Lab Group, Hospitals Say CMS Needs More Discretion in CLIA Enforcement

The Centers for Medicare and Medicaid Services (CMS) needs to allow itself more discretion in implementing the Clinical Laboratory Improvement Amendments of 1988 (CLIA), hospital and clinical laboratory stakeholder groups said in comment letters to the agency on a recent proposed rule regarding rural health clinics and labs. The American Hospital Association (AHA) and the American Clinical Laboratory Association (ACLA) told the CMS that its proposal to penalize clinical laboratories that send proficiency testing (PT) samples to an outside laboratory for analysis didn’t take full advantage of the discretion given to it under the Taking Essential Steps for Testing (TEST) Act of 2012. In the proposed rule, published Sept. 23 (78 Fed. Reg. 58,385), CMS explained its interpretation of the CLIA penalties under the TEST Act. In the proposed rule, CMS said it would divide the sanctions for PT referral into three categories based on severity and extent of the referrals. The agency would revoke a lab’s certification for the most egregious violations in the first category; the second and third would call for suspension or limitation (category 2) and general sanctions (category 3). The severity of the penalty would be determined by when the erroneous referral was discovered (NIR, Sept. 26, 2013, p. 1). In comments submitted ahead of the Nov. 18 deadline, AHA said it was “concerned that several of the proposed sanctions are unduly severe. While the categories that CMS establishes are reasonable, we are concerned that some of the corresponding sanctions remain too severe.” ACLA said that CMS “has not taken full advantage of the flexibility” that Congress granted the health and human services secretary in the TEST Act. Under the law, the agency was granted the discretion to consider the circumstances under which a PT sample was sent to another laboratory and to impose lesser sanctions for referrals that may have been unintended or inadvertent. According to ACLA, CMS “should retain maximum flexibility and apply a ‘facts and circumstances’ analysis when a laboratory sends out a PT sample, which would allow it to respond more appropriately to innocent PT referrals and to concentrate its corrective efforts on referrals whose purpose is to circumvent the PT program.” TEST Act The TEST Act was passed in December 2012. Until then, the CLIA statute required the revocation of a laboratory’s CLIA certificate and a subsequent two-year ban of the owner or operator of the laboratory from owning or operating any CLIA-certified laboratory when a PT referral had been confirmed. According to AHA, “these automatic and severe sanctions effectively shut down laboratories for even minor or inadvertent PT referrals.” The hospital group said the two-year ban for the owner and operator “has been especially problematic for hospitals and health systems because they may have multiple laboratories that share a common owner or operator. Additionally, hospitals and health systems often have many laboratories operating under a single CLIA certificate. In these circumstances, if a PT referral violation occurred in a single laboratory within the hospital or health system and the CLIA certificate was revoked, all laboratories under that hospital or health system’s certificate would be banned from performing laboratory testing, a situation that poses severe risk to patient safety and quality of care.” According to ACLA, the purpose of the TEST Act is to give CMS greater discretion in dealing with inadvertent referrals so that the agency doesn’t always have to impose the most severe sanction of license revocation, regardless of the circumstances surrounding the particular referral. The legislation permitted CMS to impose alternative sanctions prior to revoking a laboratory’s CLIA certificate in cases where a PT sample was referred to another laboratory for confirmatory testing or because the laboratory didn’t offer a specific test. Penalties Too Severe? According to ACLA, “the three categories of referrals are overly specific, leaving little room for consideration of whether or not a PT specimen was sent out accidentally and whether a laboratory should be subject to sanctions.” The group said CMS needs to define “intentionally referred” as “knowingly and willfully sent a PT sample to another laboratory for the purpose of using that laboratory’s test results as its own or as a comparison for its own results.” JoAnne Glisson, senior vice president for ACLA, said the proposed CMS guidelines “are just as rigid as before” the TEST Act. “CMS failed to take advantage of the flexibility in the law,” Glisson said, adding that ACLA doesn’t necessarily object to the creation of three categories for penalties, but rather to the fact that they are too specific. Glisson said many PT referrals won’t fall neatly into one of the three categories, which means they are too restrictive. In its comment letter, ACLA said CMS “should be able to consider factors such as the adequacy of a laboratory’s operating procedures, the degree of automation in the laboratory, the training and experience of the individual who made the referral, the laboratory’s history of referrals, and other relevant factors as appropriate.” AHA recommended that CMS “allow itself some discretion, particularly in instances in which imposing an ownership ban across an entire health system would endanger the public’s health. This could be accomplished by indicating that in category 1 violations, CMS ‘may’ prohibit the owner and operator from owning or operating a CLIA-certified laboratory for at least one year.” Takeaway: Hospitals and clinical laboratory groups say penalties are still too severe for labs that make certain proficiency testing referrals.