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CASE | DECISION | JUDGE | FOOTNOTES

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


SUBJECT:

Gen Sys, Incorporated,

Petitioner,

DATE: April 15, 2002
                                          
             - v -

 

Centers for Medicare & Medicaid Services

 

Docket No.C-00-007
Decision No. CR889
DECISION
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DECISION

Summary judgment is entered affirming the determination of Respondent, Centers for Medicare & Medicaid Services (CMS), (1) suspending Petitioner's certificate of participation under the Clinical Laboratory Improvement Act (CLIA). Pursuant to 42 C.F.R. 493.1844(d)(4)(ii), Petitioner's CLIA certificate is revoked effective the date of this decision due to the prior CMS suspension of the certificate based on a finding of immediate jeopardy. By operation of law, the owners and operators of Petitioner are prohibited from owning, operating, or directing a laboratory for two years pursuant to 42 U.S.C. 263a(i)(3) due to the revocation of Petitioner's certificate. The two-year prohibition runs from the date of the revocation of the laboratory's certificate pursuant to 42 U.S.C. 263a(i)(3) - the date of this decision. Summary judgment is appropriate as there are no genuine issues of material fact in dispute and the controlling issues may be resolved as a matter of law.

PROCEDURAL HISTORY AND ADMISSION OF EXHIBITS

1. Procedural History:

Petitioner, Gen Sys, Inc., is a clinical laboratory located in Aurora, Illinois. Petitioner sought certification pursuant to CLIA to participate in the Medicare and Medicaid program. On April 16, 1999, CMS and the Illinois Department of Public Health personnel conducted an initial survey of Petitioner's laboratory to determine compliance with applicable CLIA conditions and requirements. The survey team noted both condition and standard level deficiencies and Petitioner was notified accordingly. Upon the resignation of Petitioner's director, Respondent declared that immediate jeopardy existed for the public by virtue of Petitioner's continued operation and its CLIA certificate was suspended effective August 3, 1999.

Petitioner timely requested a hearing on September 24, 1999. Petitioner disputed all findings of the survey of April 16, 1999 and the propriety of the suspension by Respondent. The request for hearing was received and the case was assigned to Judge Alfonso Montano for hearing. On November 22, 2000, Respondent filed its motion for summary affirmance. Petitioner filed is response to the motion on April 6, 2001, opposing summary judgment. Respondent replied on June 15, 2001. The case was reassigned to me for hearing and decision on October 18, 2001. I have jurisdiction and this case is ripe for decision on the issues set forth hereafter. I have decided that summary judgment is appropriate in this case and no hearing is necessary or required to make a full and complete adjudication.

2. Admission of Exhibits:

Petitioner has submitted 47 numbered exhibits and an affidavit from Stephen R. Wechter executed April 6, 2001, which was attached to Petitioner's response to CMS's motion for summary affirmance and which I marked as Petitioner's exhibit 48 (P. Exs.1 - 48). Respondent made no objection to any of Petitioner's exhibits and they are all admitted.

Respondent submitted 13 exhibits with its motion for summary affirmance and an additional 9 exhibits with its reply brief. The exhibits submitted with the opening brief will be referred to as "R. Ex." and those submitted with Respondent's reply will be referred to as "RR Ex." (2)

Although no objection was made by Petitioner, the first two pages of R. Ex. 1 are not admitted. It appears from the face of the first two pages of R. Ex. 1 that they are part of a statement of deficiencies and plan of correction for a survey of Heartland Manor at Carriage Town, Flint, Michigan that was completed February 12, 1999. The provider listed on the first two pages of R. Ex. 1 is not a party in this case. Therefore, those pages are irrelevant and are not admitted. The balance of the pages appear on their face to relate to Petitioner and, absent objection, they are admitted. (3)

Petitioner specifically objects to the admission of: (1) R. Ex. 10, which purports to be a "Consultants [sic] Final Report: William Komaiko, M.D. of ProbeLabs to Gen Sys, Inc. 9/20/99; (2) R. Ex. 11, an unsigned, undated document with the first page titled "The Corporation" and the remaining pages bearing questions and answers purportedly related to Gen Sys, Inc.; and, (3) R. Ex. 12, titled "Introduction to the Spirochetes." Petitioner's Response, at 25, 73 - 76.
In administrative adjudications conducted pursuant to the Administrative Procedures Act, 5 U.S.C. 556(d) provides that "(a)ny oral or documentary evidence may be received, but the agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence." Pursuant to 42 C.F.R. 498.61, I may receive evidence in an administrative adjudication that would not be admissible under the rules of evidence applicable to a court proceeding. Thus, the primary considerations for the admission of evidence in an administrative adjudication are whether the evidence offered is relevant, and in the case of documents, whether they are authentic. Evidence is not excluded simply because it is hearsay, but the fact that evidence is hearsay may impact the weight it is given in deliberation and decision. Petitioner raised hearsay objections to all three documents and those objections are overruled as to all three documents.

Petitioner also objected to R. Ex. 10 arguing that it is not authenticated pursuant to Fed. R. Evid. 901. Although Fed. R. Evid. 901 does not technically apply, we often look to the Federal Rules of Evidence for guidance. Rule 901 provides an excellent but not exhaustive list of methods to establish authenticity. In this instance, I note it significant that Petitioner has chosen not to deny the authenticity of R. Ex. 10 but rather only to note the documents that comprise R. Ex. 10 have not been authenticated. On summary judgment, the absence of denial is as good as an admission, and the exhibit should be considered. However, it is also possible in this case to authenticate the documents based on their context and content. For example, the report is dated September 20, 1999, approximately the ending date of Dr. Komaiko's admitted relationship with Petitioner. (4) The documents also contain a significant number of facts related to Petitioner and this case, the accuracy of which are reflected by the evidence and pleadings offered by Petitioner. Based upon the foregoing factors, I am satisfied that the documents submitted as R. Ex. 10 are what they purport to be. Therefore, R. Ex. 10 is admitted. See generally, Fed. R. Evid. 901.

R. Ex. 11 is not admitted because I cannot determine its authenticity. Counsel for CMS represent in their reply brief at page 10 that the documents were originally filed in a law suit in the State of Illinois and that they are part of a public record. Although I may accept an assertion by counsel as sufficient to establish authenticity of a document in some cases, counsel's assertion is not sufficient in this case because the fact that counsel retrieved the documents from the records of a civil litigation involving Petitioner does not establish that Petitioner was the source of the documents. CMS counsel have not revealed whether the State court accepted the documents as authentic. Even if I accepted the documents as authentic, I would assign them little weight without more certainty that they originated from Petitioner and were unaltered.

R. Ex. 12 is admitted. Authenticity is established by the website address which appears at the bottom of each page of the document and the attribution found near the middle of the second page. Although the document is admitted as authentic and has some relevance due to its subject matter, it has no bearing on my decision in this case.

Respondent's exhibits that are admitted are R. Ex. 1 (except pages 1 and 2), 2 through 10, 12, 13, and RR. Ex. 1 through 9. R.R. Exs. 6 and 8 are admitted as no objection was filed and they appear to be minimally relevant. However, these documents only indicate the pendency of criminal and civil cases involving some of the principals of Petitioner and do not indicate any findings of guilt or liability. Therefore R.R. Exs. 6 and 8 are given no weight and have no impact on my decision.

GOVERNING LAW

CLIA establishes requirements for all laboratories that perform clinical diagnostic tests on human specimens and provides for federal certification of such laboratories. Pub. L. No. 100-578, amending 353 of the Public Health Service Act, codified at 42 U.S.C. 263a 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. 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 CLIA, the Secretary of the Department of Health & Human Services (HHS) has 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 regulations specify standards and the specific conditions of certification that a laboratory must meet to achieve compliance. The regulations confer broad authority on CMS to ensure that laboratories perform as Congress intended, including authority to inspect and sanction laboratories that fail to comply with the regulatory requirements. CMS has the delegated authority to 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.

The regulations specify "conditions" and "standards" that laboratory's must meet and maintain in order to obtain and retain their CLIA certification and their eligibility to receive Medicare or Medicaid reimbursement. Title 42 C.F.R. 493.1441 through 1445 provide an example. The condition specified at section 493.1441 is that a laboratory performing high-complexity testing, must have a laboratory director who meets the qualifications of section 493.1443 and has the duties specified in section 493.1445. Sections 493.1443 and 1445 are both characterized as "standards" and each respectively lists in detail, required qualifications and required duties for a laboratory director. Pursuant to the enforcement provisions, 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 civil money penalty. 42 C.F.R. 493.1806(c). Cancellation and or suspension of Medicare payments are also authorized. 42 C.F.R. 493.1807.

The phrase "immediate jeopardy" is defined at 42 C.F.R. 493.2 to mean:

(A) situation in which immediate corrective action is necessary because the laboratory's noncompliance with one or more condition level requirements has already caused, is causing, or is likely to cause, at any time, serious injury or harm, or death, to individuals served by the laboratory or to the health or safety of the general public.

If, on inspection, a laboratory is found to have condition-level deficiencies that pose immediate jeopardy, CMS must require immediate action to remove the jeopardy and may impose alternative sanctions to assist. If the deficiencies remain on revisit, CMS may suspend or limit and later revoke the laboratory's CLIA certificate. CMS is also delegated authority to bring a civil suit for injunction against a laboratory in specified circumstances where there is immediate jeopardy. 42 C.F.R. 493.1812. Condition-level deficiencies that do not constitute immediate jeopardy and standard level deficiencies that do not rise to condition level are treated differently and the laboratory is generally accorded 12 months in which to make corrections. 42 C.F.R. 493.1814-1816.

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 Secretary's 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 Administrative Law Judge (ALJ). 42 C.F.R. 493.1844(a). CMS's decision to suspend, limit, or revoke a laboratory's certificate due to noncompliance with CLIA requirements is an initial determination that is subject to appeal and a hearing by an ALJ. However, the CMS determination that condition-level deficiencies pose immediate jeopardy is not subject to appeal or review. 42 C.F.R. 493.1844(b)(1) and (c)(6). Generally, the suspension, limitation, or revocation of a CLIA certificate is not effective if appealed, until the ALJ makes a decision. However, when CMS declares immediate jeopardy, there is no delay in the suspension, limitation, or revocation of the offending laboratory's CLIA certificate. 42 C.F.R. 493.1844(d)(2).

CLIA provides the following with respect to the owners and operators of noncompliant laboratories in addition to sanctions which may be imposed directly against a laboratory:

(3) Ineligibility to own or operate laboratories after revocation.

No person who has owned or operated a laboratory which has had its certificate revoked may, within 2 years of the revocation of the certificate, own or operate a laboratory for which a certificate has been issued under this section.

42 U.S.C. 263a(i)(3). This statutory disability arises by operation of law immediately upon revocation of a laboratory's certification. No action by the Secretary is required, no discretion is granted the Secretary, and there is no appeal.

Four condition-level deficiencies are alleged in this case: (1) violation of 42 C.F.R. 493.1227, (2) violation of 42 C.F.R. 493.1447, (3) violation of 42 C.F.R. 493.1701, and (4) violation of 42 C.F.R. 493.1441. (5) Section 1227 sets the conditions for bacteriology for laboratories. Section 1447 establishes conditions to be met by the individual holding the technical supervisor position in a laboratory performing high complexity testing with specific references to qualifications (42 C.F.R. 493.1449) and technical supervision of laboratory operations and personnel (42 C.F.R. 1451). Section 1701 provides the condition that a laboratory must "establish and follow written policies and procedures for a comprehensive quality assurance program . . ." that cover all facets of the laboratory's operations. Section 1441 establishes the conditions that must be met by the individual holding the laboratory director position in a laboratory that performs high complexity testing, including qualifications (42 C.F.R. 1443) and management responsibilities (42 C.F.R. 493.1445).

ISSUES

(1) Whether summary judgement is appropriate.

(2) Whether one or more condition-level deficiencies existed at Petitioner's laboratory during the period April 16, 1999 and August 3, 1999 the date of suspension of Petitioner's CLIA certificate by Respondent.

(3) Whether suspension of Petitioner's CLIA certificate is justified by the condition-level deficiencies that did exist at Petitioner's laboratory during the period April 16, 1999 to August 3, 1999. (6)

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ANALYSIS

The findings of fact and conclusions of law noted below are followed by a detailed discussion.

1. Summary judgment is appropriate.

Pursuant to 42 C.F.R. 1844(f) it is presumed that Petitioner has a right to a hearing in this case. See Garden City Medical Clinic, DAB No. 1763 (2001), citing 42 U.S.C. 263a(i)(1) and 42 C.F.R. 493.1844(a). However, summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party. See e.g., Fed. R. Civ. P. 56(c); Garden City, supra, Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1977) (in-person hearing required where non-movant shows there are material facts in dispute that require testimony).

Respondent has moved for summary judgment arguing it is entitled to judgment as a matter of law as there are no material facts in dispute. Petitioner argues that there are material facts in dispute as to every alleged deficiency and that Petitioner was actually in compliance with all CLIA requirements. CMS has alleged numerous deficiencies regarding specific standards in addition to the four condition-level deficiencies. Certainly, it is not unreasonable to assume that there are many disputed facts related to Petitioner's scientific methods and its method of operation that could be the subject of a hearing with voluminous exhibits and multiple experts. However, in opposing Respondent's motion for summary judgment, Petitioner bears the burden of showing that there are material facts that are disputed. Everett Rehabilitation and Medical Center, DAB No. 1628 (1977). It is not sufficient for Petitioner to rely upon mere allegations or denials to defeat the motion and proceed to hearing. Petitioner must, by affidavits or other evidence which set forth specific facts, show that there is a genuine issue for trial. If Petitioner cannot show by some credible evidence that there exists some genuine issue for trial, then summary judgment is appropriate. Respondent must prevail as a matter of law. Moreover, in this case the CMS citation of condition-level deficiencies makes Petitioner's task of overcoming summary judgment even more burdensome. CMS imposed the principal sanction of suspension of Petitioner's CLIA certificate which will become a revocation of that certificate if I affirm the CMS action. Any one of the four condition-level deficiencies if proved may be sufficient to sustain the suspension by CMS. Therefore, if there is no disputed, material fact and no genuine issue for trial as to one of the condition-level deficiencies, summary judgment may be entered as to that deficiency. The issue then is whether or not that one deficiency is sufficient to support CMS' decision to impose the remedy, i.e., whether the remedy is warranted given the deficiency.

I have carefully reviewed all the evidence and conclude that there are no material issues of fact regarding the condition-level violations of 42 C.F.R. 1441 and 1447 and judgment should be entered for Respondent on those violations as a matter of law. (7) Petitioner has not met its burden of presenting and arguing some credible facts that show there is a genuine issue of material fact as to these condition-level violations. Petitioner requested an evidentiary hearing on the motion for summary judgment proposing to call several witnesses to testify. Petitioner's Response, at 24. The request for hearing is denied. Conducting an evidentiary hearing on a motion for summary judgment would defeat the purpose for summary judgment. Indeed, a finding that an evidentiary hearing was necessary would be tantamount to a denial of summary judgment. I further conclude that the condition-level violations of sections 1441 and 1447 are a sufficient basis for the suspension and revocation of Petitioner's CLIA certificate given the facts and circumstances in this case.

2. Two condition-level deficiencies existed at Petitioner's laboratory during the period April 16, 1999 and August 3, 1999, the date of suspension of Petitioner's CLIA certificate by Respondent. (8)

a. Petitioner did not have a qualified "technical supervisor" because he did not have a bachelor's or higher level degree from an accredited institution in the appropriate discipline, a violation of 42 C.F.R. 1447.

There is no dispute that Stephen R. Wechter was the laboratory "technical supervisor" when the April 16, 1999 survey was conducted. Respondent, determined based on the survey of April 16, 1999, that Mr. Wechter did not meet the qualifications for a "technical supervisor as required by 42 C.F.R. 1447 and listed at 42 C.F.R. 1449. P. Ex. 1, at 10; Tag 6108. During the survey, Mr. Wechter presented the surveyors with copies of diplomas and his curriculum vitae (CV). P. Ex. 1, at 11. Mr. Wechter has provided copies of two diplomas and his CV for my consideration at P. Ex. 11. Subsequent, to the on-site survey, the surveyors further investigated Mr. Wechter's educational credentials finding that the Eurotechnical Research University was, in 1992 when Mr. Wechter's degree was conferred, operating from a post office box in Hilo, Hawaii, and not accredited. P. Ex. 11 (diploma from Eurotechnical indicates it was "conferred at Hilo, Hawaii" on June 15, 1992); R.R .Ex. 5. Mr. Wechter asserts in the multiple affidavits filed in this matter and his CV, that the Doctor of Philosophy conferred upon him by Eurotechnical was in the area of immunology. P. Ex. 11 (diploma and CV); P. Exs. 14, 17, 23, 24, 29, 38, 45, 48. Respondent could not determine based upon its investigation whether or not the Ph.D. was related to the area of immunology and the diploma makes no mention of "immunology" on its face. Respondent's investigation did disclose that Mr. Wechter's "post baccalaureate" studies at the University of Houston in 1975, 1985, and 1986 were in the area of history and no degree was conferred. P. Ex. 1, at 13. Mr. Wechter's CV indicates he studied at the University of Houston but does not specify the field of study but he asserts in his affidavit that his studies were in the area of microbiology, biochemistry, chemistry, and organic chemistry. Mr. Wechter's CV reflects an undergraduate degree from Columbia University in New York awarded in 1982. His diploma indicates he was awarded a Bachelor of Arts (B.A.) with honors in history ( P. Ex. 11), which is consistent with the investigation of Respondent (P. Ex. 1). I will assume for purposes of summary judgment that Mr. Wechter's Ph.D. was conferred in the area of immunology - an inference drawn in Petitioner's favor. However, it is the undisputed evidence in this case that the degree was conferred by an unaccredited institution. Petitioner has presented no evidence, even by way of affidavit, to show that the institution was accredited.

It is undisputed that Mr. Wechter's education at Columbia where he received his B.A. was in the area of history. Mr. Wechter asserts in his affidavit at P. Ex. 11 that his studies at the University of Houston in Texas were in microbiology, biochemistry, chemistry and organic chemistry. Respondent's investigation involved contact with the Registrar at the University of Houston who reviewed University records and reported that Mr. Wechter's studies were in history. P. Ex. 1, at 12-13. For purposes of ruling on summary judgment, I will assume that Mr. Wechter's studies were in the areas he alleges, even though he has presented no transcripts or other evidence to back his claim, an inference drawn in Petitioner's favor. But, it is undisputed that Petitioner received no degree from the University of Houston.

Viewing the evidence on this point in a light most favorable to Petitioner, I see that Mr. Wechter was issued a Ph.D. in the area of immunology. But there is no dispute that the institution that issued the degree was unaccredited. Mr. Wechter studied at the University of Houston in the areas he alleges. But it is undisputed that he was awarded no degree for his work at the University of Houston. Mr. Wechter received a B.A. degree from Columbia University. But there is no dispute that his B.A. was in the area of history.

The minimum education requirement for a technical supervisor in a laboratory performing high-complexity testing is a bachelor's degree from an accredited institution in one of the specified science disciplines. 42 C.F.R. 493.1449. Mr. Wechter's only degree from an accredited institution is his B.A. from Columbia University in the area of history. Thus, Mr. Wechter does not meet the minimum education requirements for a technical supervisor.

Petitioner never alleges in its pleadings or offers any evidence to show that Mr. Wechter's Ph.D. was actually issued by an accredited institution. See e.g. P. Ex. 2, at 4. Rather, Petitioner argues that "in an effort to appease Respondent" Ellen Katz was hired to serve as technical supervisor. Petitioner's Response, at 16, 40. On June 30, 1999, Ms. Katz signed a list of technical supervisor duties. She was listed on a CLIA Laboratory Personnel Report (Form HCFA-209) signed by the laboratory director Dr. Janes bearing that same date. P. Ex. 4, Attachment 17 & 18. Nevertheless, Mr. Wechter and not Ms. Katz signed the plan of correction dated July 8, 1999. P. Ex. 4. Although it is not possible to decide from the record the date she left the position of technical supervisor, Petitioner concedes in its brief that Ms. Katz left the position after only a brief period. The fact that it was Mr. Wechter and not Ms. Katz who signed the plan of correction on July 8, 1999, tends to indicate that: Ms. Katz never assumed the responsibilities of the position; or that she was just listed to "appease" CMS as counsel for Petitioner states and Mr. Wechter actually continued to function as technical supervisor; or Ms. Katz resigned before that date. However, viewing the evidence in a light most favorable to Petitioner, I will conclude for purposes of this motion that Ms. Katz actually held the position until around January 2000 when Petitioner prepared a revised plan of correction that provided for the Laboratory Director to assume the responsibilities of technical supervisor. P. Ex. 32. Contrary to the assertions of Respondent, I find no statutory or regulatory requirement for Ms. Katz to sign a HCFA Form 209 in order for her to become technical supervisor for Petitioner. P. Ex. 5; CMS Reply Brief, at 9. (9)

Viewing the evidence in a light most favorable for the Petitioner, I conclude that prior to April 16, 1999 and until June 30, 1999, while Stephen Wechter was acting as technical consultant, Petitioner did not have a technical supervisor who met the qualifications for that position. Thus, there was a condition-level violation during this period. 42 C.F.R. 1447 - 1449.

After June 30, 1999 and until about January 2000, Ms. Ellen Katz was the technical supervisor for the laboratory. She was qualified for the position. Thus, there was no condition-level violation of 42 C.F.R. 1447 during this period.

In January 2000, Petitioner provided by policy that in the absence of a qualified technical supervisor, the laboratory director would fulfill that function. P. Ex. 32. This policy is specifically permitted by 42 C.F.R. 1449, so long as the laboratory director meets the qualifications for a technical supervisor. Petitioner has produced no evidence that a technical supervisor was hired after Ms. Katz and the evidence supports my conclusion, in light of Petitioner's adoption of its new policy, that the laboratory director would thereafter also be the technical supervisor. Thus, the laboratory had no technical supervisor when it had no laboratory director and a condition-level violation of 42 C.F.R. 1447 occurred.

b. Petitioner did not have a qualified "laboratory director" who fulfilled the duties and responsibilities of laboratory director, a violation of 42 C.F.R. 1441.

During the April 1999 survey, the laboratory director of Petitioner was William O. Janes, M.D. P. Ex. 1. On June 9, 1999, Dr. Janes, as "Medical Director," signed the plan of correction for deficiencies found on the April 1999 survey. By letter dated June 25, 1999, Respondent advised Dr. Janes that Petitioner's plan of correction was insufficient and that

Petitioner continued with the three condition-level violations identified on the original survey. P. Ex. 3. On July 8, 1999, Dr. Janes signed Petitioner's revised plan of correction. P. Ex. 4. Dr. Janes resigned as the laboratory director of Petitioner effective July 22, 1999. R. Ex. 4.

By letter dated July 26, 1999, Respondent advised Petitioner that its CLIA certificate would be suspended due to continuing condition-level violations and the additional condition-level violation due to the resignation of Dr. Janes as laboratory director. Respondent declared that immediate jeopardy existed. Respondent was advised by letter dated August 3, 1999 from counsel for Petitioner, that Petitioner had a new laboratory director, William Komaiko, M.D. R. Ex. 7; P. Ex. 5. Nevertheless, Respondent persisted in finding condition-level violations in (1) bacteriology (42 C.F.R. 493.1227); (2) laboratory technical supervisor (42 C.F.R. 493.1447) (10); and, (3) laboratory director (42 C.F.R. 493.1441). Respondent noted that Dr. Komaiko's qualifications and his assumption of the position and duties were not properly documented as of August 20, 1999, the date of the letter. By letter dated October 27, 1999, Dr. Komaiko advised Respondent that he did not assume duties as laboratory director until August 10, 1999. He further advised that he was hired as a consultant and agreed to assume laboratory director duties as part of his consulting contract on an interim basis. He terminated his relationship about September 20, 1999, when he delivered his report to Petitioner. R. Ex. 10. Pravin H. Patel, Ph.D. has submitted a letter that advises that he was never engaged as laboratory director for Petitioner as represented in Petitioner's plan of correction from February 2000 (P. Ex. 32), as his agreement to serve was contingent upon CLIA approval which was not forthcoming. R.R. Ex. 4. By letter dated April 4, 2000, Respondent advised Petitioner that Dr. Patel was not qualified to serve as laboratory director, but that he was qualified to serve as technical supervisor. P. Ex. 6. Stephen Wechter submitted a Form HCFA-209, dated May 24, 2000 and signed by James Bryant, M.D. which reflects Dr. Bryant as laboratory director and technical supervisor. P. Ex. 7. However, by letter dated June 5, 2000, Respondent advised Petitioner that Dr. Bryant was ineligible to serve as Petitioner's laboratory director as he was already listed as laboratory director for five other laboratories pursuant to 42 C.F.R. 493.1445(d). P.Ex. 8. Dr. Bryant resigned as director for one laboratory on July 25, 2000 and reported himself as laboratory director for Petitioner as of August 7, 2000. P.Ex. 9.

The foregoing facts are undisputed, (see Petitioner's Response, at 24) and viewing the undisputed facts in a light most favorable to Petitioner, I make the following factual conclusions. Dr. Janes was laboratory director from on and before April 16, 1999, the date of the survey, to July 22, 1999. From July 23, 1999 until August 10, 1999, Petitioner had no laboratory director. From August 10, 1999 to September 20, 1999, Dr. Komaiko was Petitioner's laboratory director. From September 20, 1999 to August 7, 2000, Petitioner had no laboratory director. Dr. Bryant became Petitioner's laboratory director on August 7, 2000, and absent evidence to the contrary, I presume that he continues in that role. Therefore, during the 16-month period from April 16, 1999 to August 7, 2000, Petitioner had no laboratory director for nearly 12 months. Petitioner has presented no evidence or argument to the contrary. Petitioner was in violation of the condition-level requirement established by 42 C.F.R. 1441 for each month it did not have a qualified laboratory director. I can conceive of no set of facts Petitioner could prove at trial that would lead to different conclusions more favorable to Petitioner.

3. Suspension of Petitioner's CLIA certificate is justified by the condition-level deficiencies that did exist at Petitioner's laboratory during the period April 16, 1999 to August 3, 1999.

Based on the foregoing discussion, I am satisfied that from April 16, 1999 to June 30, 1999, Petitioner had no qualified technical supervisor. From June 30, 1999 to January 2000, Petitioner had a qualified technical supervisor but after January 2000, Petitioner provided by policy that the technical supervisor responsibilities were to be fulfilled by its laboratory director. From September 20, 1999 to August 7, 2000, Petitioner had no laboratory director. From January 2000 to August 7, 2000, Petitioner had neither a qualified technical supervisor nor a qualified laboratory director. Conversely, the only time during the 16-month period from April 16, 1999 to August 7, 2000, that Petitioner met the condition-level requirements for laboratory director and technical supervisor, was from August 10, 1999 to September 20, 1999, during which period Ms. Katz was technical supervisor and Dr. Komaiko was laboratory director. During the entire period, August 10, 1999 to September 20, 1999, Petitioner's CLIA certificate was suspended.

The final issue is whether or not suspension and revocation are appropriate in this case given the two condition-level violations I have found. Petitioner makes no arguments regarding the propriety of the imposition of the principal sanction of suspension. My review is de novo on this issue.

The existence of either of the two condition-level deficiencies in this case is sufficient to support the principal sanction of suspension and revocation of Petitioner's CLIA certificate. The purpose of the Act is to ensure "the accuracy and reliability of laboratory tests, and hence the public health of all Americans." The absence of a qualified technical supervisor or a laboratory director creates the significant risk of inaccuracy and unreliability detrimental to the health of the American public. I can make this determination without the need to assess the reliability of the many other allegations of irregularities that surround the claims of this laboratory, its methods and operations - allegations that I note were raised by those Petitioner retained as laboratory directors. Petitioner has made no argument nor proffered any evidence that would lead to a different result.

CONCLUSION

For the foregoing reasons, summary judgment is entered affirming the determination of Respondent suspending Petitioner's CLIA certificate. Pursuant to 42 C.F.R. 493.1844(d)(4)(ii), Petitioner's CLIA certificate is revoked effective the date of this decision due to the prior CMS suspension of the certificate based upon a finding of immediate jeopardy. By operation of law, the owners and operators of Petitioner are prohibited from owning, operating, or directing a laboratory for two years pursuant to 42 U.S.C. 263a(i)(3) due to the revocation of the certification of the Petitioner. The two-year prohibition runs from the date of the revocation of the laboratory's certificate pursuant to 42 U.S.C. 263a(i)(3) - the date of this decision.

JUDGE
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Keith W. Sickendick

Administrative Law Judge

FOOTNOTES
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1. Effective July 5, 2001, the Health Care Finance Administration (HCFA) was renamed the Centers for Medicare and Medicaid Services (CMS). 66 Fed. Reg. 35437. Reference to either name applies to the same entity.

2. A much preferred practice is for subsequent exhibits to be numbered consecutively beginning with the number following that used on the last submitted exhibit, to avoid having multiple exhibits bearing the same exhibit number.

3. The complete Statement of Deficiencies has been admitted as part of P. Ex. 1.

4. It is interesting that Petitioner represented to CMS that Dr. Komaiko was hired as the laboratory director, curing one of its condition-level deficiencies. Dr. Komaiko, however, viewed himself only as a consultant retained to assist Petitioner to preserve its CLIA certificate. Of course, if Dr. Komiako was actually the laboratory director, R. Ex. 10 could be considered a vicarious admission of a party-opponent and/or an admission against interest.

5. The first three deficiencies were listed in the survey completed April 16, 1999 and are identified by Tags D4188, D6108, and D7000, respectively. P. Ex. 1. The fourth violation or deficiency arose when Petitioner's laboratory director, Dr. William O. Janes, resigned. CMS provided notice of the deficiency and of suspension of Petitioner's CLIA certificate based on a finding of "immediate jeopardy," by letter dated July 26, 1999. R. Ex. 6.

6. The CMS determination that "immediate jeopardy" existed is not subject to appeal or review. 42 C.F.R. 493.1844(c)(6).

7. I note here that on further analysis of the other condition level violations I might also have found no genuine issues for trial. However, because the two deficiencies addressed are serious enough to justify the remedy imposed by CMS and the eventual revocation of the Petitioner's CLIA certificate, I see no reason to spend further time or resources upon an analysis of this case.

8. I feel it necessary to repeat that I am not ruling that CMS cannot prove the existence of other condition-level deficiencies in this case. My ruling is that: (1) there is no disputed issue of material fact as to the existence of the condition-level deficiencies discussed; and, (2) the two condition-level deficiencies found are a sufficient basis for suspending and revoking Petitioner's CLIA certificate.

9. I can only wonder why, if CMS doubted that Ms. Katz was actually performing as technical supervisor, it did not further investigate by visiting the laboratory or at least calling Ms. Katz.

10. For the reasons already discussed, I do not accept for purposes of ruling on summary judgment that a condition-level violation continued in the technical supervision area after Ms. Katz was appointed to that position June 30, 1999.

CASE | DECISION | JUDGE | FOOTNOTES