College of American Pathologists
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  Comparing PT results can put a lab's CLIA license
  on the line


February 2002
Originally published in CAP TODAY

Jack R. Bierig

Most pathologists and other laboratory personnel recognize that proficiency testing specimens should be handled in precisely the same manner as patient specimens. But few realize the disastrous consequences that can befall a laboratory if PT materials are referred to another laboratory for analysis or even if PT results are compared with results from another lab. Specifically, the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) has, with increasing frequency, been revoking the CLIA certificate of any laboratory that refers PT specimens or that compares PT results.

The agency has done so even if the comparison or the referral was done, without the knowledge of the laboratory director, by a lab technician who did not understand the wrongfulness of the action. Moreover, once revoked on this basis, the CLIA certificate may not be reinstated for at least one year. As a practical matter, therefore, even innocent comparison of PT results can sound the death knell of a laboratory.

This article begins by examining the regulatory provisions the CMS has invoked to justify revoking the CLIA certificate of a laboratory that compared PT results. It then describes actual cases in which laboratories lost their licenses. Finally, it concludes with suggested steps a laboratory director can take to reduce the likelihood of suffering this draconian consequence.

What the regulations say

In enacting the Clinical Laboratory Improvement Amendments of 1988, Congress was concerned that laboratories might evade the statute's proficiency testing requirements by having PT specimens analyzed at a reference facility. To address this concern, Congress included the following provision in CLIA: "Any laboratory that the Secretary [of HHS] determines intentionally refers its proficiency testing samples to another laboratory for analysis shall have its certificate revoked for at least one year." (42 U.S.C. § 263a[i][4]). This provision seems reasonable enough. The statute was expanded, however, in two CMS regulations. The first, 42 C.F.R. § 493.801(b)(3), forbids laboratories to "engage in any inter-laboratory communications pertaining to the results of proficiency testing sample(s). ..." It goes on to prohibit laboratories with multiple testing sites or separate locations from participating in "any communications or discussions across sites/locations concerning proficiency testing samples..."

The sister regulation, 42 C.F.R. § 493.801(b)(4), governs actual referral of PT specimens. Section (b)(4) ordains that a laboratory "must not send PT samples or portions of samples to another laboratory for any analysis which it is certified to perform in its own laboratory." It then specifies, in chillingly succinct terms, the penalty for a violation: "Any laboratory that HCFA determines intentionally referred its proficiency testing samples to another laboratory will have its certification revoked for at least one year." The regulation concludes by requiring a laboratory that receives PT samples from another laboratory for testing to "notify HCFA of the receipt of those samples."

There is a key distinction between these regulations. Specifically, the regulation addressing interlaboratory comparisons of PT results, section (b)(3), does not provide a mandatory penalty. Thus, CMS is free to impose sanctions short of revoking the CLIA certificate, for example, a corrective action plan or a fine. By contrast, the regulation governing referral of PT specimens, section (b)(4), prescribes a mandatory death penalty for a laboratory that "intentionally" referred PT samples to another laboratory. Such a laboratory must have its CLIA certificate revoked for at least one year.

One would conclude from reading the regulations that there are two critical issues in any situation involving interlaboratory collaboration on PT materials:

  1. Did the collaboration take the form of an interlaboratory communication pertaining to PT results in violation of §(b)(3)-or did it involve the actual referral of a PT sample to another laboratory for analysis in violation of §(b)(4); and
  2. If there was an actual referral of a PT sample, was the referral "intentional"? In any case of interlaboratory collaboration regarding PT specimens, there will be a violation of the regulations. But the penalty for the violation should depend on the answers to these two questions.
  3. This is the conclusion that one would reach from a reading of the regulations. However, as discussed next (see "HCFA decisions"), CMS has taken a much harsher approach. It has found any comparison of PT results to involve a "referral"-regardless of whether there was a physical transfer of PT specimens. And it has found every "referral" to have been made "intentionally"-regardless of whether the laboratory director was even aware of the action. Thus, in every reported case in which there has been an interlaboratory comparison of PT results, the CLIA certificate of the laboratory has been revoked.

HCFA decisions

The first case to interpret the regulations on interlaboratory collaboration with respect to PT materials was Long Medical Laboratories, DAB CR 334 (1994). In that case, the owners of a laboratory admitted sending PT samples to a reference laboratory for purposes of checking the lab's quality of testing. The owners argued that they had not violated the law because they had acted out of good motives and without realizing that their actions were unlawful.

On these facts, the HCFA administrative law judge (ALJ) upheld a one-year revocation of the CLIA certificate of the laboratory. Construing the word "intentionally" in §(b)(4), the ALJ held that a referral was "intentional" if the laboratory knew that the sample it referred was a PT sample. Neither the laboratory's good motives nor its ignorance of regulatory requirements made the referral unintentional. Significantly, the holding that a referral is made "intentionally" when a lab deliberately sends out a PT sample-regardless of lack of intent to act unlawfully-has been followed in every subsequent case to consider the issue.

The next case to address the issues was Blanding Urgent Care, DAB CR 438 (1996). There, in one instance, a technical consultant to the lab submitted PT results based on tests he had performed at a hospital laboratory to which he was a consultant. In another instance, the consultant compared PT results at one laboratory with results obtained on equipment at another laboratory. The Blanding case thus considered two important questions:

Is there a "referral" of a specimen when a lab compares its PT results with results obtained by another laboratory but when no PT sample has been physically transferred from one lab to another; and

Has a laboratory acted "intentionally" when a referral is made by a technical consultant or an employee below the level of owner or director-without the knowledge of the owners or the lab director?

The ALJ ruled against the laboratory on both issues.

With respect to the question of what is a "referral," it is important to note that all that the technical consultant in Blanding did was to retest a PT sample in light of results obtained on a similar sample at another laboratory at which the consultant worked. There was no physical sending of a sample from one lab to another. There was simply a re-performance of proficiency testing after comparing initial results.

It would seem that this action would constitute an interlaboratory comparison in violation of §(b)(3)-which does not carry the one-year revocation of the CLIA certificate. However, the ALJ ruled that it involved a referral in violation of §(b)(4)-the provision with the mandatory exclusion. The ALJ held that "for a laboratory to have referred proficiency testing samples to another laboratory for analysis, it need not physically take or transfer its proficiency testing samples to another laboratory" (CR 438, at 17). The ALJ concluded that awareness of the results of PT testing at another lab, coupled with retesting of a "PT sample based on that awareness constitutes a referral of a PT specimen under §(b)(4)."

Having reached this conclusion, the ALJ had to decide whether the laboratory acted "intentionally" when the referral was made by a lab employee without the knowledge of the owner or lab director. The ALJ treated the intent of the technical consultant as the intent of the laboratory-without any consideration of whether the imputation of intent was appropriate. Subsequently, in Primary Care Medical Group, DAB CR 439 (1996), another HCFA ALJ justified this conclusion by observing that the lab director is responsible for everything that goes on in the laboratory. Thus, in Blanding and in Primary Care Medical Group, the lab's CLIA certificate was revoked.

In my opinion, these cases were wrongly decided on both issues. To hold that there can be a referral of a PT sample without a physical transfer of the sample seems contrary to ordinary English-language usage of the word "referral." More important, if receiving information about a PT specimen from another lab constitutes a referral under §(b)(4), then §(b)(3) would seem to have little purpose. Moreover, the fact that an interlaboratory comparison of PT results is sanctionable under §(b)(3), albeit without the mandatory one-year certificate revocation, should help ensure that responsible labs will avoid PT comparisons.

On the intent issue, several arguments can be made from the text of the regulations that the intent of a lab employee or consultant should not be attributed to the laboratory for purposes of revoking the laboratory's CLIA certificate. But the fundamental point is that it is profoundly unfair to revoke the CLIA certificate of a laboratory when neither the director nor the owner was aware of the referral-particularly when the director takes decisive steps to remedy the situation as soon as it is brought to light.

Nor, in my judgment, is it an answer to say that the director is responsible for everything that goes on in the laboratory. Of course, the director is responsible. But the question relates to what Congress intended as the remedy when a referral occurs. And it seems hard to believe that Congress intended that a lab's CLIA certificate be pulled for a year based on the conduct of a lower-level employee unbeknownst to the director or owner.

Although I believe that HCFA's positions on these issues is incorrect, these positions are being enforced. Indeed, in two cases decided in December 2000, the HHS Departmental Appeals Board reaffirmed the positions taken in Blanding and Primary Medical Group. See Oakland Medical Group v. HCFA, CCH Medicare & Medicaid Guide 120,208 (Dec. 5, 2000); Boykansky v. HCFA, CCH Medicare & Medicaid Guide 120,209 (Dec. 21, 2000). The lesson of these cases is clear: A laboratory at which an employee compares PT results with results from another laboratory can lose its CLIA certificate-even if the director was unaware of, and did not in any way authorize, the comparison.

What lab directors can do - The prohibition against comparing PT results applies not only to laboratories that are completely independent of each other but also to separate laboratories that are under common ownership or control. Of course, a lab director should never authorize or condone any form of interlaboratory comparison of PT results in any circumstances. But what can the director do about comparisons by lower-level employees without the director's knowledge?

One suggestion that has been advanced is to have laboratories under common ownership participate in different PT programs. It is, of course, impossible to compare results on a specimen in one program with results on a specimen from another program. This approach has significant downsides, however. First, it is administratively burdensome. More important, it prevents each laboratory within a system from being able to participate in the PT program that the director deems best. For these reasons, I do not recommend this strategy.

Rather, lab directors could put in place a protocol that makes clear to all employees and consultants that any form of interlaboratory comparison of PT results and any referral of PT specimens are strictly forbidden. The director should make sure that all employees and consultants are aware of and respect this policy. Indeed, it is a good idea to document efforts to ensure that lab personnel have been instructed about the importance of adhering to the protocol.

This approach has two advantages. It will help avoid inadvertent actions with respect to proficiency testing that could cause the lab to lose its license. And if a laboratorian does act in defiance of the protocol, it will give the laboratory a stronger position that such action should not result in revocation of the certificate. In any event, lab personnel must be aware of the draconian consequences that can ensue from interlaboratory comparison of PT results and take all reasonable steps to avoid such comparisons.