Medical laboratory continues to operate, retains its CLIA certificate, and maintains that the PT violations at heart of CMS case were inadvertent

One nationally prominent clinical laboratory organization closed its chapter in the ongoing story of CLIA enforcement of the regulations governing the inadvertent referral of proficiency testing specimens. But this chapter ended with an unexpected twist for the Ohio State University Wexner Medical Center (OSUWMC), which was given severe sanctions by officials of the Centers for Medicare & Medicaid Services (CMS), despite recent enactment of a new federal law on the subject of enforcement of CLIA proficiency testing errors.

The settlement between OSUWMC and CMS was announced on January 16. It calls for OSUWMC to:

  • Appoint a new medical director for the clinical laboratory,
  • Pay $268,000, and
  • Provide additional training to the medical laboratory staff in proficiency testing (PT).

New Medical Director Named at OSUWMC’s Clinical Laboratory

OSU named Daniel Sedmak, M.D., to the position of medical director of the clinical laboratory, as part of this resolution with federal officials who administer the Clinical Laboratory Improvement Amendments (CLIA). Sedmak is currently the Chair of the OSU College of Medicine, Department of Pathology and a professor of pathology.

Ohio-state-medical-center-photo

Last month, Ohio State University Wexner Medical Center issued a press release stating that it had resolved pending sanctions assessed against its clinical laboratory by the Centers for Medicare & Medicaid Services for violations of CLIA requirements, including the inadvertent referral of proficiency testing specimens. (Photo by Wikipedia.com.)

Sedmak has more than 30 years of experience in anatomic and clinical pathology, including 26 years at OSU, the university said. At OSU, Sedmak has served as Executive Director of the OSU College of Medicine. Center for Personalized Health and Director of the OSU College of Medicine, Office of Global Health Education, among other positions.

Settlement Is to Resolve CLIA Violations Involving Referral of PT Specimens

As described by OSUWMC, the settlement allows the medical laboratory to continue to provide services with no interruption. Ohio State will continue to own, operate, and manage all of its clinical laboratory locations and will maintain its certification under CLIA.

OSU will continue to own, operate, and manage all laboratory locations and maintain its CLIA certification are significant, given that CMS threatened last summer to require new lab ownership and to pull the lab’s CLIA certificate. The Dark Report has reported that, when other labs faced sanctions under similar circumstances, CMS required new ownership, a new medical director, and a new CLIA certificate. (See Dark Daily, “CLIA Officials Propose Major Sanctions against Prominent Academic Center Clinical Laboratory Due to Inadvertent Referral of Proficiency Test Referrals”, August 13, 2013.)

“We are grateful to CMS for its willingness to work toward a resolution that best meets the needs of our patients and the community,” commented Larry Anstine, CEO of The Ohio State University Hospital.

Patient Care Unaffected By Inadvertent Referral of Proficiency Test Specimens

In its announcement, OSU said the proficiency test (PT) errors involved the mistaken referral of a limited number of PT samples to other hospital laboratories. “The samples were not patient specimens, and at no time was patient care affected,” the statement said. The clinical laboratory self-reported the errors.

“In July 2012, after the errors were self-reported, the labs were fully accredited by the College of American Pathologists for another two years,” the statement added.

In response to the threatened sanctions, OSU officials appealed to CMS and wrote to every member of the Ohio Congressional delegation asking them to intervene on behalf of the medical laboratory. By September, Congress passed the “Taking Essential Steps for Testing (TEST) Act of 2012” to give CMS more flexibility in how it sanctions labs following inadvertent PT errors. President Obama signed the bill into law on December 4. The law removed severe penalties for medical laboratories that inadvertently violate PT requirements.

Clinical Laboratories Should Recognize Implications of OSUWMC Lab Episode

There are unsettling aspects to this settlement, particularly for pathologists and physicians who serve as medical directors of clinical laboratories licensed under CLIA. Congress enacted the TEST Act last fall to clarify how it wanted officials at the Department of Health and Human Services to interpret the language of CLIA that addressed proficiency testing and situations in which inadvertent referrals of PT samples may occur.

Yet, this settlement between CMS and OSUWMC does not seem to reflect fully what Congress intended when it passed the TEST Act of 2012. In its enforcement letter to OSWMC, dated June 11, 2012, CMS notified OSUWMC that it would revoke the medical center’s laboratory  CLIA license and its approval to receive Medicare payments. CMS also threatened to revoke the license of the OSUWMC laboratory medical director. These enforcement actions were subject to appeal by OSUWMC.

Under the terms of the settlement, as disclosed in OSUWMC’s press release, CMS did not follow through on the sanction of license revocation. However, OSUWMC is paying $268,000 and named a new medical director for the clinical laboratory. Thus, despite passage of the TEST Act, it would appear that federal officials felt the need to throw the existing OSUWMC’s medical director under the bus—all of this over a case that, from facts in the public domain, seems to involve inadvertent PT violations.

For these reasons, all pathologists serving as medical directors in CLIA-licensed medical laboratories will want to be aware that passage of the TEST Act of 2012 had limited benefit in case involving the inadvertent referral of proficiency testing specimens at OSUWMC’s clinical laboratory. This may be because the OSUWMC case pre-dated passage of the new law and CMS officials decided to follow through with strong sanctions because they had their own point to make.

If that is indeed the case, future instances of inadvertent proficiency testing referrals that come to the attention of CLIA administrators may mean that strong enforcement action will be forthcoming. It may not involve revocation of the medical laboratory’s CLIA license for two years, but it could include prohibiting the laboratory  medical director from serving as medical director for any CLIA-licensed clinical laboratory for two years.

From this perspective, the settlement between CMS and OSUWMC might be a precedent that pathologists will want to keep in mind. This case may be a roadmap that shows how CMS officials may handle future cases of inadvertent referral of a proficiency testing specimen.

—By Robert L. Michel and Joseph Burns

Related Information:

Ohio State Reaches Settlement with Centers for Medicare and Medicaid Services

Wexner Medical Center reaches settlement with federal government

Ohio State Settles Medical Lab Sanctions Case

TEST Act Signed By President Obama, Provides Regulators Discretion When Clinical Laboratories Mistakenly Violate CLIA PT Requirements

Bill to Fix CLIA Proficiency Testing Language for Clinical Laboratories Passes in the House, Awaits Senate’s Return in November

CLIA Officials Propose Major Sanctions against Prominent Academic Center Clinical Laboratory Due to Inadvertent Referral of Proficiency Test Referrals

THE DARK REPORT: CLIA’s Catch-22 Involving Proficiency Testing