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CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES

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


SUBJECT: Sonali Diagnostic Laboratory,

Petitioner,

DATE: January 17, 2006

             - v -

 

Centers for Medicare & Medicaid Services

 

Docket No. A-05-59
Civil Remedies CR1267
Decision No. 2008
DECISION
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FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE D
ECISION

Rustom Ali, Ph.D. appealed a January 13, 2005 decision by Administrative Law Judge (ALJ) Keith W. Sickendick. Sonali Diagnostic Laboratory, DAB CR1267 (ALJ Decision). The ALJ Decision upheld the actions by the Centers for Medicare & Medicaid Services (CMS) revoking the certificate issued to Dr. Ali's laboratory under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), and imposing a civil money penalty of $10,000 per day for the period August 4-6, 2001. The appealed actions were based on a review by the Arizona Department of Health (the State agency) finding deficiencies at Sonali Diagnostic Laboratory (Sonali) that posed immediate jeopardy to patient health and safety.

As explained below, we uphold the ALJ's conclusions that Sonali failed to comply with three CLIA conditions of participation and that CMS was authorized to impose the remedies at issue.

[Page 2] Applicable law and regulations

CLIA establishes requirements for all laboratories that perform clinical diagnostic tests on human specimens and provides for federal certification of such laboratories. Pub. L. No. 100-578, amending § 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a et seq. The purpose of CLIA requirements is to ensure the accuracy and reliability of laboratory tests, and hence the health and safety of those tested. See H.R. Rep. No. 899, 100th Cong. 2d Sess. 8 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3829.

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. (1) 42 C.F.R. §§ 493.5, 493.20. (2) Each condition represents a general requirement that must be met for certification. Standards are the specific components of the conditions, and failure to meet one or more standards may be so serious as to constitute a failure to comply with the conditions of certification. Edison Medical Laboratories, Inc., DAB No. 1713, at 2 (1999).

Failure by a laboratory to comply with even a single applicable condition may be grounds for suspension or revocation of the CLIA certificate. 42 C.F.R. § 493.1806. If a laboratory has condition-level deficiencies that do not pose immediate jeopardy, CMS may cancel the laboratory's approval to receive Medicare payment for its services, and may suspend, limit, or revoke the laboratory's CLIA certificate. If CMS instead imposes only alternative sanctions (which may include a directed plan of correction, a civil money penalty, and suspension of Medicare payment for tests in some or all specialties or subspecialties performed after the effective date of the sanction), and the [Page 3] laboratory does not correct the deficiencies within 12 months, CMS takes action to suspend, limit, or revoke its CLIA certificate. 42 C.F.R. §§ 493.1806, 493.1807, 493.1814. CMS may also take such action if, during a visit to the laboratory, it is found that the laboratory has not corrected its deficiencies. 42 C.F.R. § 493.1820.

If a laboratory is found to have condition-level deficiencies that pose immediate jeopardy, CMS requires the laboratory to take immediate action to remove the jeopardy and may impose one or more alternative sanctions. If the findings of a revisit indicate that a laboratory has not eliminated the immediate jeopardy, CMS may suspend or limit and later revoke the laboratory's CLIA certificate. 42 C.F.R. § 493.1812. "Immediate jeopardy" is defined as "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. . . ." 42 C.F.R. § 493.2.

A laboratory is entitled to a hearing before an ALJ to contest the imposition of CLIA remedies, and may request review of the ALJ's decision by the Departmental Appeals Board. The determination as to which alternative sanctions to impose, the amount of any CMP and the determination that a laboratory's deficiencies pose immediate jeopardy are not appealable. The CLIA regulations incorporate by reference the hearing procedures and the request for review provisions in 42 C.F.R. Part 498, subparts D and E. 42 C.F.R. § 493.1844.

Standard of Review

The standard of review on factual issues is whether the ALJ decision is supported by substantial evidence in the whole record. The standard of review on issues of law is whether the ALJ decision is erroneous. An error of procedure may be a basis for modifying, reversing or remanding an ALJ decision if the error is prejudicial. Board Guidelines - Appellate Review of Decisions of Administrative Law Judges in Cases under CLIA and Related Statutes, http://www.hhs.gov/dab/guidelines/clia.html.

Procedural Background

Dr. Ali was the owner and operator, as well as Laboratory Director, of Sonali, which was located in Lake Havasu, Arizona. Sonali was certified to perform both moderate and high complexity [Page 4] testing. A complaint survey completed by the State agency on January 25, 2001 found Sonali in violation of eight condition-level requirements. A revisit and recertification survey completed on May 31, 2001 found that Sonali remained in violation of seven CLIA conditions. By letter dated July 30, 2001, CMS notified Dr. Ali that Sonali's deficiencies posed immediate jeopardy to patient health and safety. CMS further advised Dr. Ali that it proposed imposing sanctions including a CMP, a directed plan of correction, suspension of Sonali's CLIA certificate, and cancellation of approval to receive Medicare payments. By letter dated August 17, 2001, CMS advised Dr. Ali that it had reviewed submissions received from him on August 7, August 10 and August 15, 2001 "and find no material evidence that would affect our sanction determination . . . ." CMS Ex. 17, at 1. CMS stated that it was therefore imposing the following sanctions: a CMP of $10,000 per day for the period August 4-6, 2001; a directed plan of correction that required Sonali to cease testing effective August 4, 2001; cancellation of approval to receive Medicare and Medicaid payments effective August 7, 2001; suspension of Sonali's CLIA certificate effective August 7, 2001; and revocation of Sonali's CLIA certificate effective September 28, 2001. (3) See ALJ Decision at 2-4. Dr. Ali and Sonali (Petitioners) timely requested a hearing by an ALJ, challenging the CMS determination. (4)

ANALYSIS
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The ALJ concluded that three condition-level violations had been established. The ALJ stated that he did not address the other alleged condition-level violations in the interest of judicial economy, noting that one condition-level violation is a sufficient basis for the revocation of Sonali's CLIA certificate.ALJ Decision at 10. The ALJ concluded that Petitioners violated [Page 5] 1) the requirement at section 493.803 for successful participation in proficiency testing; 2) the requirement at section 493.1101 for patient test management, moderate or high complexity; and 3) the requirement at section 493.1447 for a technical supervisor, high complexity testing. Id. at 5 (Conclusions of Law 2, 3 and 4). Below, we set out the factual bases and Petitioners' arguments on appeal regarding each of these conclusions and discuss why those arguments are unavailing. We then discuss Petitioners' "due process" arguments and why we agree with the ALJ's conclusion (Conclusion of Law 5) that those arguments have no merit.

We note preliminarily that Petitioners attached to their briefs in this appeal several documents that were not included in the exhibits admitted by the ALJ. (Several of the documents were submitted with Petitioners' post-hearing brief, however.) CMS objects to the submission of additional documents for review, citing section 498.86(a), which provides that the Board "may admit evidence into the record in addition to the evidence introduced at the ALJ hearing . . . , if the Board considers that the additional evidence is relevant and material to an issue before it." CMS Br. at 2. CMS also cites the Board's guidelines for review of an ALJ decision in this type of case, which state that the Board will admit additional evidence into the record only "if it considers the additional evidence to be relevant and material to an issue before it and if the proponent demonstrates good cause for not having produced the evidence during proceedings before the ALJ." Petitioners do not state clearly how the additional documents are relevant and material or explain why some of the documents were not produced during the proceedings before the ALJ. Accordingly, we are not admitting these documents into the formal record. In any event, nothing in the documents would affect our analysis or conclusions below.

I. Proficiency testing

Subparts H and I of Part 493 contain the requirements pertaining to proficiency testing. Section 493.801 requires, as a condition of certification, that each laboratory enroll in a proficiency testing (PT) program that is approved by HHS "for each of the specialties and subspecialties for which it seeks certification." An approved PT program may be offered by a private non-profit organization, a federal or state agency, or an entity acting as a designated agent for the state. Section 493.901. The PT program must distribute test samples to participating laboratories, evaluate and score the results of each testing event, and provide reports on individual laboratory performance in order to assure that laboratories meet minimum performance standards. Id. For [Page 6] most specialities, the PT program must provide a minimum of five samples per testing event and there must be at least three testing events at approximately equal intervals per year. Sections 493.821 - 493.865. Each laboratory must test the PT samples with its regular workload in the same manner as it tests patient specimens. Section 493.801(b). A laboratory must not engage in any inter-laboratory communications pertaining to the results of PT samples until after the date by which the laboratory must report proficiency testing results to the PT program. Id.

In addition, section 493.803(a) requires, as a condition of certification, that each laboratory holding a CLIA certificate to do tests of moderate and/or high complexity "must successfully participate" in an approved PT program for each "specialty, subspecialty, and analyte or test in which it is certified under CLIA." Section 493.2 defines "Unsuccessful participation in proficiency testing [to mean] any of the following: (1) Unsatisfactory performance for the same analyte in two consecutive or two out of three testing events. (2) Repeated unsatisfactory overall testing event scores for two consecutive or two out of three testing events for the same specialty or subspecialty." (5) Section 493.2 defines "Unsatisfactory proficiency testing performance [to mean] failure to attain the minimum satisfactory score for an analyte, test, subspecialty, or specialty for a testing event."

For the specialties of hematology and general chemistry, unsatisfactory performance is a failure to attain a score of 80 percent on a PT event. 42 C.F.R. §§ 493.841(a) and 493.851(a). Failure to participate in a testing event for either of these specialties (or failure to return testing results to the PT program within the specified time frame) is unsatisfactory performance and results in a score of 0 percent for that event. 42 C.F.R. §§ 493.841 and 493.851.

The ALJ concluded that Petitioners violated section 493.803. Conclusion of Law 2. This conclusion was based on his finding that Sonali did not successfully participate in PT. Specifically, the ALJ made the following findings of fact:

10. Petitioners were conducting hematology, which includes partial thromboplastin time (PTT), and chemistry, which includes testing for chloride, creatinine, sodium, and total protein, during the fall [Page 7] of 2000 and the spring of 2001, in which these periods were included within the third proficiency test (PT) event of 2000 and the first PT event of 2001. (6)

11. Petitioners' PT scores for PTT were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 40 percent, respectively.

12. Petitioners' PT scores for creatinine were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 20 percent, respectively.

13. Petitioners' PT scores for total protein were unsatisfactory for the third event of 2000 and the first event of 2001 with scores of 0 and 60 percent respectively.

ALJ Decision at 5. The ALJ further found that Sonali received a score of 0 percent for the third event of 2000 because it did not timely submit a test report. Id. at 12, citing Tr. 598-99.

According to the ALJ Decision, Petitioners did not dispute these facts but argued instead that Sonali passed "off-schedule proficiency testing" in PTT as well as a "self-evaluation" for creatinine and protein, and that these results should excuse Sonali's failing PT scores. ALJ Decision at 13. The ALJ stated, however, that "[t]he regulations do not permit CMS to accept a 'self-evaluation' process in lieu of satisfactory participation in an approved PT program that includes test events for hematology and general chemistry. See 42 C.F.R. §§ 493.801, 493,841, 493,851, and 493.1236." Id. The ALJ also stated that Dr. Ali suggested "that Surveyor Diane Eckles represented to him that self-evaluation might be considered sufficient;" the ALJ stated, however, that "Ms. Eckles' testimony clearly is at odds with Petitioner Ali's representation." Id. at 13, citing Tr. at 525-526 and 366. In addition, the ALJ noted that, under section 493.803(c), remedial action does not excuse unsuccessful PT performance but merely allows CMS, under certain circumstances not present here, to direct the laboratory to train personnel or obtain outside technical assistance, or both, in lieu of imposing a principal or alternative sanction. Id. In the course of his analysis, the ALJ stated that there is "no dispute that [Page 8] Petitioners failed to achieve 80 percent for hematology and general chemistry after the laboratory participated in the first event of 2001." ALJ Decision at 12.

Petitioners take exception to the ALJ's conclusion that Sonali violated the condition-level requirement in section 493.803 for successful participation in PT. Specifically, Petitioners maintain that the ALJ erred in finding that Sonali failed to achieve 80 percent for hematology and general chemistry in the first test event of 2001 since Sonali's overall score for both of these specialties was 93 percent in 2001. Petitioners argue that the surveyors found that Sonali had violations only with respect to individual analytes in these specialties and that this did not constitute a condition-level violation. Petitioners also dispute that Sonali had unsatisfactory performance for two consecutive testing events, arguing that Sonali's failing scores of 0 percent for some analytes for the third testing event of 2000 were just a "technical failure." P. Br. at 27. According to Petitioners, moreover, Surveyor Eckles advised Dr. Ali that the State agency would accept Sonali's "self-evaluation" instead of the PT results. Petitioners allege that, on self-evaluation, Sonali scored 80 percent or more in all analytes except PTT, for which it then "performed remedial action." Petitioners also maintain that the regulations authorize the State agency to accept such self-evaluation, citing section 493.1236 (2003). Petitioners also point to the statement in CMS's "Interpretive Guidelines" that "[c]areful review of PT performance reports and other available information should always be performed to determine whether the PT results truly represent failed PT." According to Petitioners, this shows that the State agency has authority to accept self-evaluation in lieu of PT results. (7) Petitioners assert, moreover, that the State agency accepted remedial action for other analytes in 1999 and 2000. P. Br. at 24-29.

All of these arguments lack merit. First, as indicated above, section 493.803 requires, as a condition of certification, that a [Page 9] laboratory successfully participate in an approved PT program "for each specialty, subspecialty, analyte or test in which the laboratory is certified under CLIA." (Emphasis added.) "Unsuccessful participation" is defined in section 493.2 as including "unsatisfactory performance for the same analyte in two consecutive or two out of three testing events." (Emphasis added.) Thus, there was no error in finding a condition-level violation under section 493.803 based on the State agency's finding that Sonali had unsatisfactory performance with respect to individual analytes. Moreover, while the ALJ listed the individual analytes by specialty and viewed it as undisputed that Petitioners "failed to achieve 80% for hematology and general chemistry," he did make findings regarding the individual analytes at issue. No finding regarding the test results for a specialty was necessary in order to find unsatisfactory participation.

Second, in arguing that failing scores based on Sonali's failure to timely submit test reports for the third test event of 2000 were merely technical failures, Petitioners ignore the clear provisions of the regulations that "[f]ailure to return proficiency testing results to the proficiency testing program within the time frame specified by the program is unsatisfactory performance and results in a score of 0 for the testing event." See 42 C.F.R. §§ 493.841(d) and 493.851(d). Returning testing results by the due date is an important aspect of a PT program, not merely a technical requirement, since laboratories may not share test results until after that date. Section 493.801(b)(3). Also, as CMS points out, Petitioners' inability to comply with such important deadlines, as well as a continuing lack of success with PT, raises serious concerns about the laboratory's competency.

Third, contrary to what Petitioners argue, neither the regulations nor the guidance issued by CMS authorize it to accept a laboratory's self-evaluation in lieu of failing test scores. (8) Section 493.803(b) states that, "[e]xcept as specified in [Page 10] paragraph (c) of this section," CMS must impose sanctions on a laboratory that fails to participate successfully in PT. Paragraph (c) does not require the imposition of alternative or principal sanctions if a laboratory provides "satisfactory evidence that it has taken steps to correct the problem identified by the unsuccessful proficiency testing performance," but this exception is not available where, as here, there is immediate jeopardy to patient health and safety or the laboratory has a poor compliance history. The relevant part of section 493.1236, which Petitioners cite instead, merely requires that a laboratory verify the accuracy of its tests if it receives a 0 percent PT score for nonparticipation or late return of results. The heading under which sections 493.1230 through 493.1239 appear - General Laboratory Systems - also suggests that these regulations merely impose internal monitoring responsibilities on laboratories. Further, we see nothing in the history of the regulations that indicates that the laboratory's results on verification may be substituted for a failing PT score.

CMS's interpretive guidelines for section 493.803 also provide no support for Petitioners' position. Read in context, the quoted statement appears to require surveyors to determine whether a laboratory's failing scores may have resulted from "a PT program data input error or other factors beyond the laboratory's control . . . ." Even if that were the case here (which it is not), the guidelines do not authorize a laboratory to substitute the results of a self-evaluation for failing PT scores but rather state that "[o]nly the PT program has the capability to correct scores." Accordingly, even if Surveyor Eckles had advised Petitioners that the State agency would accept Sonali's self-evaluation in lieu of the failing PT scores, (9) Petitioners could not reasonably have relied on that advice since it was inconsistent with the regulations. Moreover, Petitioners merely allege that they lost the opportunity to take remedial action because of their reliance on Surveyor Eckles' purported advice. This does not constitute detrimental reliance since the basis for the deficiency is the failing PT scores themselves, not the lack of remedial action.

Petitioners' argument that the State agency accepted remedial action in lieu of failing test scores in prior years is not supported by the State agency letters they cite. Each of the letters notifies Dr. Ali of condition-level deficiencies based on [Page 11] unsuccessful PT performance for certain analytes and states that "[f]acilities that do not meet a Condition of CLIA may not be certified for participation in the CLIA program." CMS Exs. 21 - 23. Petitioners presumably rely on the following two sentences, which state that "[y]ou must take steps to bring these Conditions into compliance immediately" and that section 493.1836 "require[s] that for any unsuccessful testing event, the laboratory must undertake appropriate training and employ the technical assistance necessary to correct problems associated with the PT failure." This language merely states the laboratory's responsibility to correct its noncompliance; it does not indicate that the finding of a condition-level deficiency will be withdrawn if remedial action is taken. Although CMS did not suspend or revoke Sonali's CLIA certificate in a prior year based on this finding, this does not mean that CMS could not do so based on a similar finding in a later survey.

Thus, we affirm the ALJ's conclusions regarding Sonali's failure to successfully participate in PT.

II. Patient Test Management

Section 493.1101 requires, as a condition of certification, that each laboratory performing moderate complexity and/or high complexity testing-

must employ and maintain a system that provides for proper patient preparation; proper specimen collection, identification, preservation, transportation, and processing; and accurate reporting. This system must assure optimum patient specimen integrity and positive identification throughout the preanalytic (pre-testing), analytic (testing), and postanalytic (post-testing) processes and must meet the standards as they apply to the testing performed.

The ALJ concluded that Petitioners violated this condition by violating the standards at sections 493.1107(d), 493.1109(a) and 493.1109(b). Conclusion of Law 3. We discuss the ALJ's findings and Petitioners' exceptions with respect to each of these sections in turn.

Section 493.1107(d). Section 493.1107(d) provides, "The record system must include the records and dates of all specimen testing, including the identity of the personnel who performed the test(s), which are necessary to assure proper identification and accurate reporting of patient test results." The ALJ found that "Petitioners failed to accurately report times in its final [Page 12] reports." Finding of Fact 14. The ALJ based this finding on the State agency's finding from the May survey that Petitioners had not corrected four patients' test reports which the January survey found showed that the laboratory received the specimen after the laboratory reported on the test results. Specifically, the State agency found that each report showed that the specimen was not received until 4:00 p.m. on November 14, 2000, while also showing that the laboratory had already reported the test results for these specimens between 1:22 p.m. and 1:37 p.m. on the same date. ALJ Decision at 14; CMS Ex. 6, at 4-5. Thus, Sonali's records indicate that it reported test results for which it had not yet received the specimens to be tested, which is impossible. The information, therefore, is clearly inaccurate.

Petitioners do not deny the inaccuracy of the information. However, they claim that Dr. Ali corrected these reports and that the surveyor saw one of the corrected reports at the May survey. P. Br. at 33-34, citing P. Ex. 7. Petitioners also argue that the regulations do not require that a laboratory report show the time the test results were reported and, therefore, that there can be no regulatory violation based on a discrepancy between the time the report shows the specimen was received and the time the report shows the results were reported. (Petitioners refer to the time the test results were reported as the time the report was printed.) In support of this argument, Petitioners cite a prior ALJ decision, Kaulson Laboratories, Inc., DAB CR642 (2000), which found a violation of the regulation where the date of reporting preceded the date of testing, with no reference to the time of reporting. (10) Petitioners also dispute the ALJ's statement (at ALJ Decision at 15) that this type of error was "systemic," pointing out that the errors occurred in only four of 43 reports, all of the errors occurred on a single day, and the difference between the times the specimen was received and the test results were reported was only about two and one-half hours in each case. P. Br. at 34.

Petitioners' arguments have no merit. It is irrelevant that Petitioners corrected the reports if they were corrected after the May survey. There is no evidence that the corrected reports in Petitioners Exhibit 7 were provided to the State agency by the [Page 13] time of the May survey. Surveyor Apt testified that the only reports she saw at the May survey were the ones in CMS Exhibit 8 and that for three of the four patients in question these reports were unchanged from those she saw in January. Tr. at 120, 124, 154. Ms. Apt acknowledged that the report she saw at the May survey for the fourth patient had been changed, but stated that she did not consider the report to be corrected since there was no indication on the report itself that it had been corrected. Tr. at 122, 154-155. (11) Moreover, the report she said she saw at the May survey is not the same as either of the reports for this patient in Petitioners Exhibit 7, which show an additional change (in the date the laboratory reported).

Petitioners' argument that there is no violation because, in Petitioners' view, section 493.1107(d) does not require that a report show the time of day it was printed misses the point. As noted above, section 493.1107(d) requires a record system that includes "records and dates of all specimen testing ... which are necessary to assure proper identification and accurate reporting of patient test results." Regardless of whether the regulation itself requires the laboratory to record the times the test results were reported (an issue we need not decide here), Petitioners chose to record that information, presumably because they deemed the times "necessary to assure proper identification and accurate reporting ... ." The question, then, is not whether Petitioners were required to record the times but, rather, whether the information they chose to record was accurate so as to assure accurate reporting. Petitioners do not deny that the information was inaccurate, and clearly it was since it indicates that the test results were reported before Petitioners had even received the specimens to be tested. Obviously a laboratory cannot "assure proper identification and accurate reporting of patient test results," as required by section 493.1107(d), by reporting that it got results before it received the specimens.

Kaulson Laboratories, Inc., the ALJ decision cited by Petitioners, is irrelevant since that decision involved a different regulation (section 493.1109(a)), and the parties there [Page 14] did not raise any issue as to whether an error in the time rather than date could be the basis for a violation. (12)

The fact that the surveyor observed only errors from one day does not mean even that the types of errors in these reports were not "systemic." The ALJ reasonably found that the problem was systemic based on Petitioners' admission that there was a computer programming problem. See ALJ Decision at 15, citing CMS Ex. 6, at 6. Moreover, errors in four (or even three) reports out of 43 evidence a problem more serious than just an inadvertent and random data entry error.

Section 493.1109(a). Section 493.1109(a) provides that "[t]he laboratory must have adequate systems in place to report results in a timely, accurate and reliable manner." The ALJ found that "Petitioners failed to assure that test reports were accurate and reliable." Finding of Fact 15. The ALJ based this finding on the State agency's finding that five reports reviewed in the May survey had results that could not be verified, although Petitioners had issued corrected reports in response to a similar finding in the January survey regarding four other reports. ALJ Decision at 15; CMS Ex. 6, at 6-8. The State agency found that one of the five reports showed an assayed value for calcium of 9 although the instrument printout showed that the test result was actually 4.3. CMS Ex. 6, at 8. The State agency also found that four reports on albumin tests that were performed by a reference laboratory gave Sonali's reference range for albumin although the reference laboratory had a different reference range for this analyte. Id.

Petitioners assert that there was no error in the reported calcium value because it corresponded to the results of a repeated test, or "rerun," of the specimen. The survey report indicates that Dr. Ali made the same claim at the time of the survey but states that "there was no documentation that the test was re-run." CMS Ex. 6, at 8. According to Petitioners, however, documentation that the test was re-run existed at the time of the survey but the surveyor never asked for it, and [Page 15] Petitioners were unaware of the need to produce it until Sonali was cited for a violation on this basis. Petitioners argue that the regulation requires only that a laboratory "produce the documents in reasonable time," and that they satisfied this requirement by providing the documentation at the hearing (as Petitioner Exhibit 24). P. Br. at 35. Petitioners also state that the surveyors failed to produce worksheets that would have shown whether the surveyors asked for the documentation. Id. (13)

Petitioners' arguments are unavailing. Contrary to what Petitioners argue, the applicable regulations require that "[a] laboratory must have all records and data accessible and retrievable within a reasonable time frame during the course of the inspection." 42 C.F.R. § 493.1773(c). Similarly, the preamble to the final rule states that "[t]he laboratory must be capable of retrieving records in a timely fashion and making these records available when requested to do so during the inspection process." 57 Fed. Reg. 7002, 7055 (Feb. 28, 1992). Indeed, the State agency notified Petitioners in advance of the survey of the need to have "materials/information," including test reports, "accessible and retrievable . . . as per the CLIA regulations[.]" P. Ex. 33. Thus, Petitioners should have known that they needed to document at the time of the survey that the calcium value on the laboratory report corresponded to the results of the rerun. Moreover, although Petitioners appear to argue in their reply brief that they were unaware at the time of the survey that the calcium value was being questioned, the surveyor testified at the hearing that she asked if there was a rerun of the specimen in question as well as for documentation of the rerun, and Dr. Ali's testimony that she did not ask for documentation of the rerun does not undermine her testimony that she asked about a rerun. See Reply Br. at 64; Tr. at 162, 270-271 and 553. Petitioners therefore knew at the time of the [Page 16] survey that the surveyor was questioning the reported calcium value and, regardless of whether the surveyor specifically requested documentation for a rerun, Petitioners' failure to provide it at the time calls into question the documentation on which Petitioners now rely.

Petitioners also argue that this single finding was not sufficient to constitute a violation of the standard. As stated above, however, nothing in the regulations indicates that violation of a standard cannot be based on a single finding. In any event, the ALJ also based his conclusion regarding this standard on an additional State agency finding that Petitioners did not dispute on appeal - that Petitioners failed to provide the correct reference range on four reports on albumin tests. (14)

Section 493.1109(b). Section 493.1109(b) provides that "[t]he test report must indicate the name and address of the laboratory location at which the test was performed, the test performed, the test result and, if applicable, the units of measurement." The ALJ found that "Petitioners failed to disclose on reports the location of the reference laboratory that did the testing" and also that "Petitioners issued reports that failed to include the name and address of the reference laboratory where tests were actually performed." Findings of Fact 16 and 17. The ALJ based these findings on the State agency's finding from the May survey that Petitioners had not corrected final patient test reports for 13 patients reviewed in the January survey. According to the survey report, the test reports either failed to indicate that the tests were performed by another laboratory or indicated that the tests were performed by another laboratory but failed to give that laboratory's address. ALJ Decision at 16; CMS Ex. 6, at 8-10.

Petitioners argue that section 493.1109(b) applies only where a laboratory has multiple sites, not where a laboratory refers a specimen to a reference laboratory for tests. P. Br. at 37, citing interpretive guidelines for section 493.1109(b). Petitioners argue further that the regulation at section [Page 17] 493.1111, which pertains specifically to the referral of specimens, does not require that the referring laboratory's final report include the name and address of the reference laboratory. Petitioners contend that Sonali satisfied the requirements of section 493.1111 by noting on each of the reports in question that the test was "sent out" and by giving the physician who requested the test a copy of the reference laboratory's report. Petitioners also contend that the surveyors indicated in January only that the name of the reference laboratory, rather than both the name and address, was required. (15) Additionally, Petitioners assert that since the State agency did not provide specific information regarding the reports for each of the 13 patients, e.g., date, patient name, and test, there was insufficient information concerning the basis for the finding of a violation under section 493.1109(b) to enable Petitioners to respond. P. Br. at 36-38.

Petitioners' arguments are not persuasive. On its face, section 493.1109(b) requires the test report to indicate the name and address of the laboratory location at which the test was performed. Nothing in the requirement limits its application to a laboratory with multiple locations. Moreover, requiring this information for all laboratories is consistent with the underlying purpose of the requirement, which is to enable "the individual requesting and/or utilizing the test results to require additional test information to aid in result interpretation and treatment of patients ." 57 Fed. Reg. 7002, 7055-7056 (Feb. 28, 1992). (16) The fact that section 493.1111 [Page 18] pertains specifically to referral of specimens does not mean that no other provision applies to the situation where specimens are referred. We see no conflict between the requirement in section 493.1111 that the referring laboratory notify the person who orders a test of the name and address of each laboratory location at which a test was performed and reading section 493.1109(b) to require that the referring laboratory's final report include the name and address of any reference laboratory that performed a test.

Moreover, the limited excerpt that Petitioners quote from the interpretive guidelines for section 493.1109(b) is not sufficient to determine their meaning. (17) The current guidelines for the amended regulations (which redesignated section 493.1109(b) as section 493.1291(c)(2)) indicate that the regulation requires the name and address of a reference laboratory.

In addition, there is no basis for Petitioners' suggestion that in the January survey, the surveyors interpreted section 493.1109(b) as requiring that the final patient report include only the name of the reference laboratory. The survey report states in part that "it was determined that the laboratory failed to include the location of the reference laboratory where the tests were performed on 13 of the 43 test reports reviewed . . . ." CMS Ex. 2, at 6. This clearly indicates that the surveyors expected Sonali's reports to include the location (address) as well as the name of the reference laboratory. Even if only the name were required, Petitioners would be in violation of section 493.1109(b) since some of the reports contained no indication at all that the tests were performed by another laboratory.

Petitioners also did not show that the information provided by CMS concerning the reports was insufficient to enable Petitioners to respond. The survey report identifies the medical record number associated with each of the reports in question and states that the reports included tests of three analytes that Sonali was not permitted to test (albumin, magnesium, and creatine kinase). In addition, CMS provided copies of five of the reports in [Page 19] question as hearing exhibits. See Tr. at 168-170, 172, 174; CMS Ex. 9, at 1, 3; CMS Ex. 10, at 1, 3; CMS Ex. 14, at 5. (18)

Petitioners also contend that even if Sonali violated the standards at 493.1107 and 493.1109, this was not sufficient to establish that it violated the condition relating to patient test management. P. Br. at 39. As indicated above, failure to meet one or more standards may be so serious as to constitute a failure to comply with a condition of certification. The ALJ concluded that the standard-level violations under sections 493.1107 and 493.1109 (two of the five standards comprising the condition at section 493.1101) constituted a condition-level deficiency based on a presumption (which Petitioner failed to rebut) that the issuance of erroneous and faulty test reports in violation of the regulations gives rise to potential patient harm. See ALJ Decision at 15-17. We see no error in this conclusion.

III. Technical Supervisor

Section 493.1447 requires, as a condition of certification, that a laboratory performing high complexity testing "must have a technical supervisor who meets the qualification requirements of § 493.1449 of this subpart . . . ." Section 493.1449 provides in pertinent part that a laboratory "must employ one or more individuals who are qualified by education and either training or experience to provide technical supervision for each of the specialties and subspecialties of service in which the laboratory performs high complexity tests or procedures." In a laboratory that performs tests in the subspecialty of bacteriology, the minimum requirements for a technical supervisor are that this person:

(i) Have earned a bachelor's degree in a chemical, physical, or biological science or medical technology from an accredited institution; and
(ii) Have at least 4 years of laboratory training or experience, or both, in high complexity testing within the specialty of microbiology with a minimum of 6 months [Page 20] experience in high complexity testing within the subspecialty of bacteriology.

Section 493.1149(c)(5). The ALJ concluded that "Petitioners violated the condition-level requirement of 42 C.F.R. § 493.1447, technical supervisor, high complexity testing, Tag D6108." Conclusion of Law 4. The ALJ Decision states that the report from the May survey found a violation on the ground that "the person designated by the Petitioner to be the technical supervisor in bacteriology" did not have either the requisite education or experience. ALJ Decision at 18, citing CMS Ex. 6, at 20-22. The ALJ Decision notes that CMS stated in an August 17, 2001 letter to Petitioners that "Petitioners' technical supervisor's educational background had been clarified, but Petitioner had failed to document her laboratory experience." Id., citing CMS Ex. 17, at 3. It is unclear whether this letter refers to Veronica Canlas, who is identified as the current technical supervisor in Petitioners' plan of correction for the May survey or to Felsie Longares, who is identified as the new technical supervisor on Petitioners' plans of correction for the January survey. (19) The ALJ found that neither Ms. Longares nor Ms. Canlas had the requisite experience. (20) Finding of Fact 19. In particular, the ALJ found that, although Ms. Canlas' resume shows that she had been employed as a medical technologist and as a medical technologist/microbiologist-

[t]he general description of duties for both Ms. Canlas' jobs does not provide sufficient detail to determine what her actual level of responsibility was in either job. P. Ex. 18, at 13. There is no evidence, such as a performance evaluation or other statement from Ms. Canlas' supervisors or employers, to shed light upon her actual level of responsibilities, her performance, or competence. In the case of Ms. Longares, her resume reflects a consistent work history in various positions with the title Medical Technologist, but does not provide sufficient detail to determine her level of responsibility. P. Ex. 18, at 4-5; Tr. 638-41. There [Page 21] is also no evidence such as performance evaluations or a supervisor or employers statement to indicate Ms. Longares' level of responsibility, performance, or competence.

ALJ Decision at 20.

On appeal, Petitioners take the position that only Ms. Longares' qualifications are relevant since Ms. Longares "was the Technical Supervisor all along" and Ms. Canlas "was never Technical Supervisor." P. Br. at 40, citing Tr. at 638-641. (21) Petitioners assert that the basis for the deficiency finding in the May survey was solely that an education equivalency service had not reviewed documentation regarding Ms. Longares' foreign degree to determine whether it met the minimum education requirements in section 493.1449(c)(5). Petitioners argue that there is no deficiency since they subsequently provided a certification of equivalence for her. Petitioners also argue that the State agency and CMS had accepted Ms. Longares' experience as meeting the requirements of the regulation. Petitioners argue in addition that the requirements of section 493.1449(c)(5) were not the basis for the deficiency citation in the report on the May survey and that the ALJ therefore "create[d] a new deficiency" when he relied on section 493.1449(c)(5) to find a deficiency under section 493.1447. Id. at 41-42.

Petitioners' arguments have no merit. There is no "new deficiency" citation since section 493.1447 expressly incorporates the standard at section 493.1449 and the survey report refers to section 493.1449 in describing the condition at section 493.1447. In finding that Sonali violated that condition, the ALJ correctly observed that the report from the May survey found not only that Petitioners had not established that the designated technical supervisor met the minimum education requirements in section 493.1449(c)(5), but also that Petitioners had not established that this person had the experience required by that regulation. Contrary to what Petitioners argue, moreover, the evidence does not show that the State agency or CMS had accepted Ms. Longares' experience as meeting the regulatory requirement since CMS specifically stated in its August 17, 2001 letter that Petitioners had not documented [Page 22] the technical supervisor's laboratory experience. Indeed, Ms. Longares' resume does not mention any experience in high complexity testing within the subspecialty of bacteriology. P. Ex. 18, at 4-5. (22) Ms. Canlas' resume shows that she worked at a hospital for more than a decade and performed "all bacteriological tests" when she worked in the Bacteriology Unit; however, it is unclear from the resume whether she worked in that unit for the requisite six months. P. Ex. 18, at 13. In any event, as indicated above, Petitioners do not rely on Ms. Canlas' qualifications to show that Sonali complied with the condition for technical supervisor.

Thus, the ALJ did not err in concluding that Petitioners were out of compliance with the condition for technical supervisor at 493.1447.

IV. Procedural Challenges

Petitioners made numerous arguments before the ALJ "challenging the procedural process followed in the [surveys], the imposition of remedies, and the hearing process." ALJ Decision at 20. The ALJ concluded that "Petitioners' due process arguments have no merit." Conclusion of Law 5. We affirm and adopt the ALJ's conclusion, based on his analysis of the arguments he specifically addressed and on our analysis of those arguments that Petitioners claim he did not address. Petitioners were not represented by counsel, and some of their arguments before the ALJ (as well as on appeal) were not clearly articulated, differentiated, or fully developed. As indicated below, we also conclude that Petitioners' procedural challenges to the ALJ Decision have no merit.

o Petitioners argue that CMS was not permitted to impose alternative and principal sanctions based on the same condition-level violations. P. Br. at 44-45, 51. The regulations clearly authorize CMS to do just that. Section 493.1806(c) provides that CMS "may impose one or more . . . alternative sanctions in lieu of or in addition to imposing a principal sanction . . . ." Similarly, section 493.2 defines the term "Alternative sanctions" as "sanctions that may be imposed in lieu of or in addition to principal sanctions." (Emphases added.) Section 493.1812, which [Page 23] describes the rules that apply if a laboratory's deficiencies pose immediate jeopardy, does not indicate otherwise. Subsection (a) provides that when CMS requires a laboratory to take immediate action to remove the jeopardy, CMS "may impose one or more alternative sanctions to help bring the laboratory into compliance." Subsection (b) requires the suspension or limitation (and eventual revocation) of the laboratory's CLIA certificate if the laboratory has not eliminated the jeopardy. This clearly contemplates the imposition of principal sanctions based on the same deficiency or deficiencies for which alternative sanctions have been imposed.

o Petitioners argue that CMS failed to give them 10 days to respond to the July 30, 2001 letter advising them of the noncompliance and imposition of sanctions CMS would take action to impose. P. Br. at 47. The applicable regulations require that CMS give a laboratory at least 10 days to respond to CMS's written notice of the condition-level noncompliance that it has identified and of the sanction or sanctions that it proposes to impose. 42 C.F.R. § 493.1810(a) and (b). CMS's July 30, 2001 letter specifically stated that Petitioners had 10 days to respond. CMS Ex. 16, at 6. Petitioners' own conduct shows that they received the required notice because they responded by submitting the materials received by CMS on August 7, 10 and 15, 2001. (23) Thus, Petitioners' argument has no merit.

o Petitioners argue that CMS imposed sanctions within four days of the July 30 notice rather than the five days provided by section 493.1810(c) for cases where CMS finds immediate jeopardy. P. Br. at 45, 47. Petitioners' argument clearly has no basis since the earliest effective date of the sanctions specified in CMS's July 30 notice was August 4, 2001, five days after the date of the notice. CMS Ex. 16, at 4-5.

o Petitioners argue that they were not notified, as required by section 493.1810, of the finding of a violation of the condition for successful participation in PT until sanctions were imposed. P. Br. at 48. According to Petitioners, neither the surveyor nor the State agency advised them of this finding, and CMS's notice of the imposition of sanctions did not include section 493.803 [Page 24] in a list of six conditions that had been violated. There is no requirement in section 493.1810 that the surveyor or the State agency advise the laboratory of the results of a survey, however. (24) Moreover, CMS's July 30, 2001 letter regarding the imposition of sanctions gave the notice required by section 493.1810. That letter states that "review of the latest proficiency testing results" showed that Sonali had had unsuccessful PT results "through May 2001." CMS Ex. 16, at 7. The letter further states that the sanctions would be based in part on "your laboratory's repeated failure to sustain Condition-level compliance in proficiency testing . . . ." Id. at 4. Petitioners' focus on the list of six conditions is misplaced. The letter indicates that the list of six conditions refers only to the conditions with which Sonali had been found out of compliance at both the January and May surveys. The letter also includes a table showing that Sonali had been found out of compliance with the condition in section 493.801 for enrollment in a PT program at the January survey and with the condition in section 493.803 for successful participation in PT at the May survey. Id. at 2. The noncompliance with section 493.801 found at the January survey arguably constituted noncompliance with section 493.803 as well, so that CMS should have listed section 493.803 as a seventh condition with which Sonali was out of compliance at both surveys. Nevertheless, Petitioners had notice from the letter as a whole that the sanctions were based on violations of all seven conditions.

[Page 25] o Petitioners argue that CMS acted inconsistently with the regulations by improperly relying on Sonali's compliance history even though Sonali had no "repeat deficiencies." That term, as Petitioners point out, means that the same deficiency was found in three consecutive inspections. 57 Fed. Reg. 7218, 7221 (Feb. 28, 1992). While the existence of repeat deficiencies requires CMS to take certain actions under the regulations, CMS may take the actions it took here regardless of whether repeat deficiencies exist. Moreover, while the existence of repeat deficiencies is a factor CMS considers in determining the amount of a CMP, CMS may also consider the "laboratory's overall compliance history." 42 C.F.R. § 1834(d). Thus, CMS properly considered compliance history in determining the amount of the CMP.

o Petitioners argue that the CMP imposed effective August 4, 2001 was not proper because Sonali had ceased testing on the same day, as required by the directed plan of correction. Petitioners assert that, in a case involving another laboratory operated by Dr. Ali, the ALJ held that a CMP imposed under the same circumstances was not lawfully imposed. P. Br. at 51-53, citing Rustom Ali, Ph.D., Operator of Scottsdale Medical Laboratory, DAB CR1280 (February 18, 2005). That decision states in relevant part:

CMS ordered that Petitioners cease all testing, effective February 23, 2002. CMS Ex. 28, at 2. Because Petitioners had to cease all testing effective February 23, 2002, and because CMS was unwilling to receive an allegation of compliance and plan of correction from Petitioners (CMS Ex. 28, at 1), a question arises as to how a CMP imposed effective February 23, 2002, served any of the remedial purposes set forth at 42 C.F.R. § 493.1804(a). The CMP proposed by CMS was not required by the regulation, but was a matter within CMS discretion based on the existence of condition-level deficiencies (42 C.F.R. § 493.1834(c)). Although CMS is authorized to impose a CMP when condition-level deficiencies are found, the CMP must serve a remedial purpose. CMS cannot credibly claim that this CMP was related to the remedial purpose of motivating Petitioners to come into and remain in compliance with CLIA requirements (42 C.F.R. § 493.1804(a)(3)). As to the remedial purposes set forth at 42 C.F.R. § 493.1804(a)(1) and (2), these purposes were accomplished by ordering Petitioners to cease testing. Accordingly, I conclude that the imposition of a CMP did not have a [Page 26] remedial purpose and therefore may not lawfully be imposed or approved in this case.

Scottsdale, at 22-23.

Since review of the ALJ decision in Scottsdale is currently pending before the Board, we cannot address the merits of that decision here. However, we do note that, contrary to what Petitioners assert, Scottsdale is distinguishable on its facts from the instant case. The ALJ there found that "CMS was unwilling to receive an allegation of compliance and plan of correction from Petitioners." Here, in contrast, CMS advised Petitioners that they had 10 days to submit additional documentation following the July 30, 2001 notice of sanctions that included a CMP. Since Petitioners here had an opportunity for corrective action even after the August 4, 2001 effective date of the directed plan of correction requiring Sonali to cease testing, the CMP for August 4 through 6 served a remedial purpose by giving Petitioners an additional incentive to take such action.

o Petitioners argue that CMS does not have authority to issue a cease testing order in the context of a directed plan of correction, and instead may stop testing only through a principal sanction such as a suspension. According to Petitioners, the ALJ "implied" that the requirement in CMS's directed plan of correction that Sonali cease testing effective August 4, 2001 was "essentially the same as [a] suspension.'" P. Br. at 46. (25) Petitioners maintain that the ALJ therefore erred by upholding imposition of a CMP effective that date because the cease testing order was tantamount to an unofficial suspension.

Petitioners are correct that CMS could not properly have imposed a CMP if it had suspended Sonali on August 4 since a CMP may not accrue past the date that a suspension takes effect. 42 C.F.R. § 493.1834(f)(2). CMS argues, however, that it properly ordered Sonali to cease testing as part of a directed plan of correction. Section 493.1832(b)(1)(ii) provides that when imposing a directed plan of correction, CMS "[d]irects the laboratory to take specific corrective action within specific time frames in order to achieve compliance[.]" CMS argues that this provision gives it discretion to determine what constitutes corrective action [Page 27] that will assist the laboratory to achieve compliance. CMS says that it determined that Sonali "could potentially have avoided the suspension of its CLIA certificate" without patient testing by "removing the immediate jeopardy conditions" (26) and that a cease testing order would facilitate Sonali's ability to do this. CMS Br. at 30. CMS's imposition of a cease testing order does raise questions about how this is different from a suspension. If imposition of a cease testing order were an attempt to circumvent the regulatory requirements on when a suspension may be effective, this could raise a legitimate concern about CMS's actions. This was not the case here, however. Since a suspension could have been effective August 4, Petitioners were in the same position regarding their ability to test (i.e., they were no longer permitted to test) as if a suspension, rather than the cease testing order, had been effective on that date. While use of a cease testing order rather than a suspension permitted the imposition of a CMP for a three-day period, Petitioners did not argue that they were in a worse position having a CMP and more time to come back into compliance than they would have been with no CMP and no more time to come back into compliance. Thus, even though the cease testing order had some of the same effects as a suspension, the ALJ did not err in upholding the CMP.

o Petitioners argue that the ALJ erred in not adjudicating the issue of whether the State agency properly ordered it to stop testing for the analytes albumin, magnesium, and creatine kinase beginning on October 13, 2000. According to Petitioners, this order was the "root cause" of the deficiency relating to the condition for patient test management at issue here. P. Br. at 54-55. However, only part of the patient test management deficiency is related to the earlier stop testing order--the finding that Petitioners did not properly identify the laboratory to which it referred specimens for tests that it was not permitted to perform. The deficiency is also supported by other findings that are in no way related to the stop testing order. Moreover, Petitioners can hardly complain that the ALJ did not adjudicate the issue of whether the order to stop testing was wrong since Petitioners did not proffer any evidence on that issue in the current proceeding with respect to two of the three analytes.

[Page 28] o Petitioners argue that the ALJ erred by claiming that they were trying to challenge CMS's determination that Sonali's deficiencies posed immediate jeopardy (which is not an appealable determination). According to Petitioners, their challenge went instead to whether CMS had violated the regulation by basing its immediate jeopardy determination on invalid factors, such as Dr. Ali's compliance history. While the latter is a matter that might be within the scope of an ALJ's review of a determination by CMS to revoke a laboratory's certificate (i.e., whether CMS followed the proper procedures in making this determination), the ALJ's view of the question as a jurisdictional one was not prejudicial to Petitioners. First, the ALJ did note that the three conditions as to which he found Sonali out of compliance were consistent with a finding of immediate jeopardy. Second, a history of noncompliance is not wholly irrelevant to the question of whether immediate jeopardy, as defined in the regulations, exists. Such a history could reasonably affect an evaluation of the likelihood the deficiencies would cause harm. In any event, CMS's citing the history as a factor does not mean that CMS did not also have other, proper grounds for determining that Sonali's deficiencies posed immediate jeopardy and, therefore, for imposing sanctions pursuant to the procedures that apply when CMS finds immediate jeopardy.

In sum, we find that none of Petitioners' procedural challenges provides a basis for reversing the sanctions at issue here.

Conclusion

Based on the foregoing discussion, we affirm and adopt the ALJ's Findings of Fact and Conclusions of Law and affirm the ALJ's decision to uphold CMS's revocation of Sonali's CLIA certificate and imposition a $30,000 CMP. By operation of 42 U.S.C.§ 263a(i)(3), Dr. Ali is subject to the two-year prohibition on owning or operating a CLIA-certified laboratory.

JUDGE
...TO TOP

Cecilia Sparks Ford

Sheila Ann Hegy

Judith A. Ballard
Presiding Board Member

FOOTNOTES
...TO TOP

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.

2. The CLIA regulations were amended in January 2003. Except where otherwise indicated, we cite to the regulations that were in effect during the relevant time period and appear in 42 C.F.R. Part 493 (2000). Those regulations refer to the Health Care Financing Administration, or HCFA, the former name of CMS. See 66 Fed. Reg. 35,437 (July 5, 2001). We use CMS throughout this decision to refer to the federal agency.

3. Sonali's CLIA certificate would have expired on April 20, 2001 but was administratively extended until August 17, 2001 pursuant to 42 C.F.R. § 493.49(e). ALJ Decision at 3, 22.

4. Pursuant to 42 U.S.C. § 263a(i)(3), once a laboratory's CLIA certificate has been revoked, the owner and operator of the laboratory is prohibited from owning or operating a laboratory for two years. A laboratory owner or operator is entitled to a hearing under the circumstances specified in 42 U.S.C. § 263a(i)(1). Thus, although the caption of the ALJ Decision identifies only Sonali as the petitioner, the ALJ also treats Dr. Ali in his individual capacity as a petitioner.

5. The third and fourth meanings are not relevant here.

6. The third PT event of 2000 was conducted during the fall of 2000 and the first PT event of 2001 was conducted in the spring of 2001.

7. The sentence quoted appears as part of the guidelines for section 493.803 in "Interpretive Guidelines for Laboratories, Appendix C, Survey Procedures and Interpretive Guidelines for Laboratories and Laboratory Services." The document is not in the record for this case but is currently available at http://www.cms.hhs.gov/clia/. We address below Petitioners' arguments regarding this and other provisions of these guidelines. Of course, the guidelines must be read in light of the regulations and cannot override them. See Alden-Princeton Rehabilitation & Health Care Center, DAB No. 1873, at 8 (2003).

8. In any event, it is questionable whether the results of Sonali's self-evaluation were accurate. CMS's August 17, 2001 letter to Dr. Ali states that Sonali "self scored the results based on comparison with peer groups chosen by [Sonali] to make it appear that [Sonali's] PT results were acceptable," but that "[n]o documentation was submitted to support the allegation that the newly selected peer group was closer in actuality to the laboratory's methodology (even if this re-scoring were acceptable, which it is not)." CMS Ex. 17, at 1.

9. Like the ALJ, however, we do not read Surveyor Eckles' testimony as an admission that she gave such advice.

10. Petitioners' briefs refer to several ALJ decisions which Petitioners maintain are inconsistent with the decision appealed here in various respects. Although we do not discuss all of those decisions, they are distinguishable on their facts. In any event, ALJ decisions do not set a precedent that the Board must follow.

11. According to Ms. Apt, there should be an indication in the comment section of the report as to what was corrected on the report so that the physician receiving the report knows what has changed from the original report. Tr. at 156.

12. We note that the Board remanded this case to the ALJ on the ground that the ALJ had not given proper notice of several issues addressed at the hearing. Kaulson Laboratories, Inc., DAB No. 1747 (2000) (including the violation of section 493.1109(a)).

We also note that the date and time of specimen receipt into the laboratory are required. 42 C.F.R. § 493.1107(b). The evidence also calls into question the accuracy of the time of specimen receipt for the four patients.

13. The ALJ Decision notes that Dr. Ali said at the hearing that there were worksheets that he wanted but could not say "specifically what he was looking for." ALJ Decision at 24. The ALJ Decision continues:

I advised Petitioner Ali at hearing that I would entertain a post-hearing motion to compel production if Petitioner Ali could point to any evidence that there existed documents not produced that might assist Petitioners case. Tr. 634-35. Petitioner pointed to no such evidence in his motion. I conclude that no grounds for post-hearing relief have been shown by Petitioners.

Id.

14. Petitioners also dispute the ALJ's purported "new citation" in footnote 7 of the ALJ Decision, which notes that both the original instrument printout and the instrument printout for the re-run are dated 10 days later than the date the laboratory report shows that the specimen was received. P. Br. at 35-36. However, CMS clarified at the hearing that no violation had been cited based on these facts (Tr. at 157), and the ALJ did not rely on them as a basis for his finding.

15. Petitioners also point out that the State agency found a violation under section 493.1109(b) in 1999 because the information for the laboratory itself rather than for a reference laboratory was incorrect on the test reports. P. Br. at 37. Petitioners appear to be referring to the survey report from an April 1999 survey of another of Dr. Ali's laboratories which found a violation under section 493.1109(b) on the ground that the address and CLIA number shown on the test reports were for a laboratory that had closed. CMS Ex. 18, at 7. This does not preclude finding a violation on a different factual basis, however.

16. According to CMS laboratory consultant Gary Yamamoto, moreover, this requirement helps to ensure that the testing laboratory is certified, gives the user a better idea of how to interpret the test results, and prevents the referring laboratory from misrepresenting that it is the testing laboratory. Tr. at 391.

17. The version of the guidelines quoted by Petitioners (at Petitioners Brief at 31) is not in the record, nor were we able to locate it elsewhere.

18. Petitioners contend that CMS Exhibit 10, at 3, was not "the actual report," but just "the information on sent out test," i.e., a document that simply indicates that a particular specimen has been sent to a reference laboratory for certain tests. P. Br. at 38. Petitioners do not dispute that Sonali's final test report did not include both the name and address of the reference laboratory, however.

19. CMS seems to assume that the letter was referring to Ms. Canlas (CMS Br. at 26) while, as indicated later, Petitioners seem to assume that it was referring to Ms. Longares.

20. The ALJ assumed for purposes of this case "that the certificates of equivalence from the World Education Services, Inc. are sufficient to show that both Ms. Canlas and Ms. Longares had the required bachelor's degree . . . ." ALJ Decision at 19.

21. At the hearing, Dr. Ali responded in the affirmative to CMS counsel's question whether Ms. Longares "[w]as . . . the technical person you were using as a technical supervisor?" Tr. at 639. There is no reference to Ms. Canlas in the cited pages.

22. While the ALJ referred to the lack of evidence indicating the "level of responsibility," we assume he meant by this that the evidence did not show that Ms. Longares' experience was, in fact, in "high complexity testing within the subspeciality of bacteriology" as required by the regulation.

23. By letter dated August 17, 2001, CMS advised Petitioners that it had reviewed these submissions and found "no material evidence that would affect our sanction determination . . . ." CMS Ex. 17, at 1. CMS stated that it was therefore "taking action to impose sanctions as proposed in our July 30, 2001 letter . . . ." Id. at 4.

24. According to Petitioners, the State agency violated a requirement in CMS's State Operations Manual (SOM) that it mail the survey report to the laboratory within 10 days of completion of the survey "in normal situation[s]" and earlier where immediate jeopardy is found. Petitioners Reply Br. at 14 (apparently referring to SOM sections 6130 and 6282, currently available at http://63.241.27.79/manuals/107_som/som107c06.pdf.) Petitioners assert that CMS informed them of the imposition of sanctions prior to their receipt of the report of the May 31, 2001 survey. P. Reply Br. at 14. It appears that Petitioners may have received the survey report for the first time with CMS's July 30, 2001 notice of the imposition of sanctions, which states that the survey report is enclosed. See CMS Ex. 16, at 2. The SOM provision on which Petitioners rely does not establish a prerequisite for imposing a sanction, however. Moreover, Petitioners do not allege that they were unaware of the deficiencies found in the survey before they received the survey report. Thus, while the best practice would have been to give Petitioners the survey report within the timeframe indicated in the SOM, Petitioners were not prejudiced by the delay.

25. The ALJ actually stated only that had CMS imposed the suspension effective August 4 (instead of August 7), it would have had the same effect as the cease testing order, that is, it would have caused Petitioners to cease testing on that date.

26. Petitioners do not deny this and also do not deny that Sonali could have continued to participate in PT by remaining in business and "engag[ing] in parallel testing with another laboratory" while the cease testing order was in effect. See CMS Br. at 30.

CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES