, revoked, or limited only after reasonable notice and opportunity for hearing to "the owner or operator of the laboratory . . . " The implementing regulations provide that a laboratory or prospective laboratory dissatisfied with an initial determination listed in 42 C.F.R. � 493.1844(b) is entitled to a hearing before an ALJ. 42 C.F.R. � 493.1844(a). The hearing procedures found in subpart D of Part 498 are incorporated by reference. 42 C.F.R. � 493.1844(a)(2). The "suspension, limitation or revocation of the laboratory's CLIA certificate . . . because of noncompliance . . . ." is the first listed initial determination subject to hearing before an ALJ. 42 C.F.R. � 493.1844(b)(1). Section 498.74 of 42 C.F.R. provides that, absent appeals to the DAB or the United States District or Circuit Courts, my decision is final unless I reopen and revise that decision. The regulation specifies no time-limit for reopening and revising a decision. In addition to sanctions directed against laboratories, the CLIA statute provides the following with respect to the owners and operators of non-compliant laboratories:
42 U.S.C. � 263a(i)(3). The implementing regulations do not include any express provision implementing or imposing this two-year prohibition against an offending owner or operator. (4) However, the regulations provide that CMS may revoke a laboratory's CLIA certificate if it finds that the owner or operator has -
42 C.F.R. � 493.1840(a)(8). CLIA does not include a definition of the term operator. However, the regulations define an "operator" as:
42 C.F.R. � 493.2. The "stated criteria" for a laboratory director to be considered an operator are those criteria described in the introductory sentence of the section, i.e., whether a person oversaw all facets of the operation of the laboratory and bore primary responsibility for the safety and reliability of the results of the all specimen testing performed in the laboratory. Sol Teitlebaum, M.D., DAB No. 1849, at n. 7 (2002). There are condition- level requirements for a CLIA certified laboratory to have a qualified laboratory director who is required to assume oversight and responsibility for the laboratory and the results of its testing. See 42 C.F.R. �� 493.1403, .1405, .1407, .1441, .1443, .1445.
CMS makes two primary arguments in this case: (1) Petitioner functioned as the laboratory director of GenSys and is, a priori, subject to the two-year prohibition of 42 U.S.C. � 263a(i)(3); and, (2) only the affected laboratory has a right to appeal the suspension, termination or limitation of a CLIA agreement and the two-year prohibition on owning or operating another laboratory is not appealable at all. Petitioner counters by arguing that: (1) he was never an operator, only a consultant who took on some duties normally fulfilled by a laboratory director; and (2) he did not cause the deficiencies that caused suspension and revocation, but attempted to remedy those deficiencies, and subsequently left upon finding it impossible.
Title 42 U.S.C. � 263a(i)(3) provides the following with respect to the owners and operators of noncompliant laboratories:
This statutory disability arises by operation of law immediately
upon revocation of a laboratory's CLIA certification. The statute requires
no action by the Secretary for the two-year ban to take effect, no discretion
is granted the Secretary, and there is no appeal right specified. The
Secretary has not promulgated regulations implementing this provision
of the statute. Therefore, the regulations do not specifically provide
a right to a hearing to an owner, operator, or director to challenge the
application of the two-year statutory ban, which is also not listed in
the regulations as an initial decision of CMS or the Secretary. 42 C.F.R.
� 493.1844(b). The statute and regulations only grant a right to a hearing
to challenge the CMS decision to sanction the laboratory and the basis
for that decision. (5) Id.
The plain language of 42 U.S.C. � 263a(i)(1)(C) provides a hearing to an "owner or operator" to challenge the revocation of their laboratory's CLIA certificate. Section 263a(i)(1)(C) of 42 U.S.C. states:
* * *
(Emphasis added.) Section 493.1844 of 42 C.F.R. sets forth the appeals procedures for CLIA cases. Subsection (1) of section 493.1844(a) provides that the section applies to all laboratories and prospective laboratories "that are dissatisfied with any initial determination under paragraph (b) of this section." While the regulatory language suggests that the right to request a hearing is with the laboratory, the statute is plain that it is the owners and operators of the laboratory who are granted the right to request a hearing. In order to construe 42 C.F.R. � 493.1844(a) consistent with the statute, the term "laboratory" in the regulation must be construed to include the owners or operators of the laboratory in question. Section 493.1884(b)(1) of 42 C.F.R. provides that a CMS determination to suspend, limit, or revoke a laboratory's CLIA certificate is an initial determination which is subject to review, under section 493.1884(a)(2), by DAB ALJs. Therefore, the plain language of the regulation gives me jurisdiction to hear appeals involving the suspension and/or revocation of a CLIA certificate brought by owners and operators who have the right to hearing under CLIA. When the facts of a given case raise issues as to who are the owners and operators entitled to exercise the right to hearing, such issues must be resolved in the hearing process both to determine the proper parties and the scope of my jurisdiction. If an ALJ concludes after inquiry that an individual is not an "owner or operator" within the meaning of CLIA, the individual is not entitled to request a hearing to challenge a CLIA certificate suspension or revocation. However, when it is found the individual is not an owner or operator for purposes of requesting a hearing, CMS and the Secretary cannot then conclude that the individual is an "owner or operator" for purposes of application of the two-year ban. My conclusions in this regard do not grant owners and operators a hearing to challenge the imposition of the two-year ban of 42 U.S.C. � 263a(i)(3), rather, I recognize the owners' and operators' right to request a hearing to contest the CMS findings of deficiencies and whether they are responsible for any alleged regulatory violations. The CLIA statute refers to owners and operators as having a right to a hearing and as being subject to the two-year ban and not laboratory directors. However, by regulation, specifically 42 C.F.R. � 493.2, the Secretary has expanded the definition of operator to include laboratory directors who meet the criteria of, or have equivalent duties and responsibilities of an operator. Based on this regulatory definition of operator, CMS asserts that the two-year ban of 42 U.S.C. � 263a(i)(3) applies equally to laboratory directors who fit the definition. Because those laboratory directors who meet the definition are considered operators, the operator's statutory right to hearing must logically extend to those laboratory directors who are defined as operators to avoid an obvious inconsistency arising between the regulations and the statute. Accordingly, CMS cannot argue on one hand that a laboratory director is an operator and subject to the two-year ban, but on the other hand not entitled to request a hearing as an operator. My conclusions are consistent with prior DAB and ALJ decisions. See, e.g., Sol Teitlebaum, M.D., DAB CR863, aff'd DAB No. 1849 (2002); Carlos A. Cervera, M.D., DAB CR939 (2002); Edward Ming-Che Lai, M.D., DAB CR848 (2001); RNA Laboratories, Inc. and Ter-Zakarian Medical Clinic, DAB CR829 (2001); Sentinel Medical Laboratories, Inc., DAB CR679, aff'd DAB No. 1762 (2001); Eugene R. Pocock, M.D., DAB CR527 (1998). In summary, an individual who is an operator or a laboratory director who has equivalent duties and responsibilities as an operator has a right to a hearing on whether a laboratory's CLIA certificate should be revoked. In the hearing process, an owner, operator or laboratory director may raise any issues regarding whether they are a proper party to the proceedings and whether they are subject to my jurisdiction. (6) An individual who is not an operator or equivalent does not have a right to a hearing and is not a proper party, but is also not subject to the two-year prohibition of 42 U.S.C. � 263a(i)(3).
I conclude that Petitioner, Dr. Komaiko, has no right to a hearing to challenge the CMS notice that he was subject to the two-year ban of 42 U.S.C. � 263a(i)(3). However, if CMS is correct that Dr. Komaiko was a laboratory director of GenSys who also met the statutory and regulatory definitions of an operator, then Dr. Komaiko had a right to notice and an opportunity to be heard on the issues of whether the GenSys CLIA certificate should have been revoked and whether he was a proper party to such proceeding. 42 U.S.C. � 263a(i)(1)(c); 42 C.F.R.� 493.1884(a). CMS argues that Petitioner knew about the proceedings against GenSys and Petitioner does not deny he had knowledge. However, there is no dispute that CMS did not give Petitioner the notice of sanctions and advice of appeal rights required by 42 C.F.R. � 493.1844(g). Tr. at 18-19. As a result, Petitioner was not on notice that he was considered by CMS to be responsible for the deficiencies at GenSys, and he was not afforded an opportunity to appear in the Gen Sys proceeding to defend the laboratory or himself. One remedy for this clear violation of due process would be to reopen Gen Sys so that Petitioner could have an opportunity to dispute that he was a proper party or to defend the laboratory. Another remedy would be to conclude that CMS is simply barred from finding Petitioner was responsible for the laboratory. Barring CMS would be consistent with achieving administrative finality, but might run afoul of the important purpose of CLIA. If, however, it is concluded that Petitioner was not an operator (7) of GenSys within the meaning of the regulation or the statute, then he would have no right to participate in Gen Sys, but he also would not be subject to the two-year ban as a matter of law.
CLIA, as codified at 42 U.S.C. � 263a, includes no specific definition of the term operator. Section 263a(i)(3) of 42 U.S.C. states that "[n]o person who has owned or operated a laboratory which has had its certificate revoked" may own or operate another laboratory for two years. The plain language of the statute seems to apply to all present and past owners and operators of a laboratory extending its two-year ban to all without consideration of whether they caused the revocation of the laboratory's CLIA certificate. However, such a literal interpretation does not seem reasonable. Because the plain language of the statute may not reflect the intent of Congress, review of the legislative history of the statute is appropriate in determining how it should be applied. United States v. Five Gambling Devices, 346 U.S. 441 (1953); United States v. Thirty-Seven (37) Photographs, 402 U.S. 363 (1971) (court will look to legislative history to construe a statute and avoid constitutional questions). The CLIA legislative history includes the following note of the Congressional Committee related to the two-year ban of 42 U.S.C. � 263a(i)(3) :
Pub. L. No. 100-578; 102 Stat. 2903; H.R. Rep. No. 100-899, at 35. The Committee clearly intended to prevent owners and operators who failed to properly administer a CLIA laboratory, leading to revocation of that laboratory's CLIA certificate, from simply opening another laboratory. The language of the note further indicates that the Committee intended to apply the two-year ban to owners and operators when their conduct "precipitated the revocation" of the CLIA certificate or they bore "ultimate responsibility for the conduct" that led to the revocation. Thus, to determine whether Petitioner, Dr. Komaiko, was an "operator" within the meaning of 42 U.S.C. � 263a(i)(3) for purposes of application of the two-year ban and to determine whether he was a proper party to the Gen Sys proceedings, it is necessary to determine whether his conduct "precipitated the revocation" of the GenSys CLIA certificate or whether he bore "ultimate responsibility for the conduct" that led to the revocation.
My decision in Gen Sys, dated April 15, 2002, speaks for itself. It is important to note however, that decision was on a CMS motion for summary judgment and not after a full trial of the case. The summary judgment standard required that I construe all facts in favor of the nonmovant, GenSys, to determine whether there were any issues for hearing or whether the case had to be resolved as a matter of law against GenSys as CMS argued. Gen Sys, at 8-9. Based on my review of the pleadings and affidavits filed in the case, I concluded that summary judgment was appropriate as there were no material issues of fact to be resolved with regard to two condition-level deficiencies, either of which justified suspension and revocation of the GenSys CLIA certificate. I concluded that the condition-level deficiencies related to lack of a qualified technical supervisor and lack of a qualified laboratory director existed between April 16, 1999, the date of the survey of GenSys, and August 3, 1999, the date the GenSys CLIA certificate was suspended and presumably all CLIA-related operations stopped. Id. at 10, 12. I did not consider and made no findings regarding the other deficiencies alleged by CMS. In determining the reasonableness of the suspension and revocation of the GenSys CLIA certificate, I construed the facts most favorably to GenSys for purposes of summary judgment and found that GenSys did have a qualified laboratory director from August 10, 1999 to September 20, 1999 when Petitioner Komaiko was laboratory director, and then beginning again on August 7, 2000. Id. at 14. I note that I made no specific finding in my decision in Gen Sys that Dr. Komaiko was subject to the two-year ban of 42 U.S.C. � 263a(i)(3) as an operator of or a laboratory director with equivalent duties and responsibilities. Neither the petitioner in Gen Sys nor CMS appealed my decision.
I agree with CMS that, given the definition of laboratory director and the comprehensive description of laboratory directors' responsibilities, the regulations establish a rebuttable presumption that a laboratory director is also an operator. 42 C.F.R. �� 493.2; 493.1403; 493.1405; 493.1407, .1441, .1443, .1445. Therefore, CMS can establish a prima facie case that an individual was an operator by proving that he/she was registered as the laboratory director or other competent evidence that he or she assumed the position. In Gen Sys, I found that Petitioner was laboratory director of GenSys, Incorporated, from August 10, 1999 to September 20, 1999. Id. at 14. Petitioner made a diligent effort in this case to convince me that he was only a consultant for GenSys and that he carefully crafted his contract of employment to avoid responsibility as an operator of GenSys. He also notes that he never signed the official CMS form indicating he assumed the laboratory director position. P. Post Hearing Brief at 6-11. Nevertheless, Petitioner admits at page 11 of his post hearing brief that he "accepted responsibilities of the directorship, essentially as an add-on, or parenthetical aspect of my contract (emphasis in original)." Further, Petitioner's contract with GenSys indicated that he "accepts interim responsibilities of acting Medical Director." P. Ex. 2; CMS Ex. 8, at 1. The final consultant report that Petitioner admittedly prepared indicates that "[r]esponsibilities of the Laboratory Director (Medical Director) were temporarily subsumed within the consultantship" to address the condition-level deficiency related to absence of a qualified laboratory director. P. Ex. 3, at 1; CMS Ex. 8, at 2. Thus, I am not persuaded by Petitioner's arguments. The evidence clearly shows that for a brief period he accepted responsibility as laboratory director for GenSys. Accordingly, there is a rebuttable presumption that he was an operator of GenSys. However, in granting summary judgement for CMS in Gen Sys, I concluded that revocation was appropriate based on the lack of a qualified technical supervisor and lack of a qualified laboratory director between April 16, 1999, the date of the survey of GenSys, and August 3, 1999, the date the GenSys CLIA certificate was suspended and presumably all CLIA-related operations stopped. Gen Sys at 10, 12. I made no findings in Gen Sys as to whether other deficiencies or the failure to correct deficiencies after August 3, 1999, provided a basis for revocation as such findings were unnecessary given the CMS motion for summary judgment. Because Petitioner became laboratory director after the suspension of the Gen Sys CLIA certificate, he cannot be said to have precipitated or been ultimately responsible for the conduct that gave rise to those condition-level deficiencies that caused the revocation. (8) CMS argues that Petitioner should nevertheless be held responsible because he failed to correct the deficiencies that caused the revocation or take other action that might have assisted CMS. CMS Post Hearing Brief at 16-17; CMS Post Hearing Reply Brief at 5. CMS overlooks, however, that it failed to ensure Petitioner was made a party to the Gen Sys proceeding; that it requested summary judgment rather than pursuing a full trial where all issues could have been addressed; and that it filed no appeal of my decision on summary judgment. My decision in Gen Sys was not based on the failure to correct condition-level deficiencies or their continued existence at the time of the hearing, rather it was based on the existence of those deficiencies as specified in the decision. The Gen Sys decision was never appealed by either party and is now final. (9) I conclude that Petitioner did not precipitate and was not ultimately responsible for the conduct that caused the revocation of the GenSys CLIA certificate. Thus, I conclude that Petitioner was not an operator against whom Congress intended to apply the two-year ban of 42 U.S.C. � 263a(i)(3).
As already discussed in detail, Petitioner was not an operator of Gen Sys within the meaning of CLIA for purposes of challenging revocation of the GenSys CLIA certificate or for application of the two-year ban. Accordingly, he had no statutory right to participate in the Gen Sys proceedings and he has no standing to request reopening of the Gen Sys decision or to have a hearing. Accordingly the request for hearing is dismissed. IV. CONCLUSION For the foregoing reasons, the Petitioner's request for hearing is dismissed. |
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| JUDGE | |
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Keith W. Sickendick Administrative Law Judge |
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| FOOTNOTES | |
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1. See Gen Sys Incorporated, DAB CR889 (2002). 2. Clinical Laboratory Improvement Amendments of 1988, codified at 42 U.S.C. � 263a (CLIA). 3. I note that Petitioner filed his request for hearing on September 30, 2003, one hundred twenty-five days subsequent to the date it is presumed that he received CMS's Notice dated May 23, 2002. Section 498.22(b)(3) of 42 C.F.R. provides that the date of receipt of the notice is presumed to be 5 days after the date of such notice unless there is a reasonable showing to the contrary. Here, Petitioner established the existence of causes beyond his ability to control which resulted in his not receiving CMS's Notice until August 20, 2002, thus, I find good cause was shown. CMS has not raised the issue of an untimely filed request for hearing and I accept Petitioner's September 30, 2003 request for hearing as properly filed. 4. This prohibition is a statutory disability rather than a sanction as that term is used in CLIA and its implementing regulations. Black's Law Dictionary (6th ed.1990) defines disability as the "want of legal capability to perform an act" while a sanction is "a penalty or punishment provided as a means of enforcing obedience to a law." Disability seems the more apt characterization of the "ineligibility" to own or operate imposed by the statute. Furthermore, the regulations are very specific in listing the sanctions that CMS may impose and the two-year ban or ineligibility provided by the statute is not included. See 42 C.F.R. �� 493.1, 493.1806-1807. 5. The Secretary has provided by regulation that a laboratory's CLIA certificate may be suspended, limited or revoked if it is determined that an owner or operator has owned or operated a laboratory which had its CLIA certificate revoked within the preceding two years. 42 C.F.R. � 493.1840(a)(8). Thus, it is necessary for CMS to correctly determine who is subject to the two-year ban in order to enforce this regulatory provision. 6. Ideally, such issues will be identified early in the hearing process by motion or otherwise to minimize wasted time and other resources. 7. It has never been alleged that Dr. Komaiko was an owner of the laboratory. 8. In fact his presence as laboratory director arguably remedied for a brief period the deficiency that gave raise to the declaration of immediate jeopardy. 9. Ideally, CMS would identify all owners, operators and laboratory directors that it deems responsible for a laboratory's deficiencies and provide them the notice required by the regulation. The notion that these individuals have no right to an appeal and require no notice is contrary to the language of CLIA as previously discussed. While litigation involving multiple potential parties is more burdensome, it would ensure that the litigation might finally end with all parties being bound. |
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