Labs Should Prepare for Tighter CLIA Enforcement

CMS is stripping labs of their CLIA licenses for inadvertent violations of PT procedures

CEO SUMMARY: Lab directors and pathologists should take notice of disturbing new developments in enforcement of CLIA regulations. During the past year, CMS officials have revoked the CLIA certification of several hospital laboratories for what are, essentially, inadvertent violations of proficiency testing (PT) procedures. Revocation of lab’s CLIA certification lasts for one year, and also includes a sanction that prevents the lab director and the lab owner from operating or owning a laboratory for two years.

IN RECENT MONTHS, federal officials have revoked the CLIA certification for a growing number of laboratories. These severe sanctions are generally linked to inadvertent violations involving proficiency testing.

In such cases, revocation of a laboratory’s CLIA (Clinical Laboratory Improvement Admendments of 1988) certification lasts for one year. Further, when the Centers for Medicare & Medicaid Services (CMS) revokes a lab’s CLIA certification for proficiency testing (PT) violations, it also forbids the laboratory director and the lab owner from operating or owning a clinical lab for two years.

The College of American Pathologists (CAP) is tracking this disturbing development. Although only a “handful” of labs have been affected, CMS sanctions are so severe that CAP has started an education program to alert pathologists and lab directors to this nationwide problem.

“CMS is being more vigilant in pursuing possible incidents of PT referral and intra-laboratory communication,” explain- ed R. Bruce Williams, M.D., FCAP. “Frequently, the sanctions are disproportionate to the level of noncompliance, especially when instances were unintentional. CAP is tracking a rise in unintentional inci- dents, and is finding cases of misunderstandings that have developed in the laboratory community. We are working to clear up that confusion.” Williams chairs CAP’s Commission on Laboratory Accreditation and is a pathologist with The Delta Pathology Group in Shreveport, La.

“Labs are required to have a CLIA license to perform human testing for diagnostic purposes” he said. “When the lab loses that license, it is basically out of business. It loses the ability to bill for Medicare and Medicaid and is prevented from performing tests and reporting results.

New Lab Director Needed

“When CLIA certification is lost, the hospital must arrange for its laboratory to be owned and operated under a license with a different owner and a different director,” added Williams. “Small labs in rural hospitals have been shut down because the hospitals can’t own those labs for two years, and because the pathologist can’t direct the lab for two years. Basically, that lab ceases to exist, creating unique patient care problems for the parent hospital.

“Even medium-sized hospital labs have been affected,” Williams continued. “One hospital lab in a moderate size city lost CLIA certification and was shut down. Only after a new owner was found was that lab facility able to come back online.

“Sometimes, if the affected lab is part of a hospital chain, a sister hospital can step in and run the lab. Or, a hospital could work with a nearby hospital to have lab professionals come in and run the operation. Sometimes commercial labs come in and take over management and operation of the hospital lab in these situations. This problem is occurring not just to CAP accredited labs, but also to labs accredited by the Joint Commission and to CMS and state-inspected labs.

“One problem results from the way PT is conducted,” explained Williams. “It is extremely easy to make a mistake and refer a PT test to another lab for confirmation. Those mistaken referrals are bringing harsh penalties.

CLIA Regs Require PT

“CLIA Regulations (section 493.801) say all laboratories must enroll in approved PT programs and that technologists must test PT samples in the same manner as the laboratory tests patient specimens. This regulation means that, if a lab runs a patient specimen only once, PT specimens also must be run only once. It also means that PT samples should be rotated among all staff that routinely perform the patient testing,” he noted.

“In addition, each laboratory must report PT actually done at that laboratory,” Williams said. “For example, if a laboratory performs HIV screening and routinely sends positive samples to another laboratory for confirmation, it is not allowed to do so for PT—as it would be considered referral of PT. Proficiency testing is meant to assess the testing done in one specific lab, not the testing done in another, outside facility. Although not entirely obvious, PT referral can occur unknowingly in the most practical lab situations,” he added. (See sidebar, “Common Situations Can Create Problems.”)

PT Handling Questions

“The penalties are severe and most of these situations are simply unintentional or inadvertent mistakes. Yet labs are being penalized heavily,” Williams said. “These are not cases in which someone is trying to cheat on PT or get around the PT requirements. Having said that, let me add that the College is adamant that any person who purposefully cheats or tries to do something inappropriate on PT should be sanctioned harshly. We believe that PT cheating is inappropriate and not conducive to good patient care or good quality lab medicine.

“However, for lab professionals who have good intentions, there are many ways that labs can run afoul of these regulations inadvertently,” Williams explained. “Let’s say a main hospital laboratory has several different types of outlying labs such as a blood gas lab, a stat lab in the ER, and a lab in a physician’s office that the hospital owns. For whatever reasons, a technologist in one of the outlying labs may have a PT result that would normally be reflexed to the main lab for confirmation. Lab techs know that they should treat PT samples as they would treat a patient sample. Given that, they would look at their own internal flow charts for what to do with the PT sample. Normally this result would be confirmed by the main lab and so they would send it over to the main lab. The main lab would run the test and report the result to the outlying lab.

“That situation happens frequently,” Williams said. “Lab professionals believe they are handling the sample correctly because they are handling it as they would handle a patient sample. The caveat is that you are not supposed to send PT samples outside of your CLIA or CAP lab walls! In other words, you must keep all PT samples inside the lab and never refer any PT samples out. If you follow this one rule, you should be safe. But there is ample room for confusion.

“For instance, let’s say you have a positive HIV test,” he added. “You would normally send that out for confirmation. So, a lab tech doing PT might send out an HIV sample for confirmation. Or, you have a positive gram stain on a PT sample. Same thing: You would normally send that sample out for confirmation. Your lab might have limited microbiology testing in its lab and so you send off any positive results for confirmation and/or identification and sensitivity testing. Therefore, you might be inclined to do the same with PT samples for gram stains or microbiology. If you do, that would be inappropriate.

“Here’s a less obvious example,” Williams continued. “Let’s say you have a hematology sample that involves Kodachromes. A technologist might normally handle that test at the bench and then show it to others. But you should definitely not show these PT samples to others in the lab and you shouldn’t show it to a supervisor or a pathologist unless you would normally do that for a patient.

Confusion Reigns

“But this is where confusion arises if you have a case of an atypical cell that you would normally refer to a pathologist,” Williams explained. “It would be okay to show that PT sample to the pathologist if the pathologist looks at the sample within the four walls of the laboratory.

“But say you are working in a small lab or a lab in a large system and the pathologist is not present in your lab at the time when you look at the PT slide,” he said. “You would say to yourself, ‘This normally goes to the pathologist.’ So, you package up the PT slide and send it to the pathologist who is working at another CLIA lab site—even though the two labs are closely related and possibly are owned and operated by one hospital.

“In this example, that pathologist represents the lab where he or she is physically working—not the lab where the PT sample originated, even if the pathologist is the lab director,” Williams said. “In this example, the right thing to do is for the technologist to wait until the pathologist comes to the technologist’s lab. Then, it would be appropriate and legal to have the pathologist look at that PT slide. These are fine distinctions that are easy to miss for technologists and other lab professionals.

“Here’s another situation to avoid, one that involves a hospital or facility that has multiple CLIA numbers within the same facility and those labs share the same computer system,” Williams added. “If you put results for your PT samples into the computer and label them so it is possible for lab workers at any of the other CLIA labs to view the results, you could be penalized. So, don’t label them as PT1 and PT2.

Recent Regulatory Emphasis

“These rules have been in existence since CLIA became effective in 1992,” observed Williams. “However, CMS is stepping up its enforcement efforts, particularly to identify attempts to get around PT requirements. Because the penalties are so severe, it is important for all laboratories to be alert to these developments.

“We see a rise in the number of CLIA cases being reported to CMS, even though the number is small,” he added. “Typically these violations come in pairs because two labs are affected at the same time: the referring lab and the receiving lab.

“Unfortunately, CMS has taken the position that it cannot see inside the minds of technologists who make these PT errors. Thus, it cannot determine if what happened was intentional or unintentional,” said Williams. “CMS enforce- ment is predicated on the fact that any PT referral should be treated as an intentional referral. So any innocent mistake by a technologist who believes he or she is doing the right thing could lead to the harsh penalties enumerated previously.

“We asked CMS to differentiate between intentional and unintentional attempts to circumvent the PT rules and CMS officials declared that they must treat them all as intentional. That is their stance,” stated Williams.

“Another problem for labs in this situation is that the appeal mechanism for these problems goes through an administrative law judge,” he added. “To our knowledge, the administrative judge has upheld CMS’ position on every appeal that has gone to a hearing.

“Recently, we learned that a non-CAP- accredited laboratory is taking CMS to court to challenge CMS’s revocation of its CLIA certification. The lab’s strategy seems to be that a court would be more amenable to understanding the difference between intentional and unintentional. After all, the courts address these issues every day. This court may recognize that the penalty may not fit the crime. That case has yet to be resolved.

“Another warning to lab directors may be helpful,” continued Williams. “As CMS increased its CLIA enforcement, it is asking laboratories to report violations. This means that if a technologist refers a PT sample to another lab and that second lab reports the violation, then the second lab doesn’t face the severe penalties. This factor may be one reason why we see an increase in the number of CLIA-related enforcement actions.”

Education and Training

For labs seeking to avoid these severe sanctions, CAP advises education and training for staff. “Education always is the answer when trying to be in compliance,” Williams said. “It’s also important to have procedures to prevent unintentional PT referrals.

Williams’ two other recommendations included: 1) don’t put information about PT samples into your computer system where it would be easy to identify it, for example. 2) inform both the technologists and the send-out staff to not send out PT samples.

THE DARK REPORT observes that, once again, CMS is acting in a heavy-handed manner toward clinical laboratories. Punitive sanctions for inadvertent PT referrals affects patient care and disrupts the affected hospital when CMS revokes its lab’s CLA certification for this cause.

Common PT Situations Can Create CLIA Problems

SOME COMMON EXAMPLES in which laboratories may inadvertently “refer” Proficiency Testing (PT) include the following, according to the College of American Pathologists (CAP):

  • Reflex and confirmatory testing: For a patient sample, if a laboratory does not perform the confirmatory or reflex portion of a test battery or other testing, the sample would typically be sent to a different lab for that testing. For a proficiency testing sample, a laboratory is prohibited from sending the proficiency testing sample outside of the participating laboratory. That laboratory must complete the proficiency testing result forms using the appropriate code.
  • If multiple CLIA numbers exist within the same institution or ancillary laboratory, special caution must be taken when laboratories receive proficiency testing samples for laboratories with more than one CLIA/CAP number. If the specimen boxes are tested by the wrong area, this could lead to a perception of referral or “sharing” of PT. If both laboratories test the PT sample or if the wrong laboratory performs the testing and reports the results to the PT provider, it may be considered referral of PT.
  • Slides for pathologist review: Certain patient slides, like abnormal differentials, involve patients and they require a pathologist’s review. These slides may be sent to a site outside of the testing laboratory for this review. Proficiency testing slides, however, cannot be sent out. Rather, the pathologist must review the PT slide at the laboratory’s physical address.

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