Ohio State University’s Wexner Medical Center will pay the federal government $268,000 to settle allegations that its lab violated proficiency testing laws. The agreement will allow the lab to stay open and under OSU control, according to a report in The Columbus Dispatch. The settlement “is a very favorable resolution for the hospital because its laboratory can continue to provide testing and can continue to bill Medicare and Medicaid for its services,” says Robert Mazer, Esq., an attorney with the law firm of Ober|Kaler in Baltimore. The Centers for Medicare and Medicaid Services (CMS) levied sanctions this past summer after the lab sent six proficiency-test samples to the Mayo Clinic and to another OSU lab for testing. Federal law prohibits a lab from sending such samples to another lab, even within the same hospital system. The sanctions could have cost OSU millions of dollars in Medicare and Medicaid reimbursement, according to the Dispatch report. The penalties had been on hold during the university’s appeal of the sanctions. As part of the settlement, OSU has appointed a new clinical laboratory director. Daniel Sedmak, M.D., a professor of pathology, will replace Amy Gerwitz, M.D., who will remain an OSU employee. In addition, […]
Ohio State University’s Wexner Medical Center will pay the federal government $268,000 to settle allegations that its lab violated proficiency testing laws. The agreement will allow the lab to stay open and under OSU control, according to a report in The Columbus Dispatch.
The settlement “is a very favorable resolution for the hospital because its laboratory can continue to provide testing and can continue to bill Medicare and Medicaid for its services,” says Robert Mazer, Esq., an attorney with the law firm of Ober|Kaler in Baltimore.
The Centers for Medicare and Medicaid Services (CMS) levied sanctions this past summer after the lab sent six proficiency-test samples to the Mayo Clinic and to another OSU lab for testing. Federal law prohibits a lab from sending such samples to another lab, even within the same hospital system.
The sanctions could have cost OSU millions of dollars in Medicare and Medicaid reimbursement, according to the Dispatch report. The penalties had been on hold during the university’s appeal of the sanctions.
As part of the settlement, OSU has appointed a new clinical laboratory director. Daniel Sedmak, M.D., a professor of pathology, will replace Amy Gerwitz, M.D., who will remain an OSU employee. In addition, the lab staff will undergo additional training.
“We are grateful to CMS for its willingness to work toward a resolution that best meets the needs of our patients and the community,” said Larry Anstine, CEO of OSU Hospital, in a statement.
Violations Self-Reported
According to a July 20, 2012, report in the Dispatch, the lab in February 2012 sent a PT sample of Lyme disease to an outside lab in violation of federal rules. A subsequent review found that five more blood-culture specimens had been improperly referred to another OSU laboratory between November 2009 and November 2011. Laboratory officials self-reported the violations, which they said were accidental.
In a June 14 letter, CMS officials told Gerwitz that the lab was out of compliance with federal rules. The lab responded with more than 100 pages of documents, but CMS on July 12 imposed sanctions on the lab, including revocation of the lab’s CLIA certificate and a loss of Medicare and Medicaid reimbursement for services. The lab appealed, and sanctions were put on hold pending an appeal before an administrative law judge.
The laboratories at OSU’s Wexner Medical Center perform approximately 9.6 million patient tests and 9,200 proficiency tests a year and have been fully accredited by the College of American Pathologists since 1969.
Under current federal law, labs may not send PT samples to another laboratory for testing even if they typically send patient specimens out for confirmation. Sending PT samples to another laboratory for testing may be considered PT referral and could result in the loss of the lab’s CLIA certificate for at least one year. In addition, the lab director cannot direct a laboratory for two years, and the lab owner may not own or operate a lab for two years.
President Obama recently signed into law a bill passed by Congress that gives CMS leeway in enforcing sanctions on clinical laboratories for violating PT referral rules. Specifically, the Taking Essential Steps for Testing Act gives CMS enforcement discretion to make the one-year CLIA certificate revocation optional rather than mandatory and allows CMS to levy intermediate sanctions instead of the two-year prohibition against ownership or operation of a lab.
“The settlement may indicate that, in appropriate cases, CMS will accept lesser sanctions than revocation,” notes Mazer from Ober|Kaler. “However, the settlement is not precedent on which another laboratory can legally rely. Additionally, it’s very difficult to determine what factors CMS will consider important in determining whether to accept a sanction other than revocation based on a single settlement.”
In the past, CMS was required to revoke a laboratory CLIA certificate if it found that laboratory intentionally referred PT specimens to another laboratory, says Mazer. “A lesser penalty might be imposed only if the referral was unintentional,” he explains. “However, CMS viewed a referral to be intentional if the laboratory intended for another laboratory to test its proficiency testing specimens, even if it didn’t know that it was breaking the law.”
Under the new law, CMS now has discretion in determining whether a PT referral was intentional or not, as well as what the appropriate sanction should be.
