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Lab regulators gain penalty options under CLIA sanctions.

The Federal government ins't putting away its nuclear weapons, but officials do propose to boost their capability in what amounts to a ground war against lab regulatory infractions.

That's the upshot of proposed sanctions unveiled April 2, in the fourth and final installment of rules to implement the Clinical Laboratory Improvement Amendments of 1988. The rules would also reconcile CLIA '88 with certain provisions of the Omnibus Budget Reconciliation Act of 1987, an overlap that may have allowed labs to continue operating under one law but not the other.

The proposals would give the Health Care Financing Administration (HCFA) important new enforcement options short of termination from the Medicare and Medicaid programs.

"We have fashioned a range of enforcement actions to help us tailor appropriate measures to given situations," said HCFA Administrator Gail Wilensky, PhD.

Wilensky compared the termination option to a nuclear bomb: extremely effective but something you can use only once. She also insisted the Government is "not interested in seeing how many [labs] we can put out of business." The proposed rules, however, put all facilities--including physician office laboratories--at greater risk for penalties from a wide number of infractions.

Under the proposal, the oversight will be conducted via routine inspections by HCFA, state survey agencies, and PT results. HCFA would decide which intermediate penalties apply in place of or prior to limiting, suspending, or revoking a lab's CLIA certificate. The options are:

* State on-site monitoring. HCFA may require continuous or intermittent state monitoring of a correction plan until the lab conforms to requirements. The lab must pay for state survey agency costs, including the number of hours of on-site monitoring multiplied by the hourly rate negotiated between HCFA and the state.

* Civil money penalty. Fines may be imposed, taking into account the scope, severity, and duration of regulatory noncompliance. Depending on the infraction, the amount would range from $50 to $10,000 per day of noncompliance or per violation.

* Suspension of payments. A partial suspension of Medicare payments would include specialties or subspecialties of tests for which the lab is out of compliance. A complete suspension, affecting all Medicare-covered services, may be imposed when a lab has failed to correct deficiencies within three months after an inspection, or when the lab has been cited for deficiencies in three consecutive inspections. The suspension would remain in effect until the problems were corrected.

* Directed plans of correction. A detailed course of action to correct problems may be completely directed by HCFA, or the agency may direct only a portion of the plan if any of the other alternative sanctions are invoked. The plan covers specific measures to be taken within a given time frame.

HCFA will generally rely on the laboratory surveyor's judgment to evaluate the severity of infractions. Officials have proposed a three-tiered ranking based on noncompliance with conditions (such as proficiency testing, test management, QC/QA, and personnel standards) that must be met to obtain a CLIA certificate. The ranking is as follows:

[Paragraph]Condition-level deficiency with immediate jeopardy to public safety, such as the case of a lab that reports the results of tests that were never performed. The lab would be required to correct the jeopardy at once and could face one or more alternative sanctions. For example, this category could draw the maximum civil money penalty of $10,000 per day or per violation. The lab's certificate could be revoked if the jeopardy were not removed within 23 days.

[Paragraph]Condition-level deficiency without immediate jeopardy--for example, unsuccessful performance in a PT program. The range of alternatives again applies; a lab's certificate would be in danger if problems were not corrected within one year.

[Paragraph]Deficiencies below the condition level--for example, a lab's lack of a current procedure manual. The facility wold have to submit a correction plan that HCFA found acceptable in both content and time frame. Failure to correct the deficiencies within a year could result in Medicare suspension or certificate sanctions.

Whenever one or more alternative action is taken, a lab could be required to submit the names and addresses of every physician, provider, supplier, or other client that has used its services since the last certification inspection. HCFA, through the state survey agency, would then send out notices of its action to those on the list.

HCFA's reasoning: "Clients that have used the services of the sanctioned laboratory would then be able to make an informed decision, based on the reason for the sanction, as to whether or not patients must be retested."

Questions are bing raised about the proposed appeal process covering the new options. With the exception of the revocation of a CLIA certificate and civil money penalties, labs would be notified of a proposed sanction and have the chance to respond with written comments or a request for a hearing. The penalties, however, could be applied before the hearing was actually held. Industry observers note that some labs hit by, say, Medicare suspension could find their doors closed before being able to prove they did nothing wrong.

A final section of the proposals outlines the Congressional mandate that HCFA publish an annual registry "useful in evaluating the performance of laboratories."

The registry, to be available to the general public as well as to physicians, would include a list of labs that have been convicted of fruad and abuse, false billing, or kickbacks; have received CLIA certificate penalties; were subject to intermediate sanctions; have had accreditation withdrawn or revoked; and have been excluded from Medicare. The registry would also contain a list of persons who have been convicted of violating CLIA requirements and the circumstances of each case with penalties imposed.

The comment period on the proposed sanctions ended June 3. Sources indicate the final CLIA '88 rules are unlikely to surface before March of next year, with compliance requirements being phased in a few months after that.

Unions with

organizing victory

The Supreme Court has unanimously upheld a National Labor Relations Board regulation that may make it easier for unions to organize hospital workers.

The original 1989 action marked the first time that the NLRB had adopted an industrywide rather than a case-by-case approach to regulating unionization efforts.

The ruling, which went into effect immediately, automatically recognizes eight categories of employees who work in community hospitals. These are physicians, registered nurses, all other professionals, all technical employees, all skilled maintenance employees, all clerical employees in business offices, all guards, and all additional nonprofessional employees.

Authorities anticipate one result will be that unions will find it easier to organize around the specific interests of smaller groups of employees. According to hospital administrators, however, the new ruling will drive up the cost of union negotiations while increasing national health care expenses in general.

At this writing, professional laboratory groups had little to say about the ruling, which may be seen as a delicate membership issue. But other groups were less reticent. The Service Employees International Union said hospital workers are now "freed from legal bondage." The American Nurses Association called the decision a "major victory" that will provide its members with "the right to decide their destiny in the workplace."

The 9-0 Supreme Court decision was handed down April 23 in the case of American Hospital Association v. NLRB.

CLIA costs under study

A $400,000 study is under way to assess the financial impact of CLIA "88 on clinical laboratories. It is being funded by the American Medical Association, American Hospital Association, Health Industry Manufacturers Association, and Health Industry Distributors Association. Mathematica Policy Research of Princeton, N.J., and Levine Associates of Kensington, Md., will perform the analysis.

The study, to be completed by October, will describe the impact the proposed regulations might have on testing sites, the industry, and patients. It will also analyze effects on the quality of testing services and access to care.

The equipment manufacturers association issued a report last fall finding that CLIA would add $4 billion in new costs to physician laboratories alone.
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Title Annotation:Clinical Laboratory Improvement Amendments of 1988
Publication:Medical Laboratory Observer
Date:Jun 1, 1991
Previous Article:Making employee commitment a self-fulfilling prophecy.
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