CEO SUMMARY: When the New York State Department of Health closed the laboratory at 173-bed Peninsula Hospital Center in New York City on February 23, it became national news. State inspectors issued a nine-page list of deficiencies in the lab, including problems that could affect patient safety. The result of the order was that all patients requiring lab work needed to be moved out of the hospital, and the hospital could not admit new patients through the emergency department or by physician referral.
DID A WHISTLEBLOWER CALL New York State officials to complain about the conditions in the lab at Peninsula Hospital Center in New York City?
That’s the way it looks after reading the nine-page list of deficiencies the New York State Department of Health (DOH) issued for the 173-bed hospital in the Far Rockaway section of the Borough of Queens. The department sent inspectors to the lab on February 20 and 21. The next day, February 23, the department issued the order to close the laboratory for 30 days.
Lab Permit Suspended
In its press release about the matter, DOH stated that “The New York State Health Commissioner Nirav R. Shah has issued an order of summary action suspending the clinical laboratory permit of Peninsula Hospital in Far Rockaway, Queens, for a period of 30 days. This action was taken after a DOH inspection found that the hospital laboratory failed to meet accepted standards, which put patient safety at risk.”
The press release went on to say “Commissioner Shah issued a second summary order directing the hospital to stop admitting new patients, to cancel all surgeries and procedures, to suspend any activities that depend upon laboratory services, and to develop a plan to transfer inpatients to other facilities because the lack of a clinical laboratory at the facility poses a danger and threat to the health of current and future patients.”
In response to the DOH order, all patients requiring lab work needed to be moved out of the hospital and the hospital could not admit new patients through the emergency department or by physician referral.
It was an unusual action by a government body. No lab expert interviewed by THE DARK REPORT could recall a hospital being forced to transfer patients out of a facility due to deficiencies in the laboratory.
Services that did not require lab testing remained open at Peninsula Hospital. According to the Queens Chronicle, this included radiology and an attached nursing home. The newspaper also noted that the financially-troubled hospital had filed for bankruptcy during 2011.
As of March 6, the hospital was taking steps to reopen. Peninsula spokeswoman Liz Sulik told the newspaper that hospital administrators were developing a plan to remedy the laboratory deficiencies so that they could restore full services.
New Medical Director Likely
“Before the hospital can reopen, the laboratory is likely to need a leadership change in the form of a new medical director—and possibly a new lab administrative director—in order to eliminate the 66 deficiencies the department cited in six specific areas,” stated Nora Hess, MBA, MT(ASCP), PMP, Operations Managing Consultant for Chi Solutions, Inc., in Ann Arbor, Michigan. She had reviewed the DOH’s order of summary action for THE DARK REPORT.
Hess believes the list of deficiencies reads as if a whistleblower alerted the New York State Department of Health officials about the problems. “For example, on January 1, it is reported that a staff member was working alone in the blood bank and prior to this had only two days of training. That’s not something that is identified during an inspection. That’s something a whistleblower might report.
“Also, in the list of the lab’s deficiencies, there were red flags that the hospital was having financial difficulties,” Hess added. “For example, they are using outdated reagents. In some cases, the lab did not have any reagent inventory. To me, that indicates that the lab reagent suppliers may not be shipping additional supplies because of payment concerns. State inspectors also found expired blood plasma and observed workers without enough personal protective equipment for handling lab samples.”
Resolving Lab’s Problems
“It can be expected that, to resolve these problems in the hospital’s laboratory, it will require an infusion of cash and a change in the lab’s leadership because it will look as if the current leaders have not been actively ensuring that the laboratory produces quality results,” Hess added.
Retaining a new medical director with experience at fixing troubled laboratories is one step, she noted. “This individual must be tough and willing to push for the changes required for the lab to correct these deficiencies and achieve an acceptable level of quality,” she said. “A new lab administrative director will probably be needed as well, because these two individuals must work hand in hand.”
For two years, Hess worked as interim director at Maryland General Hospital in Baltimore after that hospital’s lab was cited for deficiencies in how it handled testing patients’ specimens for HIV, among other problems. “At Maryland General, we spent the first several months just responding to deficiencies and then a longer period of time ensuring that the corrections were fully implemented,” she said. “That is likely what it will take for Peninsula Hospital as well.”
Patient Care Issues
Elissa Passiment, Executive Vice President of the American Society for Clinical Laboratory Science (ASCLS) in Washington, D.C., commented that the DOH inspectors’ report cites a mix of deficiencies. Some involve administrative issues and others could affect patient safety as well.
“The New York State Department of Health is responsible for ensuring that all labs comply with its regulations because the department has exempt status under the Clinical Laboratory Improvement Act (CLIA),” she stated. “Exempt status means CMS will accept the work the department does, such as lab inspections. New York State’s lab regulations are known to be equal to or more stringent than those of CLIA.
“At Peninsula Hospital, the biggest concerns definitely were the patient safety issues that the department cited and it was shocking to me that the lab was able to operate for as long as it did,” commented Passiment. “The findings raise questions about the availability of the medical director, along with the attention to detail paid by that person, other managers in the laboratory, and the hospital’s administration. More specifically, CLIA is very clear that the accountability for the overall performance of the laboratory resides in the duties and responsibilities assigned to the medical director.”
Lack of Training Cited
The list of deficiencies cited by the inspectors included a lack of staff training, a lack of continuing education for the staff, and a lack of safety training, including training on how to ship infectious materials. Also, no supervisor was onsite in the lab in the evenings, during the night shift, or on weekends and there was no chain of command to provide guidance to staff, the inspectors said.
While the lab’s day shift supervisor was knowledgeable about microbiology, the supervisor had no experience or training in other clinical areas of the laboratory, the inspectors claimed.
“The medical director would not do the staff’s competency testing. He or she would designate that job to a lab director or some other senior staff member,” Passiment added. “However, there is no way that the medical director could have not known that this training was not getting done.
Lesson for Lab Directors
“The lesson for lab directors is very clear,” she said. “Every lab needs to have a medical director onsite overseeing lab operations and not just signing off on cases,” she stated. “CMS has made this specific point innumerable times. CMS holds the medical director and the lab director responsible for ensuring that any lab fully meets all the standards established in the regulations.”
Peninsula Hospital Center is not the only hospital with problems in the laboratory. THE DARK REPORT has learned that, also in New York City, another hospital lab was found deficient by the New York State Department of Health in recent months. In this case, however, the state permitted another hospital organization to oversee the lab testing activities in the subject laboratory. This allowed the parent hospital to remain open and to continue treating patients.
Whistleblower Notifies NY State Dept. of Health About Medical Director Change at Quintiles
WHISTLEBLOWERS AND ALLEGATIONS INVOLVING medical director compliance with the regulations of the New York State Department of Health (DOH) surfaced in another case in the spring of 2011. It involved Quintiles Laboratories, LTD, of Marrieta, Georgia.
Through the Freedom of Information Act (FOIA), THE DARK REPORT obtained documents about this case from the DOH. In a communication to the DOH, the whistleblower alleged that the lab’s medical director had resigned several weeks prior and that the Quintiles lab was operating 24/7 without a medical director while seeking a replacement. Also, the whistleblower alleged that the lab was testing specimens from New York state.
At that time, Quintiles Laboratories had a permit application pending with the DOH to test patient specimens from New York State.
Medical Director Response
In its investigation, DOH was told by Quintiles management and by the medical director who had resigned that this individual, as an independent contractor, was continuing to function as medical director. This arrangement would continue until Quintiles employed a new medical director.
In response, DOH asked Quintiles to provide information about the on-site work hours of the now-interim medical director. Apparently unsatisfied with the answers Quintiles provided, DOH suspended the pending permit, saying Quintiles could submit a new application once it met DOH requirements. Following this determination, DOH Clinical Laboratory Consultant Thomas Lipinski wrote to the whistleblower:
Your complaint of March 29, 2011, alleging that Quintiles Laboratories, LTD, Marietta, Georgia, was operating without a director or New York State permit, was referred to the Clinical Laboratory Evaluation Program (CLEP)…
An investigation was performed and the results were reviewed thoroughly. Based on this review, we have determined your complaint is substantiated for the laboratory operating without a director. Since the laboratory does not have a New York State qualified director, the laboratory permit became invalid. And Quintiles Laboratories will be required to file a new permit application.
Quintiles disputed this conclusion. “At no time did Quintiles’ Marietta facility operate without a medical director,” declared Phil Bridges, Quintiles’ Director of Corporate Communication, in response to questions from THE DARK REPORT. “In fact, during a transition period, both our outgoing and incoming medical directors were on duty simultaneously.”
Bridges stated that a new lab director for the Marietta facility was appointed in April 2011. “This individual has a valid New York State certificate of qualification, which was granted on April 13, and the Quintiles lab operates under a valid NYS Permanent Facility Identifier,” he said. “On April 18, Quintiles applied for a new permit and the lab was placed by NYSDOH in ‘applied for status.’
“In changing the laboratory director, Quintiles was compliant with the customary process of making such a change and, in accordance with established practice, there was a handover phase so that a qualified registered laboratory director was assigned at all times,” added Bridges.
“Quintiles is compliant with NYS requirements for its laboratory in Marietta, we are in compliance with NYS procedures, and we are in good standing at NYS,” he said. “The license has never been revoked as a result of any quality issues. There has been no investigation and there have been no violations.”
The two cases—involving whistleblowers and allegations of deficiencies in how medical directors meet NYSDOH requirements—should be considered fair warning to medical directors in labs licensed by the NYSDOH. The agency has certainly demonstrated its willingness to address what it views as violations of state regulations regarding the role of medical directors. Whether serious, as with the Peninsula Hospital Center laboratory, or minor, relative to the medical director changeover at Quintiles Laboratories, each case reminds medical directors that regulatory enforcement is tightening.
State, Federal Lab Laws Can Be Very Different
STATE LAW GIVES THE NEW YORK STATE Department of Health (DOH) different powers to regulate medical laboratories than those powers given to the Centers for Medicare and Medicaid Services (CMS) through the Clinical Laboratory Improvement Amendments (CLIA).
Robert E. Mazer, a lawyer and principal with Ober Kaler in Baltimore, Maryland, said the issues involved in the case of Peninsula Hospital Center and its laboratory provide a good example of the need for labs to comply fully with both state and federal laws.
“It is important to recognize that there can be differences in how individual states regulate labs, when compared to federal law,” observed Mazer, who is not involved in this case. “For example, the state agency in New York issued an order, effective immediately, suspending laboratory operations at Peninsula Hospital Center. It doesn’t appear that CMS has the same authority under CLIA.
“By contrast, absent a court order, CMS is required to give five days notice of imposition of sanctions—even when the deficiencies pose immediate jeopardy,” explained Mazer. “Theoretically, this five-day notice might provide a hospital with the opportunity to make arrangements with another laboratory, thus eliminating the need to suspend hospital activities. That was not the case in New York, as state health regulators decided to close the lab immediately and without advance notice.”