Congress May Respond to Tough CLIA PT Penalties

Two bills are a response to laboratory sanctions imposed for inadvertent PT violations under CLIA

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CEO SUMMARY: For years, severe penalties in cases where a laboratory has inadvertently erred in handling proficiency testing (PT) specimens have been a point of contention between the Centers for Medicare & Medicaid Services (CMS) and the clinical laboratory profession. Two bills proposed in Congress would give CMS more discretion in how it interprets the language in the Clinical Laboratory Improvement Amendments (CLIA).

IN CONGRESS, overly-severe penalties for labs deemed to have violated proficiency testing (PT) requirements have caught the attention of certain elected officials. Bills to fix this problem have been filed in both the Senate and the House.

The bills are designed to provide more precise guidance to resolve an ongoing issue with the Clinical Laboratory Improvement Amendments (CLIA) statute as it is currently written. One important point of contention between the clinical laboratory profession and CLIA regulators centers around how federal officials interpret the language of the law that pertains to proficiency testing, then levy tough enforcement actions based on this interpretation.

These penalties can go so far as loss of the medical lab’s CLIA license and banning the laboratory director from holding any medical directorship for two years. Lab organizations caught in the jaws of this enforcement vice are asking their congressional representatives to address this matter.

THE DARK REPORT contacted staff members at several congressional offices who are supporting the two bills, known as H.R. 6118 in the House and S. 3391 in the Senate. (See sidebar below.)

The bills would address a lack of regulatory flexibility in CLIA enforcement by granting CMS the discretion not to revoke a clinical laboratory’s CLIA certificate for the unintentional referral of proficiency testing samples to other laboratories. The bills are supported by the Clinical Laboratory Coalition.

Inadvertent PT Errors

Speaking off the record and for background, a congressional aide said members of Congress are looking into CMS’ practices of imposing sanctions and pulling CLIA certificates in situations where a laboratory has made inadvertent PT errors. Also, CMS has threatened to pull certificates for all labs in a hospital network for some violations, according to another congressional aide familiar with the issue.

For its part, CMS says that it must interpret the law as written. Thus, it has no choice but to impose sanctions as prescribed by law, the aide said.

Some labs are facing sanctions that make no sense, said one congressional aide who asked not to be named. Congress knows of PT issues at two hospital labs in Ohio and at hospital labs in Arkansas, California, Illinois, Indiana, New Jersey, New Hampshire, and Minnesota.

It is difficult to get information on how many hospitals have faced sanctions or revocations of CLIA certificates, aides said. That is because most of these cases are not public knowledge unless a case goes through the administrative law process. When a lab appeals a sanction imposed by CMS, it goes to an administrative law judge (ALJ).

“We are trying to find hospital labs that have had problems with proficiency testing,” commented this congressional staffer. “Unless we hear about a case from another congressional office or a hospital lab director, we don’t always know the specific cases.”

Members of Congress have asked CMS for information about the labs that have faced sanctions for PT violations.

A number of lab directors have told members of Congress that CMS has come down hard on labs regarding the issue of PT referrals. “We have heard where CMS has required a change in lab ownership and that CMS will revoke a lab’s CLIA certificate for two years and require the lab to pay another lab director to run the lab for those two years,” an aide said.

‘CMS Is Playing Hardball’

“Sometimes CMS tells labs they must settle or face even harsher sanctions,” continued this aide. “CMS says, for example, ‘We will revoke your CLIA certificate unless you settle and we will require you to bring in a competitor to run your lab for two years. At the end of those two years you can reapply for a new CLIA certificate.”

To bring in a competitor to run its lab, the hospital being cited has to pay millions of dollars to have another lab run the operation, added the aide.

CMS also has told labs that, if they pursue the ALJ appeal process and lose, then the hospital lab and every lab in the hospital’s network could lose their CLIA certificates, an aide reported. Without a laboratory, a hospital would have trouble delivering patient care. “Where is the logic in having a hospital pay millions of dollars to bring in a competing lab to handle its laboratory testing?” asked this congressional staffer.

Sanctions for PT Violations

CMS has threatened sanctions even in cases when a lab self-reports a PT violation, reported this aide. Staff in one congressman’s office said that, after a lab director self-reported a PT violation, federal regulators threatened to pull all CLIA certificates for an entire hospital network.

“It’s seems crazy but it’s true: The worst thing a lab can do is self-report a PT mistake,” commented this staff member, explaining that, “A lab director who dis- covers a PT violation faces a difficult dilemma. He or she can self-report the violation but then the lab would lose its CLIA certificate. If the lab doesn’t report the violation, you hope no one finds out. If CMS finds out, the lab could lose its certificate. Either way, it’s an impossible choice.”

Staffers from several Congressional offices told THE DARK REPORT that mem- bers of Congress have discussed these issues with officials from CMS. One source noted that regulators recognize that they might appear to be unreasonable but, the regulators also assert that no discretion is allowed under current law. The law says that CMS shall revoke the CLIA certificate after a PT violation and it must do so for every hospital in the network. Because hospitals have consolidated over time, hospital networks have become larger.

At the same time, regulators and administrative law judges have decided that, when a lab intends to send out a PT specimen to another lab, the mere intention to do so results in a PT violation, the aide said. There is no distinction between a lab that makes a mistake and a lab that acts in bad faith by trying to undermine the PT system.

Definition of Intent

Another congressional staffer pointed out that the bills’ sponsors would prefer that the House and Senate bills address the issue of the definition of intent. According to this individual, at this time, it has been difficult to get everyone— CMS, the Republicans, and Democrats—to redefine the word ‘intent’ in the statute, an aide said. Instead members of Congress aim to give CMS some discretion in such cases. Members of Congress have been working on this issue for a year and have heard about more labs that have had CLIA licenses revoked, concluded the aide. This may suggest that federal regulators have become more stringent in how they address this issue with labs, the aide said.

Bills in Congress Would Allow CMS to Apply Intermediate Sanctions for Some Situations

MEMBERS OF THE U.S. CONGRESS are considering two bills to give lab regulators more flexibility when clinical labs make inadvertent errors.

In the U.S. House of Representatives, Rep. Michael Grimm (R-N.Y.), introduced H.R. 6118, which is called the “Taking Essential Steps for Testing Act” (the TEST Act). The co-sponsors are Reps. Peter Roskam (R-Illinois), Mike Ross (D-Arkansas), Steve Womack (R- Arkansas), and Steve Austria (R-Ohio).

Three U.S. senators have introduced a similar bill, S.3391, with the same name. Senators Amy Klobuchar (D-Minnesota), Jeanne Shaheen (D-New Hampshire), and John Boozman (R-Arkansas), introduced this bill. Both bills are supported by American Clinical Laboratory Association (ACLA), Clinical Laboratory Management Association (CLMA), and the Clinical Laboratory Coalition.

“CMS maintains that the CLIA statute requires the agency to revoke the CLIA certificate for any laboratory that intentionally refers its proficiency testing samples to another laboratory for analysis,” ACLA wrote in a press release. “In several recent cases, laboratories’ CLIA certificates were revoked because they referred proficiency test specimens for an HIV test. But for HIV and certain other tests, the laboratory’s standard operating procedure is to refer all samples to another laboratory.

“For example, the HIV test involves both an initial screening test—called ELISA—as well as a confirmatory test—a Western Blot,” ACLA said. “However, many laboratories do not offer the Western Blot due to limited resources and, as a result, refer the confirmatory test to a laboratory that does offer it.”

The legislation would permit CMS to impose intermediate sanctions before revok- ing a laboratory’s CLIA certificate in cases where a proficiency testing sample was referred to another laboratory for confirmatory testing or because the laboratory does not offer a specific test.

“As a result of this important statutory change, laboratories would no longer be unfairly punished when they follow the usual practice and refer a specimen to another laboratory,” explained ACLA President Alan Mertz. “The TEST Act will prevent the wasteful time and expense that occurs when a laboratory’s CLIA certificate is revoked, and allow laboratories to continue providing vital services to patients.”

In encouraging members to support these bills, CLMA said, “CMS would be permitted to impose intermediate sanctions prior to revoking a CLIA certificate under circumstances where a proficiency testing sample was referred to another laboratory for confirmatory testing or because the laboratory in question does not offer a specific test.”

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